Interest from supplier for default in filing of GSTR-1/IFF within due date

As a small or medium business owner or a startup founder, it is vital to understand the implications of default in filing GSTR-1/IFF within the due date. One of the most significant consequences is the interest charged by the supplier. In this article, we will explain all the essential details and consequences of interest charged by the supplier for default in filing GSTR-1/IFF within the due date.

What is GSTR-1/IFF?

GSTR-1 is a monthly or quarterly return that summarizes all outward supplies made by the taxable person during the tax period. It contains details of sales transactions and the amount of tax paid. GSTR-1 must be filed by the 11th of the following month for monthly filers and the 13th of the following month for quarterly filers.

IFF or Invoice Furnishing Facility is a new facility introduced by the government to help taxpayers file their invoices in real-time. It is available for the first two months of a quarter, and taxpayers can use it to file their invoices before filing their GSTR-1. The due date for IFF is the 13th of the following month. In other words, if you want to file IFF, you have to file it by the 13th of the following month, and after that, you have to file GSTR-1.

What is the due date for filing GSTR-1/IFF?

The due date for filing GSTR-1 is the 11th of the following month for monthly filers and the 13th of the following month for quarterly filers. The due date for filing IFF is the 13th of the following month. If you want to file IFF, you have to file it by the 13th of the following month, and after that, you have to file GSTR-1. For example, if you want to file IFF for the month of April, you have to file it by the 13th of May, and after that, you have to file GSTR-1.

What happens if I do not file GSTR-1/IFF within the due date?

If you do not file GSTR-1/IFF within the due date, you will be liable to pay interest on the tax payable. The interest rate is 18% per annum and is calculated from the due date of filing GSTR-1/IFF till the date of actual filing. The interest is calculated on the tax payable amount and not on the tax liability amount. For example, if you have a tax payable amount of Rs. 10,000 and you file GSTR-1/IFF after the due date, you will be liable to pay interest of Rs. 300 (18% of Rs. 10,000) for every month of delay.

What happens if I do not pay the interest?

If you do not pay the interest within the due date, you will be liable to pay interest on the unpaid interest amount. The interest rate is 24% per annum and is calculated from the due date of payment till the date of actual payment.

Can I claim input tax credit for the interest paid?

No, you cannot claim input tax credit for the interest paid on the tax payable amount. The interest paid is considered as a penalty and not as tax.

Conclusion

As a small or medium business owner or a startup founder, it is crucial to comply with the GST laws and regulations. Default in filing GSTR-1/IFF within the due date can lead to significant consequences, including interest charged by the supplier. Therefore, it is advised to file GSTR-1/IFF within the due date to avoid any penalties and interest charges.