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Penalties Under GST – Due Date, Late Fees & Interest

According to the GST legislation, a late fee is an amount levied for late filing of GST returns. When a GST registered business fails to file GST returns by the prescribed due dates, a prescribed late fee will be assessed for each day of delay.

GST necessitates the filing of returns. Even if there is no transaction, you must file a Nil return.

Please bear the following considerations in mind:

  • If you have not filed the previous month's or quarter's return, you will be unable to file a return.
  • As a result, late GST return submission will have a cumulative effect, culminating in hefty fines and penalties.
  • The GSTR-1 late filing charge is reflected in the liability ledger of the GSTR-3B filed immediately after the delay.

Penalties, Interests & Late Fees

The CGST Act imposes a daily late fee of Rs.100. As a result, it is Rs.100 subject to CGST and Rs.100 subject to SGST. Each day, the total amount will be Rs.200. However, there is a maximum levy of Rs. 5,000. There is no specific late fee in the IGST Act. Furthermore, the total late fee for GSTR-1 and GSTR-3B has been reduced to Rs. 50 per day (Rs.20 per day for Nil filing).

  • The late fee must be paid in cash, and the taxpayer is not permitted to use the Input Tax Credit (ITC) available in the electronic credit ledger to pay the late fee.
  • The late fine also applies to the failure to file nil returns on time. For example, even if there are no sales or purchases and no GST responsibility to declare in the GSTR-3B, a late fee must be paid.
  • The late fee is calculated based on the number of days past the due date. If a GST return is filed on the 23rd of January rather than the stipulated due date of the 20th, late fees will be computed for three days and must be paid in cash.
  • Currently, the GST system is set up to impose a late fee solely on GSTR-3B, GSTR-4, GSTR-5, GSTR-5A, GSTR-6, GSTR-8, GSTR-7, and GSTR-9 returns.

GST Filing – Important Dates For Filing

IMPORTANT DATES

GSTR-3B(Mar,2022)Apr20th,2022GSTR-3B(Jan-Mar,2022)Apr22nd,24th,2022
GSTR-1(Mar,2022)Apr11th,2022IFF (Optional) (Mar,2022)NA
GSTR-1(Jan-Mar, 2022)Apr13th,2022CMP-08(Jan-Mar,2022)Apr18th,2022
GSTR-4(2021-22)Apr30th,2022

OTHERS

GSTR-5(Mar,2022)Apr20th,2022GSTR-5A(Mar,2022)Apr20th,2022
GSTR-6(Mar,2022)Apr13th,2022GSTR-7(Mar,2022)Apr10th,2022
GSTR-8(Mar,2022)Apr10th,2022RFD-1018 Months after the end of quarter for which refund is to be claimed

GST – Amount Of Late Fees Applicable - Latest Updates

GST late fees and penalties were rationalized during the 43rd GST Council meeting held in June 2021.

1. In the case of non-filing of GSTR-1 and GSTR-3B returns, the maximum late fee payable shall be Rs.500 per return (i.e. Rs. 250 each for CGST & SGST).

2. Other than nil filing, the maximum late fee in GSTR-1 and GSTR-3B is established based on the yearly turnover slab, as follows:

3. If the preceding fiscal year's annual turnover is up to Rs.1.5 crore, a late fee of up to Rs 2,000 per return might be levied (i.e. Rs.1000 each for CGST and SGST).

4. If the turnover is between Rs.1.5 crore and Rs.5 crores, a maximum late fee of Rs. 5,000 per return can be levied (i.e. Rs. 2500 each for CGST and SGST).

5. If the turnover exceeds Rs.5 crores, a late fee of up to Rs.10,000 (i.e. Rs.5000 per CGST and SGST) can be levied.

6. Furthermore, the late fee for delayed filing of GSTR-4 from FY 2021-22 has been rationalised vide CGST notification 21/2021 dated 1st June 2021. The maximum late fee would be Rs.500 per return for nil filing and Rs.2000 for non-nil filing.

7. According to CGST announcement 22/2021 dated 1st June 2021, the late fee chargeable for GSTR-7 i.e. TDS filing under GST shall be a maximum of Rs. 2,000, but the late cost per day levied is decreased from Rs.200 to Rs.50 per act, per return.

GST Payments – Interest Levy, Calculation & Payment

Late payment of GST liability attracts interest based on the net tax liability after deducting input tax credit claims. Every taxpayer is required to pay interest if they:

  • Makes a late GST payment, that is, pays CGST, SGST, or IGST after the due date
  • Excess input tax credit is claimed
  • Excess output tax liability is reduced
  • Tax paid after due date - 18% per annum
  • Excess ITC Claimed or excess reduction in Output Tax - 24% per annum

The annual interest rate is 18%. It must be estimated by the taxpayer depending on the amount of delinquent tax. It is based on the net tax liability as it appears in the ledger at the time of payment. The time period will run from the day after the filing deadline until the actual payment date.

FAQs

1. When does one incur GST late penalties and interest?

If you fail to file the GST returns that are required by law, you will be charged late fees for each day that you are late. In addition, if there is any tax owed, the tax liability will be subject to interest at the rate of 18 percent per year.

2. Is it necessary for me to file GST returns if I don't owe any GST?

Yes, regardless of whether you have a tax burden or not, if you are a GST-registered taxpayer, you must file the necessary GST returns. You can file a Nil return if you had no transactions for the month. You can submit GSTR-3B if you just have purchases and no sales.

3. Could I provide my GSTR as a taxpayer who does not have any money to file as a GST return?

Yes, you can still file a GST return which shall be reclassified as a NIL return.

4. Where and how do I pay the late fees or interest?

You can pay the late fees, interest and penalties on the GST portal. The option is available under ‘User Services’.

5. What happens if you don't pay your GST late fees in a timely manner?

The GST late fees are auto-populated in the GST return for the following period. You won't be able to file your GST returns until you pay the late costs, according to the system.

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