Late Fees and Interest on GST Return
Late Fees and Interest on GST Return
If you are a business owner and fall under the GST threshold limit, you must register your entity under it. Filing returns as per your GST interest rate not only makes you credible in the eyes of your customers but also makes it easier for you to obtain funding. However, if you delay filing your returns, you will tarnish your reputation and have to pay hefty interest penalties.
In this article, we shall understand the late fees under GST applicable in case of defaulting in filing your GST return.
Different Types of Late GST Returns Filing
The late fee under GST is categorised based on the following three types:
For Non-Annual GST Returns
A late fee of ₹100 per day under SGST and the same for CGST will be levied on your profile for late GST filing. The penalty mentioned here is on a daily basis until you make the payment. However, under no circumstances can this penalty fee exceed ₹5000. The daily and maximum limits apply equally to interstate transactions.
For Annual GST Returns
Similar to non-annual GST returns, such transactions also attract a late fee of ₹100 per day under SGST and the same for CGST. This means the total daily late fee shall be ₹200. However, the maximum penalty is capped at 0.25% of the total turnover for the concerned financial year.
For NIL Returns
Even if you fall under the category where no tax is applied to your profile, you still need to file the NIL return within the specified time frame. The late GST interest rate fee shall be ₹50 per day under the CGST Act of 2017 and ₹50 under the SGST Act of 2017. That means a ₹100 GST penalty per day.
Recent Update in Late GST Fees
The announcement made during the 43rd GST Council has reduced the GST late payment interest fee based on the turnover slab and return type.
Here are the details for GSTR-1 and GSTR-3B:
| Return | Return Type | Last Year's Annual Turnover | Late Fee Capping Under SGST | Late Fee Capping Under CGST | Maximum Late Fee |
|---|---|---|---|---|---|
| GSTR-4 | Nil return | NA | ₹250 | ₹250 | ₹500 |
| (From FY 21-22) | Other than Nil filing | NA | ₹1,000 | ₹1,000 | ₹2,000 |
| GSTR-3B and GSTR-1 | Nil return | NA | ₹250 | ₹250 | ₹500 |
| Other than Nil return | < ₹1.5 crores | ₹1,000 | ₹1,000 | ₹2,000 | |
| Ranging from ₹1.5 crores and ₹5 crores | ₹2,500 | ₹2,500 | ₹5,000 | ||
| Over ₹5 crores | ₹5,000 | ₹5,000 | ₹10,000 | ||
| GSTR-7 | NA | NA | ₹1,000 | ₹1,000 | ₹2,000 |
| (This form is for filing TDS under GST) |
Note: Another update pertains to GSTR-7, where the late fee has been reduced to ₹50 per day of delay from the previous ₹200.
Temporary Rate Reductions
Temporary reductions have recently been implemented for late fees to be paid:
Intra-state: For intra-state supplies, the interest on late payment of GST has been decreased to ₹25 per day under CGST and ₹25 per day under SGST. That means a late fee of ₹50 per day is now imposed instead of ₹200.
Inter-state: Similar to the regulations for intrastate transactions, the late fees for inter-state supplies have also been decreased to ₹25 per day for both CGST and SGST. That means a GST late fee per day of ₹50 is imposed per day.
NIL return: For NIL return late filings, CGST has decreased the amount to INR 10 per day, and similarly, SGST has also reduced it to ₹10. Therefore, a total of ₹20 per day is charged for not filing NIL returns on time. Additionally, under IGST, the late fees have been reduced to ₹20 per day.
Rules Regarding Late Fees for Different GST Returns
| Return Type | Period | Late Fees | |
|---|---|---|---|
| GSTR-1 | After July, 2017 | Reduced Late Fees | |
| If you submit the return between December 22, 2018, and March 31, 2019 | From July 2017 to September 2018 | Completely Waive Off | |
| GSTR 3B | From July 2017 to September 2017 | If the filing date was before December 22, 2018, then it is completely waived. | |
| After October 2017 | If the filing date was before December 22, 2018, then reduced fees are applicable. | ||
| If you have submitted TRAN-1 but GSTR 3B is yet to be submitted before 27th December 2017 | From October 2017 to April 2018 | If the FORM GST TRAN-1 declaration has been submitted by May 10, 2018, it will be entirely waived. | |
| The GSTR-3B has been submitted but not filed due to technical issues | 43009 | Entirely waived | |
| GSTR-3B, filed between December 22, 2018, and March 31, 2019, | From July 2017 to September 2018 | Entirely waived | |
| GSTR-3B submitted after March 31, 2019 | From July 2017 to September 2018 | Reduced late fees | |
| GSTR-3B | After October 2018 | Reduced late fees | |
| GSTR-4 | After July 2018 | Reduced late fees | |
| The late fee was inadvertently imposed on the portal | From October to December 2017 | Entirely waived | |
| GSTR-4 filed between December 22, 2018, and March 31, 2019 | From July 2017 to September 2018 | Entirely waived | |
| Submitted after 31st March 2019 | After October 2018 | Reduced late fees | |
| GSTR 5 | After July 2017 | Reduced late fees | |
| GSTR 5A | After July 2017 | Reduced late fees | |
| GSTR for July 2017 and beyond, filed on or after March 7, 2018 | Entire late fees are charged | ||
| GSTR 6 | After July 2017 | Reduced late fees | |
| Zero fees for NIL returns | |||
| Submitted between 1st January, 2018, and 23rd January, 2018 | Before January 2018 | Entirely waived |
Conclusion
If you are a business owner, understanding the interest on late payment of GST is crucial. Nowadays, many GST late fee calculators and other tools are available on the market that make computation easier.
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Disclaimer / TnC
Your policy is subjected to terms and conditions & inclusions and exclusions mentioned in your policy wording. Please go through the documents carefully.
How to calculate interest on late payment of GST?
How to calculate interest on late payment of GST?
To begin computation, determine the tax liability, count the number of days late, and identify the interest rate. Next, multiply the tax liability by the number of days late, divided by the number of days in a year, and then multiply by the interest rate. You can calculate the interest on late payment of GST using the calculator.
How to deposit interest on late payment of GST?
To deposit interest, access the GST portal, go to 'Services' > 'User Services' > 'My Applications', choose 'Intimation of Voluntary Payment – DRC-03', and proceed to calculate and pay the interest using the generated challan.
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