GST Registration
GST Return
Quick & Easy Process
Professional Guidance
Legal and Tax Benefits
GST was introduced in India in July 2017. Being the complete new taxation regime there have been frequent amendments since its inception. Resulting in a lot of nitty gritty and lack of clarity on the part of taxpayers. If a GST-registered taxpayer fails to file their GST return or pay their tax liability on time, then the department charges interest and late fees. It is important for businesses to understand the aspects of this. In this guide, we will understand the late fees and interest on late filing of GST returns.
Under GST laws, a late fee applies if there’s a delay in filing GST returns. This fee is calculated daily based on the number of days past the due date. The late fee also applies to nil returns—meaning a late fee must be paid even if there are no sales, purchases, or GST liability in GSTR-3B.
For example, if you file GSTR-3B on January 23, 2024, three days after the due date of January 20, 2024, the late fee will apply to those three days and must be paid in cash.
Currently, the GST portal applies late fees only to the following returns:
Note: Late fees must be paid in cash. Taxpayers cannot use the Input Tax Credit (ITC) in the electronic credit ledger to cover this payment.
Not filing the GST return within the time period given by the department (including the extension), is considered as non-compliance with the law and attracts strict penalty amount. The amount of late fees differs according to the type of return filing.
Here’s a summary of late fee charges under GST, based on return type and turnover:
| Name of the return | Type of return | Annual turnover in previous year | Maximum late fee under CGST | Maximum late fee under SGST | Maximum late fee |
|---|---|---|---|---|---|
| GSTR-1 and GSTR-3B | Nil return | NA | Rs 250 | Rs 250 | Rs 500 |
| Other than Nil return | Upto Rs.1.5 crore | Rs.1,000 | Rs.1,000 | Rs.2,000 | |
| Between Rs.1.5 crore and Rs.5 crore | Rs. 2,500 | Rs. 2,500 | Rs. 5,000 | ||
| More than Rs.5 crore | Rs. 5,000 | Rs. 5,000 | Rs. 10,000 | ||
| GSTR-4 (FY 21-22 onwards) | Nil return | NA | Rs 250 | Rs 250 | Rs 500 |
| Other than Nil return | NA | Rs.1,000 | Rs.1,000 | Rs.2,000 | |
| GSTR-7 (TDS filing under GST) | NA | NA | Rs.1,000 | Rs.1,000 | Rs.2,000 |
Additionally, the daily late fee for GSTR-7 has been reduced to Rs. 50 per day per act, per return, down from the previous Rs. 200.
When the late fee is accrued, interest is also charged on non-payment of late fees. On the total penalty liability, interest at the rate of 18% per annum is applied. This interest is paid by the taxpayer at the time of paying the fees. The fees, as well as the interest, is calculated for the period of the due date to the date of actual filing of return.
Interest applies to late GST payments based on the net tax liability after adjusting input tax credit (ITC) claims. Every taxpayer must pay interest if they:
Interest is calculated starting from the day after the tax due date.
If GST is unpaid by the return filing due date, the following interest rates apply:
| Particulars | Interest |
|---|---|
| Tax paid after due date* | 18% per annum |
| Excess ITC Claimed or excess reduction in Output Tax | 24% per annum |
For example, if a taxpayer misses a tax payment of Rs. 10,000 for March 2024 (due on 20th March 2024) and pays it on 20th April 2024, interest for the 31-day delay (from 21st March to 20th April) is calculated as follows:
Rs.10,000 * 31/365 * 18% = Rs.153
The GST portal automatically calculates any applicable late fees when you submit your returns. The late fee for the current month or quarter must be paid when filing the following month or quarter’s returns.
Step 1. Log in to the GST portal and go to the Electronic Cash Ledger.
Step 2. Pay the late fee separately for CGST and SGST, as each requires a separate payment in their respective electronic cash ledgers.
Step 3. Note that you cannot file the GST return until the late fee is paid.
The late fee for each month includes any unpaid late fees from previous months if there was a delay in filing. Additionally, if GST payments are delayed, interest charges will also apply.
For businesses that need to charge GST, it is necessary to file the GST returns on time as specified by the tax department. Missing the deadline can result in heavy penalties and interest. There are various types of GST returns that can be beneficial to the public. However, understanding the various aspects and provisions of the GST law can be complex, especially for non-experts. Therefore, it is advisable to hire a tax expert to answer all your GST-related queries and help you with GST return filing. Book a tax expert now!
As a GST-registered taxpayer, you must file the relevant GST returns, regardless of whether you have any tax liability. Even if there are no transactions for the month, you are required to submit a Nil return. If you only have purchases and no sales, you still need to file GSTR-3B.
GST late fees are automatically added to the next period’s GST return, and payment is mandatory. The system will prevent you from filing your GST return until the late fees are paid.
If you haven't filed your GST returns:
As a registered taxpayer, if you have no outward supply (sales) and no inward supply (purchases) of goods or services in a given tax period, you must file a NIL GST return on the GST portal.
A late fee of Rs. 100 under CGST and Rs. 100 under SGST apply for each day of delay, totaling Rs. 200 per day. However, the total late fee is capped at 0.25% of the taxpayer's turnover in the relevant state or union territory, per the Act.
If a refund is not provided within 60 days of the application, the refund will be paid along with interest at 6% per annum, calculated for the period of delay.
