GST return Late fees and Interest rate charges on Late Filing of GST Return

Late fees and interest are significant components of the Goods and Service Tax (GST) payment, and businesses must pay them if they fail to submit or file GST reports on time. This article includes information on GST Return late fees, Interest on GST late payment, GST late fees for Nil Returns, and information on the rate of interest on late payment of GST (Goods and Service Tax). Before walking you through the late payment fees and interest rate for GST, let’s have a quick look at what is GST (Goods and Service Tax).

What is GST (Goods and Service Tax)?

GST stands for goods and service tax. The goods and services tax (GST) is a value-added indirect tax levied on most goods and services sold for domestic consumption. The GST is paid via GST Return by consumers, but it is remitted to the government by the businesses selling the goods and services.

General Information on GST Return Late Fees

According to the GST Legislation, a late fee is an amount imposed 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 levied for each day of delay.

The late fee must be paid in cash, and the taxpayer cannot use the ITC (Input Tax Credit) available in the computerized credit ledger to pay the late fee. The late fee also applies to nil returns that are not filed on time. Even if there are no sales or transactions and no GST liability to declare in the GSTR-3B, one must pay a late fee.

The late fee is calculated based on the number of days past the due date. The GSTR-3B GST return is due on the 23rd of January 2021, three days after the specified due date of the 20th of January 2021. The late fees will be calculated for a period of three days and must be paid in cash.

GST Return Late Fees

The amount of late fees is determined by the type of return being filed. The three categories are as follows

• Late Fees for Annual GST (Goods and Service Tax) Return
• Late Fees for Nil GST Return
• Late Fees for Non-Annual GST Return

Annual GST returns are subject to late costs of INR 100 per day under CGST law and INR 100 per day under SGST law. As a result, a total of INR 200 per day is applicable until late costs are paid. The maximum penalty amount for a given financial year cannot exceed 0.25 percent of the taxpayer’s total turnover.

A Nil GST Return must be filed within the specified time frame even if there is no GST return amount to be paid to the tax authority. If you miss the deadline for filing your NIL returns, you will be charged a late fee on a per-day basis. INR 50 is charged each day under the CGST Act, while INR 50 is charged per day under the SGST Act. In total, a late cost of INR 100 per day is paid for late filing NIL returns until the date of fee payment.

If the taxpayer fails to file the Non-Annual GST return on time, the CGST Act imposes a late cost of Rs. 100 and the SGST Act imposes a late fee of Rs. 100. As a result, a daily late fee of INR 200 is charged. Every day until the returns are filed and the late fees are paid, this fee accumulates. The total amount collected cannot exceed INR 5000. Even for interstate goods, the per day and maximum amounts apply.

Interest Rate on Late Filing of GST Return

GST Return Late Payment Fees

GSTR 1 and GSTR 3b

• In case of Nil GST Return filing the maximum penalty on late filing will be INR 500 (250 CGST + 250 SGST).

• If the preceding financial year’s annual turnover was less than INR1.5 crore, a late fee of up to INR 2,000 per report can be levied (INR 1000 each for CGST and SGST).

• Only a maximum late fee of INR 5,000 per return can be levied if the turnover is between INR 1.5 crore and INR 5 crore (INR 2500 each for CGST and SGST).

• A late fee of up to INR 10,000 (INR 5000 per CGST and SGST) might be levied if the turnover exceeds INR 5 crore.

GSTR 4 and Quarterly GSTR 4 Filing Late Fees

• For GSTR 4  annually filing maximum late fee that can be charged is INR 500, while for other than nil filing, it is INR 2,000.

• If the GSTR 4 return (Quarterly) is filed between September 22nd and October 31st, 2020, the maximum late fee is INR 500 per return.

GSTR 5 and GSTR 5A Late Filing Fees

• For late filing of GSTR 5 is INR 50 per day and for a Nil returns it is INR 20 Per day.

• A penalty of INR 200 per day, up to INR 10,000, can be imposed for the late filing of a GSTR-5A return.

• If no return is required to be filed during the registration time, late costs of INR 20 per day and a maximum of INR 10,000 will be charged for each return filed late.

FAQs on GSTR Late Filing and Interest Rate

1. Is filing a GSTR as a NIL transaction required?

Yes, if you have a GST registration number, you are required to file a GSTR. If you haven’t made any purchases or sales, you’ll need to file a NIL GSTR. Late costs apply if you do not file your GST return on time. INR 50 is charged each day under the CGST Act, while INR 50 is charged per day under the SGST Act. As a result, you will be subject to a daily penalty of INR 100. An interest rate of 18 percent per year is added to the penalty amount. 

2. What will be the Late Fees of GSTR 10?

GSTR-10 late fees are INR 200 per day (INR 100 for CGST and INR 100 for SGST). The amount of the punishment has no upper limit. Late fines must be paid for your return to be filed. 

3. I don’t have any GST Returns to pay. Is it possible for me to file my GSTR?

You can, of course, file a GST return. It is a NIL return that has been filed. There are two instances in which you can file a GSTR without paying any tax. In one case, there maybe no purchases or sales made during the year, resulting in no transactions. As a result, you can submit a NIL transaction return. Another scenario is that you have purchased products or services but have not yet made a sale. As a result, you must file GSTR-3B and claim the input tax credit because you paid GST when making the purchase.

4. What will be the Late Fees for GSTR 9 and GSTR 9A? 

GSTR-9 and GSTR-9A late fees are Rs. 200 per day (INR 100 for CGST and INR 100 for SGST) up to 0.50 percent (0.25 percent for CGST and 0.25 percent for SGST) of revenue.

Conclusion

To encourage timely payment and filing of taxes, the government imposes interest and late fees. Every delay is automatically accounted for in the GSTR-3B by the GST Portal, and no return is filed unless payment is paid. Any waivers are repaid to the Cash ledger and can be used by the taxpayer later.

Late fees are determined automatically and are reported in the GSTR-3B for the following month. Interest, on the other hand, must be computed manually and filed into the GSTR-3B for payment. For CGST, SGST, and IGST, late fees and interest must be paid in cash separately. Input Tax Credits cannot be used to pay off GST penalties. For both online and offline GST payments, a challan is required.