What Are Late Fees And Interest Rates For GST Returns

The Goods and Services Tax (GST), introduced in 2017 as a totally new taxation regime, has undergone several amendments since its launch. These amendments have often caused confusion among taxpayers, resulting in multiple extensions of deadlines for filing the returns and a lesser number of taxpayers complying with the return filing process. As a result, it became critical to tightly enforce the return filing procedure by attaching late fines and interest on late GST payments.

Late filing of GST Returns 

Any delay in filing the GST returns before the deadlines (including extensions, if any) as prescribed by the taxation department is deemed non-compliance and attracts a strict penalty as per the GST Act. The penalty amount depends on the number of delayed days from the date and is determined supported by the sort of returns filing that will broadly be classified into three categories:

Non-annual GST Returns Late Fees:

  • If a taxpayer misses the deadline for filing GST returns, he or she would be charged Rs. 100 per day under the CGST Act and Rs. 100 per day under the SGST Act, bringing the total GST late fees per day to Rs. 200.
  • Under the GST Act, the Income-tax department can assess a maximum late fee of Rs. 5000 for each return.
  • The GST late filing penalty has been decreased to Rs. 25 per day under the CGST legislation and Rs. 25 per day under the SGST law, for a total of Rs. 50 per day for both intrastate and interstate supplies, thanks to recent revisions to the GST Act.

Late Fees on GST Annual Returns (GSTR-9)

  • The penalty for late filing of GST annual returns is similar to the penalty for late filing of non-annual returns.
  • The taxpayer is charged a late fee of Rs. 200 per day, i.e. Rs. 100/- per day under the CGST Act and Rs. 100/- per day under the SGST Act. 
  • The total GST late fees for a given financial year cannot exceed 0.25 percent of the taxpayer’s total turnover.

Fees for late submission of NIL returns 

  • Even if no GST payments were made to the Income Tax Department, a NIL return must be filed. 
  • In the case of late filing of NIL returns, the taxpayer was charged a late fee of Rs. 50/- per day under the CSGT act and Rs. 50/- per day under the SGST act, for a total of Rs. 100 per day. 
  • The new GST modifications, however, have lowered this penalty to Rs. 20 per day, i.e. Rs. 10 per day under CGST and Rs. 10 per day under SGST.

GSTR Form

Tax Period

The Period In Which Returns Shall Be Furnished

Late Fee Applicable

Form GSTR-3B July 2017 to April 2021 Between 1 June 2021 and 31 August 2021 Capped to Rs. 500 (Rs. 250 under CGST and Rs. 250 under SGST) per return for taxpayers without any tax liability during the said tax period
Form GSTR-3B

 

(Taxpayers with AATO up to Rs. 1.5 Crores)

Preceding year Prospective Taxation period Capped to a maximum of Rs. 2000 (Rs. 1000 each under CGST and SGST)
Form GSTR-3B (Taxpayers with AATO between Rs. 1.5 Crores and Rs. 5 Crores) Preceding year Prospective Taxation period Capped to a maximum of Rs. 5000 (Rs. 2500 each under CGST and SGST)
Form GSTR-3B (Taxpayers with AATO more than Rs. 5 Crores) Preceding year Prospective Taxation period Capped to a maximum of Rs. 10000 (Rs. 5000 each under CGST and SGST)
Form GSTR-4

 

(For Composite Taxpayers)

Preceding year Prospective Taxation period Capped to Rs. 500 (Rs. 250 under CGST and Rs. 250 under SGST) per return for taxpayers with NIL tax liability
Form GSTR-7 Preceding year Prospective Taxation period Reduced to Rs. 50 per day (Rs. 25 SGST and Rs. CGST) and capped to a maximum of Rs. 2000 (Rs. 1000 each under CGST and SGST) per return

Interest in GST Overdue Payments

 GST payments that are made beyond the due date are charged interest. In the following cases, 

  • Taxpayers are typically required to pay interest: If you pay your GST beyond the due date, you will be charged interest at the rate of 18% per year starting the day after the due date.
  • When a taxpayer takes advantage of an excess input tax credit or reduces an excess output tax burden, interest of 24 percent per year is charged.

In addition to the previous relief measures for GST late fees, taxpayers have been awarded further relief for interest on GST late payments. Here’s a table summarising the reintroduced interest on late GST payments for the months of March and April 2021:

Taxpayer and Return Type Tax Period Taxpayer Class based on AATO Filing Due Date Reduced Rate of Interest Waiver of Fee till
First 15 days from Due Date Next 15-days From the 31st day onwards  
Normal taxpayers filing monthly returns in Form GSTR 3B March 2021 Upto Rs. 5 Crores 20 April 2021 Nil 9 percent 18 percent 20 May 2021
More than Rs. 5 Crores 20 April 2021 9 percent 18 percent 18 percent 5 May 2021
April 2021 Upto Rs. 5 Crores 20 May 2021 Nil 9 percent 18 percent 19 June 2021
More than Rs. 5 Crores 20 May 2021 9 percent 18 percent 18 percent 4 June 2021
Taxpayers under QRMP scheme filing quarterly returns March 2021 Form GSTR-3B (quarterly) 22/24 April 2021 Nil 9 percent 18 percent 22/24 May 2021
April 2021 Form GST PM-06 Challan 25 May 2021 Nil 9 percent 18 percent Not Applicable