Late Fees and Interest on GST Return

Late fees and interest forms important components of the Goods and Services Tax (GST) payment and is incurred by business in case of delay in submitting or filing GST returns. The article covers all latest announcements on Late fees and Interest charge in a comprehensive manner!

All about Late Fees under GST

As per GST laws, the late fee is an amount charged for delay in filing GST returns. A prescribed late fees will be charged per each day of delay, when a GST Registered business misses filing GST Returns within the prescribed due dates*. The late fee should be paid in cash and the taxpayer can not use the Input Tax Credit (ITC) avaible in electronic credit legder for payment of late fee.

The late fee is also applicable for the delay in filing NIL returns. For example, one has to pay late fee even though there are no sales or purchases and no GST liability to declare in GSTR-3B.

The late fee will depend upon the number of days of delay from the due date. GST return in GSTR-3B is filed on 23rd January 2019, 3 days after the prescribed due date i.e 20th January 2019. the, the late fees will be calculated for three days and it should be deposited in cash.

However, currently, the GST portal is aligned to charge a late fee only on returns GSTR-3B, GSTR-4, GSTR-5, GSTR-5A, GSTR-6, GSTR-8, GSTR-7 and GSTR-9 only.

Amount of Late fees applicable

FOR ALL GST RETURNS EXCEPT GST ANNUAL RETURNS(GSTR-9)

• As per the GST Acts, for intra-state supplies, the late fee should be paid under both the CGST and SGST Act as follows:

• As per the IGST Act, for inter-state supplies, the late fee is equal to the sum of fees prescribed under both CGST and SGST Act. Hence, Late fee is:

• The Nil return filers must pay the below mentioned late fee:

For example, a Taxpayer has filed GSTR-3B for the month of December 2017 on 23rd January 2018, where actual due date was 20th Jan 2018.

Amount of late fees to be paid would be Rs.150 (Rs. 50 per day  3 days). The late fee would be Rs.75 under CGST and Rs.75 under SGST.

If the above return was a return with ‘Nil’ tax liability then late fees would be Rs. 60 (20 per day  3 days). The late fee would be Rs.30 under CGST and Rs.30 under SGST.

* The original late fees used to be Rs.100 per day under each CGST Act and SGST Act and Rs.200 per day under IGST Act. Also, the original late fee for Nil return filers used to be Rs.25 per day under each CGST Act and SGST Act and Rs.50 per day under IGST Act. However, CBIC has notified reduced late fees for to provide relief for businesses having difficulties in GST return filing.

FOR GST ANNUAL RETURNS(GSTR-9)

Up-to-date List of late fees changes

Following are the changes that have been made on the applicability of the late fees:

Note: Rest of the returns like GSTR-7, GSTR-8, GSTR-5A or GSTR-9 will have late fees applicable to them as per the Act at normal fee.

** If paid before the waiver, this amount will be credited into the electronic cash ledger for use, to pay against the tax liability.
^ The previous notification 6/2018 was cancelled prospectively.

How to deposit Late fees with Government

Amount of Late fee applicable will automatically be calculated by the GST portal while submitting the GST returns.

The Late fee is paid in cash separately for CGST, SGST and IGST in separate electronic cash ledgers. GST return cannot be filed without the payment of the Late fee.

Late fee for the month includes previous month’s late fee charged due to delay in filing of the return. Also, non-payment or late payment of GST attracts Interest.

All about Interest under GST

Interest  is applicable on Late Payment of GST liabilitiy. The interest has to be paid by every taxpayer who:

• Makes a delayed GST payment i.e. pays GST after the due date.
• Claims excess input tax credit
• Reduces excess output tax liability

If GST is not paid within the due dates of filing return Interest at following rates has to be paid:

The Interest has to be calculated from the next day on which tax was due.

For example, a taxpayer fails to make a tax payment of Rs. 10,000 for the month of December 2017, where the due date was 20th January 2018. If he makes the payment on 20th February 2018, the interest for the delay period (31 days: from 21st January till 20th February) will be calculated as follows:

Rs.10,000 * 31/365 * 18% = Rs.153

Thus, it is important to make tax payment and file GST Return within due dates. You can use ClearTax GST Software , which is a one-stop solution to file GST Returns quickly and easily. Use ClearTax GST Software and never miss a deadline.

For Further Reading and Understanding:

• How to Make GST Payment Online
• GST Returns Due Dates
• Claim GST Refund