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!
1st February 2021Union Budget 2021 outcome: Section 50 of the CGST Act is being amended to provide for a retrospective charge of interest on net cash liability with effect from the 1st July 2017.25th August 2020 CBIC has notified 1st September 2020 as the date from when interest will be calculated on net tax liability basis, on the amount left after adjusting the eligible ITC.30th June 2020The maximum late fee to be capped at Rs 500 per return, for the tax periods given below, filed after the deadlines given in notification 52/2020 (as listed in the below at sl no 2 dated 24th June 2020) but before 30th September 2020, whereas nil return to not be charged any late fee.
For turnover more than Rs 5 crore: May 2020 – July 2020
For turnover equal to or below Rs 5 crore: February 2020 – July 2020
24th June 20201. The CBIC has waived/reduced late fees for the late filing of GSTR-3B returns for the period July 2017 to January 2020, as follows-
a) If GST liability is Nil, and the GSTR-3B return is filed between 1st July, 2020 and 30th September, 2020, then the amount of late fees stands waived.
b) If the GST liability is not Nil, and the GSTR-3B return is filed between 1st July, 2020 and 30th September, 2020, then the amount of late fees stand waived in excess of Rs.250* under the CGST Act.
*Rs.500 will be the total amount payable, Rs.250 under CGST and Rs.250 under SGST.
The CBIC has notified the due dates applicable, with regard to interest and late fees for filing GSTR-3B. Here is a list of the notified dates from February to August 2020:
Annual Turnover in the Previous FY
Period
Due date
Last date without late fee or interest, as applicable
More than Rs.5 crore
Feb 2020
20th Mar 2020
24th Jun 2020*
Mar 2020
20th Apr 2020
Apr 2020
20th May 2020
May 2020
27th Jun 2020^^
27th Jun 2020
Jun 2020
20th Jul 2020
20th Jul 2020
Jul 2020
20th Aug 2020
20th Aug 2020
Aug 2020
20th Sept 2020
20th Sept 2020
Up to Rs. 5 crore in category A# States/UTs
Feb 2020
22nd Mar 2020
30th Jun 2020^
Mar 2020
22nd Apr 2020
3rd Jul 2020^
Apr 2020
22nd May 2020
6th Jul 2020^
May 2020
12th Jul 2020
12th Sept 2020^
Jun 2020
22nd Jul 2020
23rd Sept 2020^
Jul 2020
22nd Aug 2020
27th Sept 2020^
Aug 2020
1st Oct 2020**
1st Oct 2020
Up to Rs. 5 crore in category B## States/UTs
Feb 2020
24th Mar 2020
30th Jun 2020^
Mar 2020
24th Apr 2020
5th July 2020^
Apr 2020
24th May 2020
9th July 2020^
May 2020
14th Jul 2020
15th Sept 2020^
Jun 2020
24th Jul 2020
25th Sept 2020^
Jul 2020
24th Aug 2020
29th Sept 2020^
Aug 2020
3rd Oct 2020**
3rd Oct 2020
#Category A: Chhattisgarh, Madhya Pradesh, Gujarat, Maharashtra, Karnataka, Goa, Kerala, Tamil Nadu, Telangana, Andhra Pradesh, the Union Territories of Daman and Diu and Dadra and Nagar Haveli, Puducherry, Andaman and Nicobar Islands and Lakshadweep.##Category B: Himachal Pradesh, Punjab, Uttarakhand, Haryana, Rajasthan, Uttar Pradesh, Bihar, Sikkim, Arunachal Pradesh, Nagaland, Manipur, Mizoram, Tripura, Meghalaya, Assam, West Bengal, Jharkhand, Odisha, the Union Territories of Jammu and Kashmir, Ladakh, Chandigarh and Delhi.*No interest charged if GST dues are paid before 4th Apr, 5th May and 4th Jun for Feb, Mar & Apr respectively. But, interest applies from the 16th day at a reduced rate of 9% p.a. up to the date of actual payment, if paid before 24th Jun 2020. If not, then interest is charged in a staggered manner as given above plus interest at 18% p.a. will apply from the next day after 24th Jun 2020 up to the actual date of filing. In that case, a late fee will apply from the due date until the actual date of filing.^^The due date was extended via CGST notification no. 36/2020 dated 3rd Apr 2020.^Thereafter, a reduced interest rate at 9% p.a. will apply if taxpayer files on or before 30th Sept 2020. If not, then interest applies in a staggered manner as given above plus interest at 18% p.a. will apply from the next day after 30th Sept 2020 up to the actual date of filing. In that case, a late fee will apply from the due date until the actual date of filing.**The due date was extended via CGST notification no. 54/2020 dated 24th Jun 2020.
8th June 2020
A nil GSTR-3B can be filed via SMS using the registered mobile number and OTP verification. The CBIC has notified the date of applicability as 8th June 2020, from which nil returns can be filed through SMS.
23rd March 2020
For businesses with less than Rs 2 crore aggregate turnover in FY 2017-18 and FY 2018-19, no late fee will be charged for the delayed filing of GSTR-9.*
*CBIC notification is due.
10th January 2020
The late fee waiver for GSTR-1 for the period July 2017 to November 2019, further extended till 17th January 2020 from 10th January 2020.
26th December 2019
The late fee waived off for GSTR-1 for the period July 2017 to November 2019, if the taxpayer submits the return before 10th January 2020.
31st August 2019
The late fees for July 2019’s GSTR-1(filed monthly) and GSTR-6 have been waived off for the taxpayers having a principal place of business in certain districts of the flood-affected States of Bihar, Gujarat, Karnataka, Kerala, Maharashtra, Odisha, and Uttarakhand and all districts of J&K.
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:
Name of the Act
Late fees for every day of delay
Central Goods and Services Act, 2017
Rs 25*
Respective State Goods and Services Act, 2017 (or) Union territory Goods and Services Act, 2017
Rs 25*
Total Late fees to be paid
Rs 50*
The law has fixed a maximum late fees of Rs 5,000. This means that in any case, the maximum late fees that can be charged by the Government is Rs 5,000 each return being filed under each Act.
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:
Name of the Act
Late fees for every day of delay
Integrated Goods and Services Act, 2017
Rs 50*
The law has fixed a maximum late fees of Rs 5,000. This means that in any case, the maximum late fees that can be charged by the Government is Rs 5,000 each return being filed under the Act.
The Nil return filers must pay the below mentioned late fee:
For Nil Return filers
Name of the Act
Late fees for every day of delay
CGST Act
Rs 10*
SGST Act
Rs 10*
IGST Act
Rs 20*
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)
Name of the Act
Late fees for every day of delay
Central Goods and Services Act, 2017
Rs 100*
Respective State Goods and Services Act, 2017 (or) Union territory Goods and Services Act, 2017
Rs 100*
Total Late fees to be paid
Rs 200*
The law has fixed a maximum late fees of an amount calculated at 0.25% of the Turnover for the financial year.
Up-to-date List of late fees changes
Following are the changes that have been made on the applicability of the late fees:
GSTR-3B was yet to be filed by those who submitted TRAN-1 on GST portal, but could not file it by 27 Dec 2017
October 2017-April 2018
Waived off completely**Condition to be satisfied:Such registered persons have filed the declaration in FORM GST TRAN-1 on or before the 10th May 2018 and the return in FORM GSTR-3B for each of such months, on or before the 31st May 2018
1. For turnover more than Rs 5 crore (February 2020 – April 2020) 2. For turnover equal to or less than Rs 5 crore (February 2020 – July 2020) 3. Pending for months July 2017 – January 2020
1. & 2. Waived off completely if the filed before the staggered specified dates of June-September 2020. 3. The maximum late fee to be capped at Rs 500 per return filed between 1st July 2020 and 30th September 2020, whereas Nil return attracts no late fee.
For turnover more than Rs 5 crore May 2020 – July 2020 For turnover equal to or less than Rs 5 crore February 2020 – July 2020
The maximum late fee to be capped at Rs 500 per return filed after the dates given in notification 52/2020 but before 30th September 2020, whereas nil return to not be charged any late fee.
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.
Quick View: Late Fees for GST Return as per GST Act
All returns except Annual Returns: Rs. 50 per day (Rs. 25 CGST + Rs. 25 SGST) of default up to a maximum of Rs 5,000.
Annual Returns: Rs. 200 per day (Rs. 100 CGST + Rs. 100 SGST) of default up to a maximum of 0.25% of Turnover.
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:
Particulars
Interest
Tax paid after due date
18% p.a.
Excess ITC Claimed or excess reduction in Output Tax
24% p.a.
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.
