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Late Fees and Interest on GST Return

Updated on

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!

Latest Updates

28th May 2021

As per the outcome of 43rd GST Council meeting and CBIC notification, following are the updates:

  1. Amendment to Section 50 vide Finance Act 2021 has been notified by the CBIC which came into effect from 1st July 2017. As per the amendment, interest shall be computed on the net tax liability to be debited from electronic cash ledger after ITC is utilised.
  2. The much awaited GST amnesty scheme was given a go ahead. As per the announcement, those taxpayers who haven’t filed GSTR-3B for any earlier tax periods between July 2017 to April 2021 can file now between 1st June 2021 up to 31st August 2021 with reduced maximum late fee as follows:
    • Maximum late fee has been capped at a maximum of Rs 500 per return ( i.e Rs. 250/- each for CGST & SGST) in case of nil GSTR-1 and GSTR-3B filing
    • Maximum late fee is Rs 1000 per return ( i.e Rs. 500/- each for CGST & SGST) for other taxpayers.
  3. Late fee has been rationalised for future tax periods in case of GSTR-3B, as follows:
    • In case of nil GSTR-3B filing, the maximum late fee charged shall be capped at Rs.500 per return (i.e Rs. 250/- each for CGST & SGST).
    • In GSTR-1 and GSTR-3B other than nil filing, maximum late fee is fixed based on annual turnover slab, as follows:
      • If the annual turnover in the previous financial year is upto Rs.1.5 crore then the late fee of maximum Rs 2,000 per return can only be charged (i.e Rs.1000 each for CGST and SGST).
      • If the turnover ranges between Rs.1.5 crore and Rs.5 crore then the maximum late fee of Rs.5,000 per return can only be charged (i.e Rs. 2500 each for CGST and SGST).
      • If the turnover is more than Rs.5 crore then late fee of maximum Rs.10,000 (i.e Rs. 5000 per CGST and SGST) can be charged.
  4. For any delayed submission of PMT-06 by QRMP taxpayers for April 2021 and May 2021, interest relief has been provided as follows:
    • For April 2021, No interest is charged for delayed submission up to 9th June, whereas 9% of reduced interest is charged between 10th June and 9th July, and 18% of interest is charged thereafter.
    • For May 2021, No interest is charged for delayed submission up to 10th July, whereas 9% of reduced interest is charged between 11th and 25th July, and 18% of interest is charged thereafter.
  5. The late fee and interest relief has been extended for a further period for filing GSTR-3B for March, April and May 2021. Read our article 43rd GST Council meeting to know the period of relief.
1st May 2021

Late fee for GSTR-3B:

  1. Late filing fee for those with turnover more than Rs.5 crore in the preceding financial year, is waived off for filing of GSTR-3B of March and April 2021 done within first 15 days from the respective due dates.
  2. Late filing fee for those with turnover up to Rs.5 crore in the preceding financial year, is waived off for filing of GSTR-3B of March and April 2021 (if filed monthly) or Jan-Mar 2021 (if filed quarterly) done within first 30 days from the respective due dates.

Interest waiver for GSTR-3B and PMT-06:

The interest charged for late filing of GSTR-3B has been relaxed as follows:

(a) Turnover is more than Rs.5 crore in the preceding financial year and GSTR-3B is filed on a monthly basis, interest is reduced/waived off for April and May 2021 (Due date: 20th May or 20th June) as follows: Interest reduced to 9% for filing on or before 5th May (4th June), but charged at 18% thereafter.

(b) Turnover is up to Rs.5 crore in the preceding financial year and GSTR-3B is filed on a monthly basis, interest is reduced/waived off for April and May 2021 (Due date: 20th May or 20th June) as follows: No interest for filing on or before 5th May (4th June), interest reduced to 9% for filing between 6th May (5th June) and 20th May (19th June), but charged at 18% thereafter.

(c) Turnover is up to Rs.5 crore in the preceding financial year and GSTR-3B is filed on a quarterly basis, interest reduced/waived off for Jan-Mar 2021 (Due date: 22nd/24th April) as follows: No interest for filing on or before 7th May (9th May), interest reduced to 9% between 8th May (10th May) and 21st May (23rd May), but charged at 18% thereafter.

(d) The interest for late submission of form PMT-06 to pay tax as a QRMP scheme taxpayer is reduced or waived off as follows for April 2021: No interest for filing on or before 9th June, interest reduced to 9% for filing between 10th June and 25th June, but charged at 18% thereafter.

1st February 2021 Union 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.

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:
Sl no GST returns Return Period Applicability of Late fee Link to Notification
1 GSTR-1 July 2017 onwards Reduced Late fee** 4/2018
GSTR-1 if filed between 22nd Dec 2018 to 31st Mar 2019 July 2017 – September 2018 Waived off completely** 75/2018
GSTR-1 for some regions July 2019 Waived off completely for taxpayers in certain districts of the flood-affected States and all districts of J&K 41/2019
GSTR-1 if filed between the period from 19th December 2019 to 10th January 2020 July 2017 – November 2019 Waived off completely 74/2019
GSTR-1 Months March 2020 – April 2020 and Quarter ending 31st March 2020 Waived off completely if filed before the specified dates of June-July 2020. 33/2020
GSTR-1 Months March 2020 – June 2020 and Quarter ending 31st March 2020 and 30th June 2020 Waived off completely if filed before the specified dates of July-August 2020. 53/2020
2 GSTR-3B July 2017 -September 2017 Waived off completely** Condition to be satisfied:If the date of filing was before 22nd December 2018 28/2017 and 50/2017
October 2017 onwards Reduced Late fee** Condition to be satisfied:If the date of filing was before 22nd December 2018 64/2017
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 22/2018
GSTR-3B submission made but not filed due to a technical glitch October 2017 only Waived off completely** 41/2018
GSTR-3B if filed between 22nd Dec 2018 to 31st Mar 2019 July 2017 -September 2018 Waived off completely** 76/2018
GSTR-3B if filed beyond 31st March 2019 July 2017 -September 2018 Reduced Late fee** 76/2018
GSTR-3B October 2018 onwards Reduced Late fee** 76/2018
GSTR-3B February 2020 – April 2020 Waived off completely if the filed before the staggered specified dates of June-July 2020. 32/2020
GSTR-3B 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.
52/2020
GSTR-3B 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. 57/2020
3 GSTR-4 July 2017 onwards Reduced Late fee** 73/2017
GSTR-4 filed within due date, but late fee erroneously levied on GST portal October 2017 to December 2017 Waived off completely** 41/2018
GSTR-4 if filed between 22nd Dec 2018 to 31st Mar 2019 July 2017 -September 2018 Waived off completely** 77/2018
GSTR-4 if filed beyond 31st Mar 2019 July 2017 -September 2018 Reduced Late fee** 77/2018
GSTR-4 October 2018 onwards Reduced Late fee** 73/2017
4 GSTR-5 July 2017 onwards Reduced Late fee** 5/2018
5 GSTR-5A July 2017 onwards Reduced Late fee** 6/2018
GSTR-5A Returns for July 2017 onwards filed on or after 7th Mar 2018 Full Late fee applicable^ 13/2018
6 GSTR-6 July 2017 onwards Reduced Late fee** No late fees for the delay in filing a Nil return 7/2018
GSTR-6 filed between the period 1st January 2018-23rd January 2018 For any tax period prior to January 2018 Completely waived off** 41/2018
GSTR-6 July 2019 Waived off completely for for taxpayers in certain districts of the flood-affected States and all districts of J&K 41/2019
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. image 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. image 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.

For Further Reading and Understanding: