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The Goods and Services Tax (GST), introduced in 2017 as a completely new taxation regime, has undergone several amendments since its launch. These amendments have often caused confusion among taxpayers, leading to multiple extensions of deadlines for filing the returns and a lesser number of taxpayers complying with the return filing process. Hence, it became imperative to strictly enforce the return filing process by tagging the late fees penalty and interest on late payment of GST dues.

Late filing of GST Returns

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

Late Fees for Non-annual GST Returns

  • If the taxpayer misses out on the GST returns filing deadline, he/she is liable to pay Rs. 100 per day under the CGST Act, and Rs. 100 per day under the SGST Act, taking the total GST late fees per day to Rs. 200.

  • The maximum late fee that the Income-tax department can charge for each return under the GST Act is Rs. 5000.

  • As per the latest amendments of the GST Act, GST late filing penalty has been reduced to Rs. 25 per day under the CGST law and Rs. 25 per day under the SGST law, making it a total of Rs. 50 per day for both intra and interstate supplies.

GST Late Fees for Annual Returns (GSTR-9)

  • The penalty for the late filing of GST annual returns is very much like that of the non-annual returns.

  • A late fee of Rs. 200 per day is levied upon the taxpayer, i.e., Rs. 100 per day under the CGST Act and Rs. 100 per day under the SGST act.

  • The total GST late fees cannot exceed 0.25 percent of the taxpayer’s total turnover for a given financial year.

Late Fees for filing NIL Returns

  • Filing a NIL return is mandatory even if no GST payments were made to the Income Tax department.

  • In case of a delayed filing of NIL returns, a late fee of Rs. 50 per day under the CSGT act and Rs. 50 per day under the SGST act, i.e., a total amount of Rs. 100 per day was levied on the taxpayer.

  • However, this penalty has been reduced to Rs. 20 per day, i.e., Rs. 10 per day under CGST and Rs. 10 per day under SGST, by the recent GST amendments.

However, keeping in view the business woes of small taxpayers amidst the continued lockdowns, it was decided in the recently held 43rd GST Council meeting to provide temporary relief to these taxpayers for a limited period in terms of late fees for pending returns. Here’s a detailed list of late fee relaxations provided to the taxpayers on their pending returns:

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

Capped to Rs. 1000 (Rs. 500 each under CGST and SGST) per return for other taxpayers

Form GSTR-3B

(Taxpayers with AATO upto 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

Capped to a maximum of Rs. 2000 (Rs. 1000 each under CGST and SGST) per return for others

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 on Late Payment of GST

Interest is levied upon GST payments beyond a given due date. Interest is usually paid by taxpayers in the following scenarios:

  • In case of a delayed GST payment after the due date – an interest of 18 percent per annum is applicable from the next day of the due date.

  • When the taxpayer avails excess input tax credit or diminishes excess output tax liability – an interest of 24 percent per annum is levied.

In addition to the recent relief measures granted to the taxpayers regarding GST late fees, further relaxations have been granted to the taxpayers for interest on GST late payment. Here’s a table encapsulating the renewed interest on late payment of GST for the March and April 2021 period:

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 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

The above slew of temporary relief measures aimed at a GST late fee waiver and reduction of interest on payment of GST dues ensure that small and large taxpayers can ease their financial burden and comply with the GST norms. Further, you may get a lot of information on late fees and interest on GST late payment on Finserv MARKETS. In addition to being a valuable source of GST information, Finserv MARKETS serves a financial services marketplace, where you can choose from a variety of loan products that could help you avail credit for your financial needs.

 

Learn more about compounding of offences under GST