written by Khatabook | June 29, 2021

Late Fees and Interest on GST Return

The Goods and Service Tax is chargeable upon the ‘Supply’ of Goods or Services. Once the supply occurs, the other factors and events are considered like ‘Time of Supply’, ‘Value of supply’, ‘Place of Supply’. GST is charged on the Value of Supply. This GST is calculated as Net of Output Tax after adjustment of Input Tax. It must be paid on the GST Portal and gets reflected in Cash and Credit Ledger on the portal. 

 Upon Filing of GSTR-3B, the payable amount is generated and reflected in the Liability Ledger on the GST Portal. This liability is setoff and cleared by depositing and using the amount in the Cash and Credit Ledger as per the rules in the GST Act. This process of payment of Tax against the GST Liability is done through the filing of GSTR-3B 

However, there is a due date to file the GSTR-3B and other GST returns. If the return is not filed within the Due Date, a penalty is charged for the delay which must be paid into the Cash Ledger. Only then the Return is eligible for filing. This penalty charge is classified as:

  1. Late Fees and
  2. Interest

Both the above amounts of penalties arise upon delay in Return Filing.

Late Fees And Interest On Delay In Filing GST Returns

Late Fees in GST

Late Fees are the penalty charged for delay in filing GST Returns on a per-day basis. It is very important here to note the Due dates of GSTR-3B. It is a monthly summary statement showing the details of Total Output Taxes, Total Input Taxes, and the final Liability payable and paid for a given month. In general cases, this Due date for a month falls on the 20th of the succeeding month. 

However, the Govt. may notify extension of Due dates for certain months. In such cases, these extended dates are to be considered as Due dates of GSTR-3B. 

GST late fees are charged for the number of days of delay in filing the GST returns. These late fees reflect in GSTR 3B and are to be paid in Cash on the GST Portal.

Late Fees Penalty for GSTR-3B

The table below summarizes the Late Fees charged for all GST Returns except GSTR-9 (Annual Return)

  • For Intra-state supplies, where CGST and SGST/UTGST are applicable.

Sr. No.

Type of Tax

Late Fees per Day of delay

1

CGST

Rs. 25

2

SGST

Rs. 25

 

Total Late Fees

Rs. 50

 

Maximum late fees charged is Rs 5000/- for each return filed under each Act.

Also Read: The GST Amendment Act 2018 Explained

  • For Inter-state supplies, where IGST is applicable.

Sr. No.

Type of Tax

Late Fees per Day of delay

1

IGST

Rs. 50

 

Total Late Fees

Rs. 50

 

Maximum late fees charged is Rs 5000/- for each return filed under each Act.

  • For NIL Returns,

Sr.No.

Type of Tax

Late Fees per Day of delay

1

CGST

Rs. 10

2

SGST

Rs. 10

3

IGST

Rs. 20

 

  • For GSTR-9 (GST Annual Returns),

Sr.No.

Type of Tax

Late Fees per Day of delay

1

CGST

Rs. 100

2

SGST

Rs. 100

 

Total Late Fees

Rs. 200

 

Maximum Late Fees must be an amount calculated at 0.25% of the Turnover for the Financial Year.

GST 3B Late Fee Waiver

The Government issued the GST Late Fee waiver notification 2020, to waive or reduce the penalties on delay in filing GST Returns.

For the GSTR-3B Returns filed from July 2017 to January 2020, late fees were waived or reduced as given-

  • If GST Liability is Nil and GSTR-3B is filed between 1st July 2020 and 30th September 2020, then the entire amount of Late Fees is waived.
  • If the GST Liability is not Nil and GSTR-3B filed between 1st July 2020 and 30th September 2020, then the amount of Late fees is restricted to Rs. 250/- under CGST Act and 250/- under SGST Act, Total being Rs. 500/-.

Calculation of Late Fees

Let us consider GSTR-3B for March 2021. The Due Date is 20th April 2021. If the Return is delayed and filed on 25th April 2021, that means 5 days delay. Therefore GST Late Fees will amount to a total of Rs. 250/- (Rs. 25 for each CGST and SGST for 5 Days)

Hence, Late Fees are a fixed amount set per day of delay. They do not depend on the tax amount payable.

Interest on Late Payment of GST

Unlike GST Late fees, Interest is payable on the GST liability. Therefore the amount of interest would depend on the GST amount, the interest rate and period of delay. 

Interest on GST Late payment arises on the below occasions:

  1. When a delayed payment is done after the due date of GST Return
  2. When excess Input Credit (ITC) is claimed
  3. When excess Output Tax liability is reduced.

GST Interest Rates applicable:

Sr. No.

Particulars

Interest Rates

1

Tax paid after Due Date

9% for the first 15 days, thereafter 18% p.a.

2

Excess ITC claimed or Excess output tax reduced

24% p.a.

 

GST Interest Calculation

Unlike Late Fees, Interest on GST is calculated as a percentage of Tax Liability for the delay period after the due date.

For Example,

The Due Date for GST Payment for April 2021, is 20th May 2021, and the amount of Net Tax payable is Rs. 10000/-. However, the Tax payment is done on 25th May 2021. Here there is a delay of 5 days. Therefore, the Interest penalty amounts to Rs. 12/- (Rs. 10000 * 5/365 * 9%). However, if you make the payment anytime after 5th June 2021 (15 days from due date), the rate of interest changes to 18%.

CBIC, on 10th November 2020, has notified the due dates for GST payments for the period of January 2021 onwards, based on the PY (Previous Financial Year - In case of Financial Year 2021-2022, PY is 2020-2021) Annual Turnover.

  • For Annual Turnover of PY more than 5 Crores for all states and UTs

 

Return Period

Due Date Notified

Due Date to Avail Lower Rate of Interest

Date from which higher rate applies

April 2021

20th May 2021

5th June 2021

6th June 2021

May 2021

20th June 2021

5th July 2021

6th July 2021

June 2021

20th July 2021

NA

NA

July 2021

20th August 2021

NA

NA

August 2021

20th September 2021

NA

NA

September 2021

20th October 2021

NA

NA

October 2021

20th November 2021

NA

NA

November 2021

20th December 2021

NA

NA

December 2021

20th January 2022

NA

NA

 

A lower rate of interest of 9 per cent for the first 15 days from the due date of payment of tax and 18 per cent thereafter, for the tax payable for tax periods March 2021, April 2021, and May 2021 payable in April 2021, May 2021 and June 2021 respectively, as per a CBIC notification in May 2021.

Information is awaited from CBEC regarding the rest of the months.

  • For Annual Turnover of PY up to Rs. 5 Crore

In the States of 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 the Nicobar Islands and Lakshadweep the due date for GST payment is notified as 22nd day on the next month. So for April 2021, the payment due date will be 22nd May 2021.

  • For Annual Turnover of PY up to Rs. 5 Crore

In the States of 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, the due date is notified as the 24th day of the next month.

Also Read: GST Calculator Online Goods and Services Tax Calculator

GST Amnesty Scheme for GSTR 3B Late Fees (Changes notified for 2021)

On 28th May, 2021, the Finance Ministry notified the GST Amnesty Scheme for GSTR 3B Late fees in the press release. Through this scheme, taxpayers can avail benefits of reduction in burden of Late fee penalties for all the pending returns since July 2017 till April 2021 by filing the same on or before 31st August, 2021.

Late Fees relaxation is given as follows-

1] For GSTR 3B and GSTR 1

Particulars

Relaxation (Amount Capped)

A] Taxpayers with Nil Tax Liability

Rs. 500/- (CGST and SGST each Rs. 250/-) per return.

B] Taxpayers having Tax Liability

 
  1. Aggregate Turnover upto Rs. 1.5 Crore in Previous Financial Year

Rs. 2000/- (CGST and SGST each Rs. 1000/-) per return.

  1. Aggregate Turnover between Rs. 1.5 crores and Rs. 5 Crores in Previous Financial Year.

Rs. 5000/- (CGST and SGST each Rs. 2500/-) per return.

  1. Aggregate Turnover above Rs. 5 Crores in Previous Financial Year.

Rs. 10,000/- (CGST and SGST each Rs. 5000/-) per return.

 

2] Late fee relaxation of GSTR 4 for prospective periods from June 2021 onwards.

 

Particulars

Relaxation (Amount Capped)

  1. Taxpayers having nil Tax liability or Nil Return.

Rs. 500/- (CGST and SGST each Rs. 250/-) per return.

  1.  For other Taxpayers  

Rs. 2000/- (CGST and SGST each Rs. 1000/- per return.

 

3] Late Fee relaxation for GSTR 7 for Prospective Tax periods from June 2021 onwards.

 

Particulars

Relaxation (Amount)

  1. Regular Late fee payable for delayed furnishing of GSTR 7

Rs. 50 per day (CGST and SGST Rs. 25/- each) per return.

  1. Capped maximum amount of Late fees

Rs. 2000/- (CGST and SGST Rs. 1000/- each) per return.

Also Note:

As per the Amnesty scheme notified,

  1. For Taxpayers having Turnover upto Rs. 5 Crores in Previous FY, and liable to furnish return under section 39(1),
  1. For the period of March 2021 - Late fee waived for 60 days from due date of furnishing return.
  2. For the period of April 2021 - Late fee waived for 45 days from the due date of furnishing return.
  3. For the period of May 2021 - Late fee waived for 30 days from the due date of furnishing return.
  4. For GSTR 1 quarter ended March 2021 - Late fee waived for 60 days from the due date of furnishing return.

     2)  For Taxpayers having Turnover above Rs. 5 Crores in Previous FY, and liable to furnish return under section 39(1), for the periods March 2021, April 2021 and May 2021, the late fees waived for 15 days from the due date of furnishing the GST returns.

A Quick Summary for Late Fees Changes from the introduction of GST Law.

  • GSTR-3B

Period: July 2017 to September 2017 - Waived off if return filed before 22nd December 2018

Period: October 2017 onwards - Reduced Late fees if filed before 22nd December 2018.

Period: October 2017 to April 2018 – Those who submitted TRAN-1 but couldn’t file it and GSTR-3B by 27/12/2017 – Waived off completely with a condition that such taxpayers file a declaration along with TRAN-1 on or before 10/5/2018 and the Return in Form GTSR 3B for such months on or before 31/5/2018.

Period: October 2017 – Waived off completely GSTR-3B was submitted but couldn’t file it due to technical issues.

Period: July 2017 to September 2018 where GSTR-3B filed between 22/12/2018 to 31/03/2019- Waived off completely

Period: July 2017 to September 2018 where GSTR-3B filed beyond 31/3/2019 – Late fee Reduced.

Period: October 2018 onwards – Reduced Late Fee

Period: February 2020 to April 2020 – Waived off completely if filed before specified dates for June-July 2020.

Period: February 2020 to April 2020 (For Turnover more than Rs. 5 Crore), February 2020 to July 2020 (For turnover equal to or up to Rs. 5 Crore – Waived off completely if filed within specified dates.

Period: GSTR-3B pending for Months July 2017 to January 2020, May 2020 to July 2020 (For Turnover more than Rs. 5 Crore), February 2020 to July 2020 (For Turnover equal to or up to Rs. 5 Crore) – Maximum Late Fees capped to Rs. 500/- per return filed between 1/7/2020 and 30/09/2020. No Late Fees or Nil Return.

  • GSTR-4

Period: July 2017 onwards - Reduced Late Fees

Period: July 2017 to September 2017 for GSTR-4 filed between 22/12/2018 to 31/03/2019 – Waived off

Period: October 2017 to December 2017 for GSTR-4 filed within Due date but wrong late fees charged on GST Portal - Waived off 

Period: July 2017 to September 2018 for GSTR-4 if filed beyond 31/03/2019 – Late fee Reduced.

Period: October 2018 onwards – Reduced Late Fees

  • GSTR-5

Period: July 2017 onwards – Reduced Late fees

  • GSTR-5A

Period: July 2017 onwards – Reduced Late Fees

Period: July 2017 onwards filed on or after 7/3/2018 – Full Late Fees applicable

  • GSTR-6

Period: July 2017 onwards – Reduced Late Fees. No Late Fee for the delay in filing Nil Return

Period: Any period before January 2018 where GSTR-6 filed between 1/1/2018 to 23/1/2018 – Completely Waived off

Period: July 2019 – Waived off completely for taxpayers in certain districts of flood-affected states and all districts of J & K.

Period: July 2017 onwards – reduced late fee

Period: July 2017 to September 2018 if filed between 22/12/18 to 31/3/2019 – Waived off completely. 

Period: July 2019 - Waived off completely for taxpayers in flood-affected areas and districts of J&K.

Period: July 2017 to November 2019 for GSTR-1 filed between 19/12/19 to 10/01/2020 – Waived off completely.

Period: March 2020, April 2020 and Quarter ended 31/3/2020 – Waived off completely if filed before specified dates of June-July 2020.

Period: March 2020, June 2020, and Quarter ended 31/03/2020 and 30/06/2020 – Waived off completely if filed before specified dates of July-August 2020.

Also Read: Important GST Dates – GST Calendar 2021

Other Notifications by CBEC

On 1st June 2021, the time limit for completing any GST compliance is between 15th April 2021 and 29th June 2021 has been extended up to 30th June 2021.

On 1st June 2021, The due date to file Annual return by composition taxpayers in GSTR-4 for FY 2020-21 has been extended up to 31st July 2021

On 8th June 2020, it was notified by CBEC that a nil GSTR-3B can be filed via SMS using the registered mobile number and OTP verification.

To Conclude

The government charges interest and late charges to encourage timely payment and filing of taxes. The GST portal accounts for every delay automatically in the GSTR-3B and no return is filed unless payment is made. For any waivers, the amount is refunded back into the Cash ledger and can be utilized later by the taxpayer. 

Late Fees stay auto-calculated and get reflected in the next month’s GSTR-3B. However, interest is to be manually calculated and entered in the GSTR-3B for payment. Late Fee and Interest should be paid in cash separately for CGST, SGST, and IGST. Input Tax Credit cannot be utilized to pay off penal charges in GST. Challan has to be generated for both online and offline GST Payments. Where tax liability is greater than Rs. 10000/-, it is mandatory to make online GST Payments.

 

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