Late Fees and Interest on GST Return

As per GST penalty regulations, interest of 18% per annum will be levied on the applicable GST penalties that have been levied for the days post the due date.

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:

1. 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.

2. 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.

3. 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:

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:

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 Bajaj Markets. 

 

In addition, to being a valuable source of GST information, Bajaj 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.

When it comes to the GST laws, several amendments have been done and reduction in the fees for late payment is one of them. 

 

Due to insufficient understanding of the new GST portal system, several businesses were unable to pay GST on time and had to pay high late fees as a consequence. To tackle this issue and provide relief to these businesses, CBIC has temporarily lessened the late fees for a limited period. 

 

The reductions mae in late fees are as follows:

• Inter-state: Similarly, the late payment fees for inter-state supplies have been lessened to Rs. 25 a day both under SGST and CGST. Hence, a late charge of Rs. 50 is being charged per day. 

• Intra-state: The late payment fees for intra-state supplies have been lessened to Rs. 25 a day under both CGST and SGST. Thus, instead of the earlier Rs. 200, a late penalty of Rs. 50 per day will be charged. 

• NIL return: For late filing of NIL return, CGST and SGST have lessened the amount to Rs. 10 per day. Therefore, a total amount of Rs. 20 per day is being charged as a penalty for filing NIL late filing. 

Payments related to GST PMT-06 form need to be made via a challan valid for 15 days only. The taxpayer recieves a Challan Identification Number (CIN) once a payment is successfully made. 

 

Payment of challans below Rs. 10000 can be made physically through cheques, demand drafts, or currency, via approved banks only. Payments over Rs. 10000 have to be made strictly online. 

 

The taxpayer’s electronic cash ledger is credited when online payments are made (internet banking, NEFT, credit card or RTGS) for tax, penalty, interest or fees. The balance will be used for paying unpaid interests, liabilities or fees.

 

Online fees will get transferred on the next day to the account of the taxpayer after 8 PM. No physical challans are approved for making GST payments. All challans have to be generated only through the official GST portal.