Understanding Penalties and Interest for Delayed GST Filings
This article explains the interest and late fees applicable under India's Goods and Services Tax (GST) for delayed return filings and tax payments. It details due dates for various GST returns, how interest is calculated on late tax payments and excess ITC claims, and the structure of late fees for different return forms. The article also covers maximum late fee limits and provides a historical overview of notification changes, ensuring taxpayers understand their compliance obligations and consequences of non-adherence.
When businesses in India fail to submit their Goods and Services Tax (GST) returns or remit tax liabilities by the stipulated deadlines, the tax authorities impose both late fees and interest charges. Therefore, it is crucial for businesses to have a clear understanding of these financial implications. This article delves into the specifics of interest and late fees under the GST regime.
GST Due Dates for Taxpayers
The deadlines for GST return submissions vary depending on the taxpayer's category and the specific return form.
| Return Form under GST | Due Date |
|---|---|
| GSTR-1 (Monthly) | 11th of the next month |
| GSTR-1 (Quarterly) | 13th of the month succeeding the quarter |
| GSTR-3B (Monthly) | 20th of the next month |
| GSTR-3B (Quarterly) | 22nd or 24th of the month succeeding the quarter |
| CMP-08 (Quarterly) | 18th of the month succeeding the quarter |
| GSTR-4 (Annual) | 30th of June succeeding the financial year for FY 2024-25 (Previously 30th of April succeeding the financial year) |
| GSTR-5 (Monthly) | 13th of the next month |
| GSTR-5A (Monthly) | 20th of the next month |
| GSTR-6 (Monthly) | 13th of the next month |
| GSTR-7 (Monthly) | 10th of the next month |
| GSTR-8 (Monthly) | 10th of the next month |
| GSTR-9 (Annual) | 31st December of the next financial year |
| GSTR-9B (Annual) | 31st December of the next financial year |
| GSTR-9C (Annual) | 31st December of the next financial year |
| GSTR-10 (One time) | Within three months of the date of cancellation of the GST registration / date of cancellation order, whichever is later. |
| ITC-04 (Annual/Half-yearly) | 25th April of the next FY, where AATO is up to Rs.5 crore, and 25th October of the same FY for Apr-Sep and 25th April of the next FY for Oct-Mar, where AATO exceeds Rs.5 crore |
*For taxpayers with an aggregate turnover of Rs 5 crore or less, who are eligible for and have opted into the QRMP scheme, the due date is the 22nd of the month following the quarter for taxpayers in Category X states/UTs and the 24th of the month following the quarter for taxpayers in Category Y states/UTs.
Category X includes: Chhattisgarh, Madhya Pradesh, Gujarat, Maharashtra, Karnataka, Goa, Kerala, Tamil Nadu, Telangana or Andhra Pradesh or the Union territories of Daman and Diu and Dadra and Nagar Haveli, Puducherry, Andaman and Nicobar Islands and Lakshadweep.
Category Y includes: Himachal Pradesh, Punjab, Uttarakhand, Haryana, Rajasthan, Uttar Pradesh, Bihar, Sikkim, Arunachal Pradesh, Nagaland, Manipur, Mizoram, Tripura, Meghalaya, Assam, West Bengal, Jharkhand or Odisha or the Union Territories of Jammu and Kashmir, Ladakh, Chandigarh and New Delhi.
Note: GST filing requirements under the CGST Act are subject to modifications by CBIC notifications and orders.
Interest on Delayed GST Payments
Interest is levied on delayed GST payments, specifically on the net tax liability remaining after subtracting valid input tax credit claims. These interest charges become applicable when a taxpayer fails to remit the GST amount by the designated due date. The obligation to pay interest applies to any taxpayer who:
- Submits a delayed GST payment, meaning CGST, SGST, or IGST is paid after the due date.
- Claims an excessive input tax credit.
- Undergoes an excessive reduction in output tax liability.
If GST is not paid within the return filing due dates, interest must be paid at the following rates:
| Particulars | Interest |
|---|---|
| Tax paid after due date* | 18% per annum |
| Excess ITC Claimed or excess reduction in Output Tax | 24% per annum |
For instance, if a taxpayer owes Rs.10,000 for January 2025, with a due date of February 20th, 2025, and settles the payment on March 22nd, 2025, the interest for the 30-day delay (from February 21st to March 22nd) is calculated as: Interest = (Outstanding Tax x Interest Rate x Number of Days) / 365 Interest = (10,000 x 18% x 30) / 365 = ₹147.95
What Are Late Fees Under GST?
Under GST regulations, a late fee is imposed for any delay in submitting GST returns. This fee acts as a penalty for missing the specified GST return filing deadline. The tax authorities have set daily late fees that are applied from the due dates listed in the preceding section.
Even if a taxpayer has no sales or purchases and no GST liability to declare, they are still required to pay a late fee for delayed nil returns. The late fee amount depends directly on the number of days the filing is delayed beyond the due date.
For example, if GSTR-3B for January 2025 is filed on January 23rd, 2025, which is three days past the January 20th, 2025 due date, the late fees will be calculated for these three days and must be paid in cash.
The GST portal levies late fees on various GST returns, including:
- GSTR-1
- GSTR-3B
- GSTR-4
- GSTR-5
- GSTR-5A
- GSTR-6
- GSTR-8
- GSTR-7
- GSTR-9
Note: Late fees must be paid in cash; taxpayers cannot use the Input Tax Credit (ITC) available in their electronic credit ledger to settle late fee payments.
Late Fees and Penalties Under GST
The GST law prescribes the following late fees and penalties for delayed submission of GST returns beyond their respective due dates.
Late Fee Calculation for GSTR-3B and GSTR-1
- For intrastate supplies, late fees are applied under both the CGST and SGST Acts 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 per day | Rs 50* |
Previously, the law capped the maximum late fee at Rs 10,000 until May 2021, meaning a maximum of Rs 5,000 could be charged under each Act for any return. However, from the June 2021 return period onwards, the maximum late fee has been revised, as detailed in a later section.
- For nil return filers, the following late fees apply:
| Name of the Act | Late fees for every day of delay |
|---|---|
| CGST Act | Rs 10* |
| SGST Act | Rs 10* |
| Total late fees to be paid per day | Rs 20* |
The maximum late fee for GSTR-1 and GSTR-3B for nil filers has also been revised from the June 2021 return period, as explained later.
For example, if a taxpayer filed GSTR-3B for February 2025 on March 23rd, 2025, three days after the March 20th, 2025 due date, the total late fees would be Rs.150 (Rs. 50 per day for 3 days). This would comprise Rs.75 under CGST and Rs.75 under SGST.
If the same return was a ‘Nil’ tax liability return, the late fees would be Rs. 60 (Rs. 20 per day for 3 days), with Rs.30 under CGST and Rs.30 under SGST.
Late Fees for GST Annual Return (GSTR-9)
| Name of the Act | For taxpayers whose turnover is up to Rs 5 crore (Late fees for every day of delay) | For taxpayers whose turnover is more than Rs 5 crores & up to Rs 20 crore (Late fees for every day of delay) | For taxpayers whose turnover is more than Rs 20 crore (Late fees for every day of delay) |
|---|---|---|---|
| Central Goods and Services Act, 2017 | Rs 25* | Rs 50* | Rs 100 |
| Respective State Goods and Services Act, 2017 (or) Union territory Goods and Services Act, 2017 | Rs 25* | Rs 50* | Rs 100 |
| Total Late fees to be paid | Rs 50* | Rs 100* | Rs 200 |
| Maximum late fees that can be charged | 0.04% of turnover in state or union territory | 0.04% of turnover in state or union territory | 0.25% of the turnover for the financial year |
*CBIC notification no: 07/2023–Central Tax introduced reductions in the late fee for delayed GSTR-9 filing from FY 2022-23 onwards:
- For GSTR-9 from FY 2022-23:
- Taxpayers with an Annual Aggregate Turnover (AATO) up to Rs.5 crore will pay Rs. 50 per day, subject to a maximum of 0.04% of turnover in the state or union territory.
- Taxpayers with an AATO between Rs.5 crore and Rs.20 crore will pay Rs 100 per day, subject to a maximum of 0.04% of turnover in the state or union territory.
- Additionally, taxpayers filing pending GSTR-9 for FYs 2017-18, 2018-19, 2019-20, 2020-21, and 2021-22 will incur a maximum late fee of Rs 20,000. This reduced late fee applied only if filed between April 1st, 2023, and June 30th, 2023.
Maximum Late Fee Under GST
The maximum late fees have been updated for returns from June 2021 (for monthly filers) and the quarter ending June 2021 (for quarterly filers).
Following the outcomes of the 43rd GST Council meeting, the maximum late fee has been reduced based on the return type and turnover slab. These changes were notified via CGST notifications 19/2021, 20/2021, and 21/2021, all dated June 1st, 2021, for GSTR-3B and GSTR-1.
| Name of the return | Type of return | Annual turnover in previous year | Maximum late fee under CGST | Maximum late fee under SGST | Maximum late fee |
|---|---|---|---|---|---|
| GSTR-1 and GSTR-3B | Nil return | NA | Rs 250 | Rs 250 | Rs 500 |
| Other than Nil return | Up to Rs.1.5 crore | Rs.1,000 | Rs.1,000 | Rs.2,000 | |
| Between Rs.1.5 crore and Rs.5 crore | Rs. 2,500 | Rs. 2,500 | Rs. 5,000 | ||
| More than Rs.5 crore | Rs. 5,000 | Rs. 5,000 | Rs. 10,000 | ||
| GSTR-4(FY 21-22 onwards) | Nil return | NA | Rs 250 | Rs 250 | Rs 500 |
| Other than Nil return | NA | Rs.1,000 | Rs.1,000 | Rs.2,000 | |
| GSTR-7(TDS filing under GST) | NA | NA | Rs.1,000 | Rs.1,000 | Rs.2,000 |
Additionally, CGST notification 22/2021, dated June 1st, 2021, reduced the late fee for GSTR-7 from Rs.200 to Rs.50 per day of delay, per act, per return.
Overview of Late Fee Notifications up to 2021
Changes regarding the applicability of late fees are summarized below:
GSTR-1
| Applicable return period/s | Applicability of late fee | Link to notification |
|---|---|---|
| June 2021 onwards for monthly filers and quarter-ended June 2021 onwards for QRMP taxpayers | Maximum late fee is reduced. For nil filers, it is fixed at Rs.500 per return. For the rest, it is fixed as per turnover slabs, explained in the above section. | 20/2021 |
| 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 |
| 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 |
| July 2017 – November 2019 | Waived off completely if filed between the period from 19th December 2019 to 10th January 2020 | 74/2019 |
| July 2019 | Waived off completely for taxpayers in certain districts of the flood-affected States and all districts of J&K | 41/2019 |
| July 2017 – September 2018 | Waived off completely** | 75/2018 |
| July 2017 onwards | Reduced Late fee** | 4/2018 |
GSTR-3B
| Applicable return period/s | Applicability of late fee | Link to notification |
|---|---|---|
| For June 2021 onwards in case of monthly filers and quarter-ended June 2021 onwards for QRMP taxpayers | Maximum late fee is reduced. For nil filers, it is fixed at Rs.500 per return. For the rest, it is fixed as per turnover slabs, explained in the above section. | 19/2021 |
| From July 2017 to April 2021 | Conditional waiver of late fee for delay in filing GSTR-3B, If now filed between 1st June to 31st August 2021 with maximum late fee charged at Rs.500 per act per return. | 19/2021 |
| For monthly filers: March and April 2021For quarterly filers: Jan-Mar 2021 | Conditional waiver of late fee for delay in filing GSTR-3BFor turnover more than Rs.5 crore- No late fee for 15 days of delayFor turnover up to Rs.5 crore- No late fee for 30 days of delay | 09/2021 |
| For turnover more than Rs 5 croreMay 2020 – July 2020For turnover equal to or less than Rs 5 croreFebruary 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 |
- 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 February 2020 – April 2020|Waived off completely if the filed before the staggered specified dates of June-July 2020.|32/2020 October 2018 onwards|Reduced Late fee**|76/2018 July 2017 -September 2018|Reduced Late feeIf filed beyond 31st Mar 2019|76/2018 July 2017 -September 2018|Waived off completelyIf filed between 22nd Dec 2018 to 31st Mar 2019|76/2018 October 2017 only|Waived off completelyFor GSTR-3B submission made but not filed due to a technical glitch|41/2018 October 2017-April 2018GSTR-3B was yet to be filed by those who submitted TRAN-1 on the GST portal, but could not file it by 27th Dec 2017.|Waived off completelyCondition to be satisfied: Such registered persons have filed the declaration in TRAN-1 on or before the 10th May 2018 and the return in GSTR-3B for each of such months, on or before the 31st May 2018|22/2018 October 2017 onwards|Reduced Late feeCondition to be satisfied: If the date of filing was before 22nd December 2018|64/2017 July 2017 -September 2017|Waived off completelyCondition to be satisfied: If the date of filing was before 22nd December 2018|28/2017 and 50/2017
GSTR-4 (Annual)
| Applicable return period/s | Applicability of late fee | Link to notification |
|---|---|---|
| FY 2021-22 onwards | Maximum late fee that can be charged will be restricted to Rs.500 per return for nil filing and Rs. 2,000 for other than nil filing. | 21/2021 |
GSTR-5
| Applicable return period/s | Applicability of late fee | Link to notification |
|---|---|---|
| July 2017 onwards | Reduced Late fee** | 5/2018 |
GSTR-5A
| Applicable return period/s | Applicability of late fee | Link to notification |
|---|---|---|
| Returns for July 2017 onwards filed on or after 7th Mar 2018 | Full Late fee applicable^ | 13/2018 |
| July 2017 onwards | Reduced Late fee** | 5/2018 |
GSTR-6
| Applicable return period/s | Applicability of late fee | Link to notification |
|---|---|---|
| July 2019 | Waived off completely for taxpayers in certain districts of the flood-affected States and all districts of J&K | 41/2019 |
| For any tax period prior to January 2018 | Completely waived off** | 41/2018 |
| July 2017 onwards | Reduced Late fee**No late fees for the delay in filing a Nil return | 7/2018 |
Note: Other returns like GSTR-7, GSTR-8, or GSTR-9 incur late fees as per the Act at their normal rate.
*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 Pay Late Fees on the GST Portal?
The GST portal automatically calculates the applicable late fee when you submit your GST returns. The late fee for the current month or quarter should be paid when filing the returns for the subsequent month or quarter.
Late fees must be paid in cash, with separate payments for CGST and SGST into their respective electronic cash ledgers. It is not possible to file a GST return without first settling the outstanding late fees.
The late fee for a given month includes any late fees from previous months due to delayed filings. Additionally, non-payment or late payment of GST also incurs interest charges.
Rules for GST Payment Applicable to Taxpayers
GST payment regulations differ based on several factors. Here are the primary rules for regular taxpayers, those under the composition scheme, and casual taxable persons:
- Regular Taxpayers: These individuals or entities must file GSTR-1 and GSTR-3B. Timely filing requires payment of the due tax to avoid incurring interest and late fees.
- Composition Scheme Taxpayers: Taxpayers opting for the composition scheme file annual returns (GSTR-4) but are mandated to make quarterly tax payments via CMP-08. Any delayed payments will attract both interest and penalties.
- Casual Taxable Persons: Casual taxpayers, defined as those temporarily engaged in business activities, must register for GST and pay taxes in advance, based on their estimated liability. Failure to pay on time results in penalties similar to those imposed on regular taxpayers.
While each taxpayer category has distinct rules regarding return forms and deadlines, the general recommendation remains consistent: adhere to all due dates to prevent additional charges. Furthermore, taxpayers are required to maintain accurate documentation to support their GST payments and any claimed input tax credits.