GST Interest and Late Fee Rules in India
Delayed filing of GST returns not only affects your compliance rating but also adds a significant financial burden in the form of interest and late fees. As per Section 47 of the CGST Act, every registered person who fails to furnish the returns by the due date is liable to pay a late fee.
GST Interest Calculation (Section 50)
If you delay payment of your tax liability, you must pay interest. The current rate is 18% per annum. This interest is calculated on the "Net Tax Liability" (the tax amount paid via electronic cash ledger after adjusting ITC).
Late Fee Structure
- GSTR-3B & GSTR-1: ₹50 per day (₹25 CGST + ₹25 SGST) for taxable returns.
- Nil GSTR-3B & GSTR-1: ₹20 per day (₹10 CGST + ₹10 SGST).
- GSTR-9 (Annual): ₹200 per day (₹100 CGST + ₹100 SGST).
Maximum Late Fee Capping
The government recently introduced a cap on the maximum late fee based on the annual turnover of the taxpayer. For small taxpayers with Nil turnover, the cap is as low as ₹500. For others, it can go up to ₹5000 per return.