Understanding GST Return Filing Late Fees
In India, the Goods and Services Tax (GST) is a comprehensive indirect tax levied on the supply of goods and services. Once a taxpayer successfully registers on the GST portal, they are obligated to file periodic GST returns online. These returns detail a company’s business activities, tax liabilities, and other relevant information. Missing the deadline for GST return filing can result in penalties, including late fees.
This blog dives into the key aspects of GST return filing deadlines, late fees, and associated penalties.
What Are GST Return Late Fees?
A late fee is the penalty charged when GST returns are not filed by the prescribed deadline. This fee, mandated by GST regulations, must be paid in cash. Taxpayers cannot use their Input Tax Credit (ITC) balance to pay these fees.
Registered taxpayers who fail to submit their returns on time incur a daily penalty. Additionally, an interest rate of 18% per annum is levied for the delay. Even businesses with no GST liability are required to file “Nil Returns” on time to avoid late fees.
Late fees vary depending on the type of GST return and are categorized into the following groups:
- Non-Annual GST Returns Late Fee
- Annual GST Returns Late Fee
- Late Filing Penalties for Nil Returns
Late fees are applicable to forms such as GSTR-3B, GSTR-4, GSTR-5, GSTR-5A, GSTR-6, GSTR-7, GSTR-8, and GSTR-9.
Key GST Return Filing Deadlines
GST return deadlines differ based on the taxpayer category. Missing these deadlines can result in late fees and other penalties. Businesses must monitor due dates to stay compliant and avoid unnecessary financial burdens.
Calculation of Late Fees for GST Returns
The amount charged as late fees depends on the type of GST return and the duration of the delay. Here’s a detailed breakdown:
GSTR-3B Late Fee
- Nil Returns: Rs 20 per day (Rs 10 for CGST + Rs 10 for SGST).
- Other Cases: Rs 50 per day (Rs 25 for CGST + Rs 25 for SGST).
- Maximum Cap: Rs 10,000.
GSTR-9 and GSTR-9A Late Fee
- Rs 200 per day (Rs 100 for CGST + Rs 100 for SGST).
- Maximum: 0.50% of the taxpayer’s annual turnover.
GSTR-10 Late Fee
- Rs 200 per day (Rs 100 for CGST + Rs 100 for SGST).
- No upper limit applies.
Interest on Late GST Return Filings
In addition to late fees, taxpayers who miss deadlines are subject to an interest rate on unpaid tax liabilities:
- 18% per annum: For delayed GST payments.
- 24% per annum: For undue reduction of tax liability or excess ITC claims.
Interest is calculated from the day after the due date until the payment date. For zero tax liability, the late fee is Rs 20 per day, with a maximum cap of Rs 5,000.
GST Payment Rules
To pay GST dues, a taxpayer must generate a challan valid for 15 days. Payments exceeding Rs 10,000 must be made online via NEFT, RTGS, internet banking, or credit cards. Offline payments are allowed for amounts up to Rs 10,000 using cash, cheques, or demand drafts. Once payment is made, the electronic cash ledger is updated, and the Challan Identification Number (CIN) is issued.
Pending dues are automatically adjusted against future payments. Proper documentation and preparation are essential to avoid errors and ensure compliance.
Avoiding Late Fees
To prevent late fees, taxpayers should:
- Set reminders for GST return filing deadlines.
- Use reliable accounting software for automated filings.
- Engage professional consultants for timely compliance.
Final Thoughts
Timely GST return filing is crucial for businesses to avoid penalties and maintain compliance. Delays can lead to significant financial costs, disrupt business operations, and affect compliance ratings. Staying updated on the latest GST regulations and leveraging professional guidance can help minimize risks.
If you need expert assistance, Shah and Doshi, a trusted business consultancy in Mumbai, offers a range of services, including GST return filing, audit, and tax consultancy. Their team ensures accurate submissions and personalized solutions tailored to your business needs.
Stay compliant and keep your business on track!