GST Taxpayers Smile! Maximum Late Fee Capped at Rs 500

Last Updated at: Feb 02, 2021
GST Taxpayers Smile! Maximum Late Fee Capped at Rs 500
The CBDT recently amended GST rules with a view to curb tax evasion by way of fake invoicing. The CBDT  has made it mandatory for businesses with monthly turnover of over Rs 50 lakh to pay at least 1 per cent of their GST liability in cash. The new rule restricts use of input tax credit (ITC) for discharging GST liability to 99 percent effective January 1, 2021.


Good news! The government has announced a big relief to GST taxpayers. The maximum late fee is capped at Rs 500 per return for the Form GSTR-3B. This rate will be applicable for the delayed filing of every GSTR-3B return during the period from July 2017 to July 2020. However, as stated in this notification no 54/2020, dated 24th June, such GSTR-3B returns will have to be filed by September 30th

The CBIC (Central Board of Indirect Taxes and Customs) has also clarified that no late fee will be imposed for the returns with zero GST liability, provided the return is filed during 1st July and 30th September 2020.  The cap of late fee will only be applicable for returns with tax liability. Of the maximum payable amount of Rs 500, Rs 250 each will go to the SGST and CGST respectively.

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If you remember, the honourable Finance Minister also announced on 12th June that there would be no late fee for returns with zero tax liability for the period from July 2017 to January 2020. After a meeting with the GST Council, she announced this measure to reduce the pendency in GST return filings during this period. The latest CBIC notification has extended this facility for returns pending till July 2017. 

Interest Rate Reduction

The Finance Minister announces a reduction in the interest rate for small taxpayers. According to this, taxpayers with a turnover of less than Rs 5 Crore will need to pay interest @ 9%. Further, instead of 18% as prescribed earlier. This facility has been extended for returns filed till 30th September. If GSTR-3B returns do not file during this period, interest at the normal rate (18%) will be applicable. This is from 1st October 2020 onwards. In this case, the late fee will be applicable from the due date till the date of filing.  

Discover the GST rate, HSN code, or SAC code for all goods and services by using our GST rate finder service. This finder service is also known as the HSN code finder. For products and services, GST is calculated on the basis of an item’s HSN or SAC code.


Earlier Notification dated 31st December 2018.

We need to note that another such waiver of the late fee announces vide an earlier notification. According to this, the late fee was completely waived for not filing GSTR-3B returns during the period from July 2017 to September 2018, provided they were filed by 31st March 2019.  A lot of assesses deposited their returns after 31st March 2019 along with the late fee prescribed. Till now, no revised notification has been issued by the Government for refunding or adjusting the said late fee.