Late fines and interest may be assessed to companies that submit or file their GST returns late. This page contains the most recent information on Late Fees and Interest Charges.

The statute governing GST imposes a monetary penalty in the form of a late charge on businesses that submit their GST returns later than required. If a company registered for GST violates the specified deadlines for filing GST returns, the company will be subject to a prescribed late charge for each day the return is late. It is against the law for the taxpayer to pay the late fee using the Input Tax Credit (ITC) included in an electronic credit ledger.

A late filing fee is incurred for those who do not file their nil returns. One is still required to make a late payment even if they have not made any sales or transactions and do not have any GST liability to report in the GSTR-3B. The number of days that have gone since the initial due date is used to calculate the amount of a late fee that will be applied. On the 23rd day after the due date, January 20th, taxpayers are expected to file their GST return using the format GSTR-3B. At the time of submission, cash payments should be made to cover the late fees for three days of overdue payments. Currently, a late fee is only assessed on returns filed using the GSTR-3B, GSTR-4, and GSTR-5A forms on the GST website.

Costs of Potential Fines and Sanctions

The maximum late fees made more sense beginning in June 2021 and for the quarter starting in June 2021.The maximum late charge has been reduced to the following amounts for GSTR-3B, and GSTR-1 returns. These changes were announced after the 43rd GST Council meeting through CGST notifications 19/2021 and 20/2021, dated 1st June 2021, for GSTR-1 and GSTR-3B returns, respectively. The maximum late charge had previously been higher than these amounts.If the GSTR-1 and GSTR-3B returns are not submitted on time, a maximum fine of Rs. 500 per return would be imposed (i.e Rs. 250 each for CGST & SGST).

The maximum late fee in GSTR-1 and GSTR-3B, other than the charge for annual turnover, is established in the following manner:

• The maximum late charge of Rs. 2,000 per return may only be assessed if the annual income for the previous fiscal year was up to Rs. 1.5 crore (i.e Rs.1000 each for CGST and SGST).
• If the annual turnover is between Rs. 1.5 crore and Rs. 5 crores, only then is it permissible to charge the maximum late fee of Rs. 5,000 per return (i.e Rs. 2500 each for CGST and SGST).
• If the total revenue is more than Rs.5 crore, potential penalties for late payment might go up to Rs.10,000 (that is, Rs. 5000 for each component of CGST and SGST).
• In addition, the late fee for the delayed filing of GSTR-4 would be rationalised beginning with the fiscal year 2021-2022, as stated in the CGST notice 21/2021, which was issued on June 1st 2021. The maximum late fee is Rs. 500 if the taxpayer does not submit a return, whereas the total amount is Rs. 2000 if the taxpayer does not file a return.
• TDS filing under the GST has a maximum late fee that can be levied of Rs. 2,000; however, the late cost per day that can be charged has been reduced by CGST regulation 22/2021 dated 1st June 2019 from Rs.200 to Rs.50 for each day of delay, per return. This change was made in response to the maximum late fee levied is Rs. 2,000.

Form for Drafting GST Late Fee Waiver Request 

Please fill out the form to be exempt from late fees for GST statements and returns filed after August 2021. The form is as follows- 

According to the Registration Act, the State Chartered Accountants Organisation is an association of Chartered Accountants. As a representative of chartered accountants and the business community, it acts as an advocate for the interests of its members before different regulatory bodies.

As per Section 47 of the CGST Act, 2017, late fees of Rs. 100/- per day are levied on statements and returns filed under Section 37 or Section 39 of the CGST Act, with a maximum of Rs. 5,00/-. Because this is a flat price that applies to all taxpayers, regardless of revenue, registered individuals who file Nil Returns must also pay late fines of up to Rs.10,000 (CGST + SGST).

After careful study, your kind selves have eased the rule above by Notification No. 1234, which is very commendable in light of the current state of COVID-19 Section 47 of the Act places a ceiling on the late charge for returns due between May 2020 and July 2020. 

NIL is the one exception to this rule. Each CGST and SGST/UTGST return period has a maximum late charge of Rs 250. May-July 2021 tax returns must be submitted no later than 30 September 2021.

Our GST interest calculator online helps you calculate GST interest accurately and quickly.

NIL Return the Late Fee Waiver

This waiver was formerly available for February 2021 through July 2021, but only if the deadlines mentioned in Notification No. 1234 were adhered to throughout that period. However, from August 2021 onwards, a late charge of Rs.10,000 (5,000 each under CGST and SGST/UTGST) would be assessed regardless of the size or volume of the company under Section 47 of the Act. It has been difficult for most taxpayers to fulfil their fixed costs as they have either not begun or are recovering their businesses amid an unpredictable economy, workforce, and crumbling business possibilities.

For the sake of the small and legitimate taxpayers, we ask that similar relaxations be implemented for the return periods from August 2020 to March 2021 by waiving late costs for delayed GST return filing. Taxpayers doing their best to help the Indian economy would be encouraged by this.  On behalf of the  Chartered Accountants Association and the business community at large, we, the undersigned, respectfully request that you consider our plea and reduce the late charge for delayed filing of Statements/Returns as required under the CGST Act, 2017. We also ask for corresponding leniencies under state legislation.

Incentives That Are Subject to GST and the Computations That Go Along With Them

When the net tax requirement left after the GST debt has been paid late is considered, claims for input tax credits are subtracted, and interest is applied to the remaining tax obligation. The appeal has to be paid by a taxpayer who

• Remits a GST payment beyond the deadline, whether it be CGST, SGST, or IGST.
• The claim is made for the excess input tax credit.
• Brings down the total amount of extra production tax that must be paid.

The calculation of interest must begin as of the day when the tax is payable. Take the following scenario as an illustration: a taxpayer missed the deadline to pay taxes totalling Rs 10,000 for December 2020. The following formula will be used to determine it: If he made a payment on the 20th of February in 2021, the following procedure would be used to compute the interest for the 31-day delay period:

Rs.10,000 * 31/365 * 18% = Rs.153

As a consequence of this, it is essential to make timely payments of taxes and file GST returns.

Conclusion

Drafting a GST late fee waiver request involves a clear understanding of the applicable regulations and a well-structured approach to presenting your case. By meticulously outlining the reasons for the delay, providing supporting evidence, and adhering to the prescribed format, you increase the likelihood of a favourable outcome. Ensure that your request highlights any genuine hardships or unavoidable circumstances that led to the delay, and demonstrate your commitment to compliance moving forward. For more GST related queries get in touch with our experts. If you file your GST returns using GSTN, you may do it in a way that is both speedy and comfortable by consulting Vakilsearch.  

Frequently Asked Questions

How to get a waiver on the GST late fee?

The GST Amnesty Scheme for 2022 authorises the forgiveness of all arrears if the arrears total ₹10,000 or less. Dealers who have arrears of ₹10 lakh or less as of 1 April 2022 are allowed to pay 20% of their total arrears in one lump sum instead of having to calculate the amount plus interest and penalties.

How to waive penalty under GST?

Addition of Section 128A to the CGST Act to conditionally waive interest, penalties, or both in relation to claims made under Section 73 for the fiscal years 2017–18 through 2019–20

How to avoid GST late fees?

It is not possible to avoid paying late fees. Until you pay the late fees, the system will not let you file your GST returns.