Every registered person is required to furnish prescribed details and returns within the due date, failure to do so may attract a late fee and interest. In this article, we shall discuss such applicable late fees and interest as follows.
Contents of the article
- The interest levied under GST
- When Interest is payable
- Rate of Interest levied
- How Interest shall be computed
- Late fees levied under GST
- For non-filing of returns except Annual return
- For Annual returns
When Interest is payable?
Under the GST regime, the Taxpayer is liable to pay interest under the following Circumstances
- Delay in making payment of GST, in full or in part within the stipulated period
- Inappropriate or Excess claim of Input Tax Credit
- Inappropriate or Excess reduction in output tax liability
Rate of Interest
On the recommendation of the GST Council, the Government shall notify the rate of interest to be levied.
The Rate of Interest as notified by the government shall be as follows
- In the case of belated payment of GST (i.e., late payment of tax)- the government has notified the rate of interest as 18% per annum.
- In the case of Undue or Excess claim of Input Tax Credit– the government has notified the rate of interest as 24% per annum.
- In the case of Undue or Excess reduction in output tax liability- the government has notified the rate of interest as 24% per annum.
| Particulars | Rate of Interest |
| Late payment of GST i.e., GST paid after Due date | 18% per annum |
| The undue or excess claim of ITC | 24% per annum |
| Undue or excess reduction in output tax liability | 24% per annum |
How Interest shall be Computed?
Interest shall be computed from the day following the due date on which the tax has to be paid to the date of the actual payment of tax.
As per the amended section 50 of the GST Act, Interest has to be paid only on the portion amount of the tax which is paid using cash or via electronic cash ledger.
Late fees levied under GST
Every person registered under GST is required to file GST Returns within the due date specified thereon. In case of failure to do so, a late fee shall be charged on such taxpayers (including the taxpayers filing a nil rate of GST) based upon the no of days delayed beyond the due date.
Late fees for non-filing of GST returns except Annual Return
As per the provisions of GST law, in case any registered person had failed to furnish the details of outward or inward supplies as required under Section37 or Section 38 or returns as required under Section 39 or Section 45 by the due date, then such registered person is liable to pay a late fee of Rs.100/-for CGST and Rs.100/- for SGST/UTGST for every day during which such failure continues subject to a maximum amount of Rs.5,000/- under each act.
However, as per the notification, the aforesaid late fee has been reduced to Rs.25/- for CGST and Rs.25/- for SGST. And for the businesses filing returns having nil or zero tax liability, the late fee levied shall be Rs.10/- for CGST and Rs.10/- for SGST.
| Particulars | Revised Late fee for each day of delay |
| Under the CGST act | Rs.100/- |
| Under the SGST act | Rs.100/- |
| Total late fees payable | Rs.200/- |
| The maximum late fee that can be charged by the GST department is Rs.5,000/- under each act. | |
Late fees for non-filing of Annual Return
As per the provisions of GST law, in case any registered person had failed to furnish the annual return by the due date, then such registered person is liable to pay a late fee of Rs.100/- for CGST and Rs.100/- for SGST/UTGST for every day during which such failure continues subject to a maximum of an amount computed at 0.25% of the turnover for the financial year.