Under any law, if any taxable person fails to comply with the provisions of the Act, rules, and regulations made thereunder then he has to face interest and other penalties. So, it is very important for any business to consider all the statutory and other laws applicable to them.
In this article, we shall discuss such late fees which would need to be paid if the taxable persons fail to file the returns within the prescribed time as per the provisions of the GST Act, 2017.
For Example, Mr. A is a taxable person but his turnover in one month is NIL, so he didn’t file the return for that month. But later he comes to know that return is required to be filed even in case of no outward supply so he files the return after its due date. In this case, also, he shall be liable to pay late fees for the period from the due date to the period of actual filing of return.
That means the late fees all depend upon the delay of a number of days in filing of the return, does not matter whether he has no taxable supply or Exempted supply.
Notice to be sent in case of Non-filing of Return
As per section 45 of CGST Act, 2017, A notice shall be sent by the department to the taxable person if he didn’t file
- Normal Return (Section 39)
- Annual Return (Section 44)
- Final Return (Section 45)
- TCS Return (Section 52)
If file the return within 15 days. Although in this case also, late fees shall be charged.
Cases in which late fees shall be levied:
Any Taxable person who fails to file the following returns then he shall be liable to pay late fees
- Statement of Outward Supply-GSTR-1(Section 37)
- Normal Return-GSTR-3B(Section 39)
- Final Return-GSTR-10(Section 45)
- Annual Return-GSTR-9 (Section 44)
How much Late fees will be charged
(Quantum of Late fees to be paid by the taxable person in case of delay in filing of above-specified return)
Where any person has not filed his return as specified under section 37 (Outward Supply-GSTR-1) or Section 39 (Normal Return-GSTR-3B) or Section 45(Final Return-GSTR-10) within due date then the Lower of following quantum of late fees shall be levied on him:
- Rs.100* per day during which such failure continuous
- Rs.5,000 /-
However, as per different notifications, the above-specified limit of Rs.100 per day has been reduced to Rs.10 per day each of CGST and SGST in case of Nil return and Rs.25 per day each of CGST and SGST in otherwise case.
Late fees for (Annual Return-GSTR-9)
Where any person has not filed his return as specified under section 44 (Annual Return-GSTR-9) within due date then the Lower of following quantum of late fees shall be levied on him:
- Rs.100 per day during which such failure continuous
- 0.25% of the turnover of the registered person
Note: At the time of calculating the 0.25% of the turnover of the registered person, we will not take the turnover for the whole year rather the turnover of the state shall be taken in which he has registered and delay in filing of return.
Note: Since the above-specified quantum late fees have been defined under the CGST Act. That means the total late fees to a registered person shall be Rs.100 each CGST and SGST or Rs.200 as IGST.
For Example, Mr. A has filed the GSTR-1 for the month of September 2019 in 15th November 2019. In this case, the late fees shall be calculated in the following manner:
We know that the due date for filing of outward supply return in GSTR-1 is 10th of the next month in which the GST has been collected. In the given example, the due date for filing of GSTR-1 for the month of September 2019 is 10th October 2019. So, the late fees shall be:
Now, the total late fees shall be calculated as lower of the following:
- Rs.2,250 (i.e. 50 each CGST and SGST per day till the failure continuous)
Hence, the total late fees required to be paid by Mr. A is Rs.2,250/-.
In the above example, we have discussed the late fees in case of delay in filing of GSTR-1, the same example may apply if the registered person has not filed GSTR-3b(Normal Return) and GSTR-10 (Final Return).
Now, let’s understand how to calculate the late fees for delay in filing of Annual Return.
For Example, Mr. A is a registered supplier of Delhi and Mumbai. His turnover for the financial year 2018-19 Rs.10,00,000 in Delhi and Rs.20,50,000 in Mumbai. The due date for filing of annual return for Delhi unit is 31st December of the succeeding financial year. In the given case, the due date for FY 18-19 would be 31st December 2019. However, Mr. A misses to file the annual return for the Delhi unit within the due date and file it on 31st January 2020. Hence, the late fees for delay in filing of annual return shall be calculated in the following manner:
Rs.100 per day during which such failure continuous i.e..,
0.25% of the turnover of the registered person
0.25% * Rs.10,00,000 = Rs.2,500/-
The total amount of late fees shall be the lower of the following:
Hence, Mr. A shall be liable to pay late fees of Rs.2,500
Note: In this case, we have taken turnover of Delhi state because for Mr. A has not filed the annual return of Delhi state and not the Mumbai state, hence we have taken only Delhi state turnover.
Waived off the Late Fees:
We have discussed the details of late fees which have been specified in the act. Although the quantum of late fees has been changed as per the situations. For Example, recently, the department has waived off the late fees for the month of July 2019 of GSTR-1 in certain districts of flood-affected states.
Process for the payment of Late Fees at GST Portal
Practically, a taxable person doesn’t need to do anything with regard to the calculation of late fees because it will be automatically pop up at the time of next month’s return. The payment of late fees can be made at GST Portal as follows:
- Go to GST Portal and Login to your Account
- On the Dashboard, click on the service option
- Then go to challans
- At last, Click on the create challan and pay the late fees
Note: The number of late fees shall also be bifurcated into CGST and SGST and do not mention the late fees as a single figure in the challan.