Late Fees and Interest On GST Returns – Explained

Late Fees and Interest On GST Returns – Explained

The late fee is the money paid by taxpayers for the delay in filing their GST returns, as far as the Goods or Services Tax laws are concerned. But it can also be known as an unpaid penalty, too. Often, note that this late charge would escalate on a per-day basis for the extension of the day after the due date has expired.


Late fees and interest rates are vital components of GST payment and are usually charged by both firms and taxable individuals, whether there is a pause in submitting or filing their GST returns before the due date, deliberately or unintentionally. Delayed submission of Form GSTR-3B and Form GSTR-11 for late payments are only credited to taxpayers who do not have an external supply or are entitled to file a Zero Return and to taxpayers who are liable for paying GSTR-1  In this article, we will learn about Late Fees and Interest On GST(Goods Or Services Tax) Returns.

Late fee for overdue or non-filing returns from GST


The number of late fees depends on the number of days after the delay’s due date. On 23 January 2020, three days after the specified due date, i.e. 20 January 2020, GSTR-3B returns are to be forwarded to GSTR-3B. The late fees will be averaged over a three-day period and will usually be paid in cash only.

If a company approved under GST fails to file its GST returns within the specified due dates, a certain amount is paid in the form of late fees. This late charge also has to do with Zero’s delays in filing returns. For instance, while there are no projections in GSTR-3B to announce sales or acquisitions for the month of December 2019, it is also mandatory for the company to submit this back.


Goods os services rax penalty for late filing:-

A individual fails to provide information on outward or inward material, monthly return or final return by the due date: for every day during which the deficiency continues, the GST penalty for late filing is INR 100, up to a limit of INR 5,000. An individual does not have the annual return by the due date: for any day in which the default continues, the GST late filing penalty is INR 100, subject to a limit of a quarter percent of the turnover of the person in the state where he is registered.


Interest Late Payment Rate Under GST – Goods Or Services Tax


  • Although the liability and/or interest rates for the offences in place have not yet commenced, the penalty for the late payment of GST has been set as follows:


  • The tax shall not be paid by the individual entitled to pay the tax: the interest on the tax owed will be charged at an interest rate of 18% on the first day on which the tax is due.
  • An person makes an undue or excess claim on an input tax credit or an undue or excess reduction on a production tax liability: a 24 percent interest rate on an undue or excess claim or an undue or excess reduction.


  • Within 180 days of the date of issuance of the supplier’s invoice, the purchaser of the service shall not repay the outstanding value of the item to the supplier of the service, along with the tax owing thereon: an interest rate of 18% shall be added to the recipient’s debt on the balance due.


Interest Rates Pursuant to GST


Generally, the interest rate refers to the late-paying of the due GST refund. The interest rate is then expected to be paid by each taxpayer who:-


  • Delays in the payment of GST, i.e. after the due date, the payment of GST
  • Claims from Surplus Input Tax Credit (ITC)
  • Reduces excess responsibility for the tax on output
  • At the time of registration, GSTR-3B and GSTR-4 refunds actually have to be paid.


  • The taxpayer shall pay the following interest rates if the taxable person and/or company fails to file its GST report within the specified date of filing of the return:


  • The interest rate charged will be 18 percent annually if the tax were collected after the due date.
  • The amount of interest charged will be 24 percent per annum if excess ITC is claimed or excess output tax is reduced.


Paying GST Return Late Fees and Interest

As the late fees are paid on the basis of the number of days on which the taxpayer has not submitted a GST record, the value of the late fee due on filing the GST return will be determined automatically by the GST portal.


The late return fee for GST is to be collected individually in cash in separate electronic cash ledgers for CGST, SGST, and IGST. Hence without paying a late charge, the taxpayer would not be allowed to file his or her GST return. The late fee for the present month excludes the late fee paid for the prior month because of the delay in filing the GST return. In addition, late or non-payment of GST returns will also result in interest.


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