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How to calculate Late Fees and Interest on GST Returns?

It's important to file your GST Returns on-time and requires a discipline to avoid getting into Penalties and late filing interests on GST

Late Fee on GSTR

When a Registered Taxpayer misses the filing of GST Returns within a due date, the late fees is levied by the government of India.


ParticularsLate Fees
Normal Return(GSTR-1, GSTR-3B, GSTR-4)Rs. 50 per day of delay.
Nil Return(GSTR-1, GSTR-3B, GSTR-4)Rs. 50 per day of delay

Note : That the maximum late fees that can be charged cannot exceed Rs 5,000.

 Example

A Taxpayer has filed GSTR-3B for the month of November 2018 (due date 20th Dec 2018) on 23rd January 2019.

Amount of late fees to be paid
  1. If the above return was a return with Invoice tax liability then late fees will be: Rs. 50 per day * 3 days --> Rs. 150 (Rs. 75 CGST + Rs. 75 SGST)
  2. If the above return was a return with Zero tax liability then late fees will be: Rs. 20 per day * 3 days --> Rs. 60 (Rs. 30 CGST + Rs. 30 SGST)

Interest Rate on GSTR

Interest has to be paid by every Taxpayer who:

  1. Makes a delayed GST payment i.e. pays GST after the due date.
  2. Claims excess Input Tax Credit.
  3. Reduces excess Output Tax Liability.

Actually, GST has to be paid at the time of filing GSTR-3B every month and GSTR-4 for Quarterly base.

Interest amount is separately charged, GST is not payable on the interest amount.

If the GST amount should be not paid within the time period of filing GSTR, you must pay the Interest at the following rates:

ScenarioInterest Per Annum
Tax paid after due date18%
Excess ITC Claimed or excess reduction in Output Tax28%

Note: The Interest has to be calculated from the next day on which the tax was due.

 Example

A taxpayer fails to make a tax payment of Rs. 25,000 for the month of November 2018

Where the due date for the November 2018 is 20th Dec 2018 and assumed that the tax payer made the payment on 20th Jan 2019.

The Interest will be calculated as follows: Rs. 25,000 * 31 days/365 * 18% = Rs. 382

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