From July 2017, the new tax regime Goods and Services Tax, more widely regarded as GST, has been a tax applied to all businesses active in India. This innovative and specific tax system has been a valuable asset in subsuming a variety of indirect taxes applicable to products and services before its adoption.
The computation of late payment, GST late fees, and the interest rate that applies to them has been challenging to businesses since the introduction of the statement GST.
There are two levels of GST operation: CGST for the Central and SGST for the State level. Under the Goods and Services Tax (GST), the government has established regulations that calculate the late fee and the interest charges that apply to organisations unable to fulfil the payment deadlines. Let’s take a look at the operation of GST to have a better understanding of how the late charge and interest are calculated in GST.
The government sets the deadlines for filing GST returns, and each GST-registered person must adhere to them. Taxpayers must pay GST late fees, interest, and the return filing charge if they don’t file on time. If there is no transaction, taxpayers will be compelled to file tax returns with zero value.
The GST system automatically calculates any penalties for GST late fees. That confuses the laypeople and also professionals.
GST late fees calculator
Late fees are the term used in the GST law when an amount is levied for delaying the filing of GST returns under the law governing GST. Depending on the duration of the delay, you will be charged a fixed amount of late fees every day. This usually happens when a business registered for GST fails to file its GST returns by the due date.
The GST late fees must be paid in cash, and the input tax credit that is now recorded in the computerised ledger cannot be used to pay the late fee. This calculator computes late payments under the due dates considered by the GST Portal. So that you may figure out how much late fees you’ll have to pay when you file GSTR-3B.
A GST late fee is charged even if nil returns aren’t filed on time. For instance, a late fee is still applicable even though there were no sales or purchases and no GST liabilities to record in GSTR-3B.
The value of the GST late fee will be calculated by counting the number of days that have elapsed since the original due date. At the moment, the GST portal can only charge late fees for the following types of returns:
Concepts related to late payment in the GST
There are three different concepts for late payments in the GST.
- GST late fee for failing to file GST returns.
- Charges for the late payment of the GST
- A penalty from the relevant department
1. GST late fees for failing to file GST returns
a) GST Late Fees Payment Procedures
GSTR 3B is where the penalties for filing your GST returns and late fees are determined automatically. This covers the late fees charged for GSTR 1, GSTR 3B, and other returns.
Therefore, if you fail to file a return with its due date, the system automatically assesses late fees for that period. Additionally, you cannot change these late fees. Therefore, you have to pay these fees before filing GSTR 3B.
b) Calculator for GST Late Fee
You can calculate the goods and services tax late fees associated with a nil return or with transactions by using the GST late fee calculator. Section 47 of the CGST requires all registrants who are required to process GST Returns to make payments for late filing fees.
Additionally, different late fees are assessed for different types of returns.
c) Notification Regarding the Waiver of the GST Late Fees
The government’s GST late fees waiver scheme has been used several times.
2. Charges for the late payment of the GST
GST late payment, including interest, refers to an additional sum the taxpayer must pay if he fails to pay the GST on filing GSTR 3B.
You must determine interest on late payments and pay the government for payment delays. To calculate the interest charged for the late amount of GST, you can download the Excel tool.
You must pay interest on any erroneous GST input tax credits if you want to reclaim them. This applies to you even if you have already claimed an excess input tax credit under the Goods and Services Tax.
3. A penalty from the relevant department
In some circumstances, the GST law allows the right to levy a penalty. However, some of these incidents involve the confiscation of items or their conveyance during transit. Also, items confiscation in warehouse go-downs, other locations, and e-way bill issues.
You may receive a notice for not filing GST returns. If you don’t file your return by the deadline, you may be charged a late fee for GST return 3b and some other returns.
How to figure out GST late fee and interest?
There are two ways to calculate the late fee and interest associated with the GST when filing returns. Even if the variations between them are minor, understanding what they mean is critical if you want to use the GST late fees calculator effectively.
1. Specialised calculator for GST late fees
If firms or individuals are late in filing their GST returns, the laws governing GST impose fines in the form of late fees. Currently, the late fees for SGST and CGST are Rs. 25 per day.
2. Calculation of interest specifically for delayed payments for GSTR 3B
According to the GST legislation, an interest rate will be applied to any past-due amounts, regardless of whether the payments were late or the filings were late. These interest rates apply to all taxpayers who have made a late GST payment and 18 per cent each year. In addition, excess input tax credits incur 24 per cent annual interest. Calculate these interest rates using the late fee calculator GST.
The summary of the GST late fees computation as of July 2017 are as follows.
|The GSTR 3B, the GSTR 1, and the GSTR 4 (if sales)||50 rupees GST late fee per day, with a daily limit of 10,000 rupees|
|The GSTR 3B, the GSTR 1, and the GSTR 4 (Nil GSTR 9 and GSTR 9A)||20 rupees GST late fees per day, up to 10,000 rupees total|
|GSTR 9, 9A||200 Rupees every day with a turnover cap of 0.5%|
|GSTR 10 (Final Return)||200 rupees per day|
How Can I Make a Payment to the Government for the Late Fees?
The GST portal automatically calculates late fees for GST returns.
For CGST and SGST, you must pay the late fees individually using electronic cash ledgers. You must also pay the late fee if you want to file your GST return.
If you would like to compute the late monthly fee, you must include the preceding month’s late payment. If GST is not paid or is paid late, interest will also be added.
Calculating GST Interest
After decreasing input tax credit claims, late GST payments would incur interest on net tax liability. The following must be met for a taxpayer to be responsible for paying the interest:
- Makes a delayed payment of GST, i.e., CGST, SGST, or IGST, after the due date has passed.
- Submits a claim for an additional input tax credit
- Reduces the amount of additional output tax liability
If GST isn’t paid by the due date, you must pay the following interest rates:
|Tax paid after due date||18% p.a.|
|Additional ITC Claimed or additional reduction in Output Tax||24% p.a.|
The interest calculation must begin on the next day after the payment’s due date.
For instance, a taxpayer does not complete a tax payment of Rs. 15,000 for the end of Dec 2020, even though the payment was due on 20/1/2021. If the payment was done on 20/3/2021, the following is how the interest will be computed for the delay period of 61 days (21 Jan to 20 March)
Rs.15,000 * 61/365 * 18% = Rs.451.23
Thus, making tax payments and submitting GST returns on time is imperative. If not, you may be subject to late fees and other penalties.
Updates on the Waiver of Late Fees
The reference to Section 38 has been removed, and Section 47 has been revised to provide for the imposition of a late fee for the delayed filing of a return under Section 52.
For taxpayers with a turnover of far more than 5 crore rupees, 9 per cent interest is charged for the first 15 days after the GSTR 3B reporting deadline. This applies to the months of March and April 2021.
Recent petitions for waivers of late fees for August 2017 to January 2020 have been clarified by the Ministry of Finance. This is relevant to submitting the GSTR 3B Return for the specified period.
The GST statutes stipulate that a late fee must be paid if a taxpayer is late submitting their GST returns. It is considered an overdue fine. At the meeting of the GST Council that took place on the 22nd of December, the decision to implement the one-time late fee waiver plan was made. The GST late fee calculator will assist you in calculating your GST late fees.
Late fees are referred to as the amount that is levied for delaying the filing of GST returns under the statute governing GST. A set amount of payments will be assessed for each day of the delay. This typically occurs when a GST-registered company fails the deadline for filing their GST returns well within a specified amount of time. The amount of the late fee that must be paid is determined both by the length of time for which the return was filed late and the form of return that was filed.
Frequently Asked Questions
What are the effects of not filing GST returns?
If you don't pay the GST returns, which are mandated by the law to be filed, you'll be subject to late fees for every day that you default on the filing requirements. In addition, if any tax is owed, a yearly interest rate of 18% will be applied to the tax liability.
Do I have to submit GST returns when I have no GST payable?
If you are a taxpayer registered for the GST, you are required to file the relevant GST returns regardless of whether or not you have a tax due. This is the case even if you do not have a tax liability. Filing a Nil return is an option if you had no transactions during the month in concern. For example, if you only purchase items and don't sell anything, you can fill out GSTR-3B.
How are GST late fee calculations made?
You can either use the GST late fees Calculator or late fee calculations for GSTR-3B and GSTR-1 to compute the late fees applicable in your specific circumstance.
If you don't pay your GST late fees, what will happen to your account?
The GST late fees are automatically filed in the next GST return. There is no other option to avoid paying GST late fees. If you don't pay the GST late fees, the system won't let you file your GST return.
How can I avoid paying late fees for the GST?
If your cancellation date is any other date or the present date, you can contact the office of the assessing officer and request that he cancel the GST registration from the date of registration to avoid late fees.
What happens if GST returns are not submitted for six months?
If it has been more than six months since you submitted your GST returns, you risk having your GST registration revoked. Keep in mind that the government has the authority to reduce the period allowed for default.
Can GST fees for being late be waived?
GST in certain specific circumstances, late fees can sometimes be minimised. Otherwise, payment is due before filing returns.