Timely filing of GST returns is crucial for businesses to avoid penalties. If GST returns are not filed by the due dates, late fees and interest charges are imposed. This blog explains the different types of GST returns, the applicable late fees and interest charges, and the importance of timely filing.
Types of GST Returns
GST-registered individuals are required to file:
- Monthly Returns: Twice every month.
- Annual Returns: Once every financial year.
Late Fees Under GST
Late fees for Goods and Services Tax (GST) in India vary depending on the type of return filed:
Monthly Nil GST Return
For late filing of a monthly Nil GST Return, a fee of Rs. 20 per day is imposed. This is divided equally between the Central Goods and Services Tax (CGST) Act and the State Goods and Services Tax (SGST) Act, with Rs. 10 each. For interstate supplies, the late fee is Rs. 20 per day under the Integrated Goods and Services Tax (IGST) Act.
Other Than Nil Monthly GST Return
If a monthly GST return other than Nil is filed late, the fee is Rs. 50 per day. This amount is split equally between the CGST and SGST, with Rs. 25 each. For interstate supplies, the late fee under the IGST Act is Rs. 50 per day. The maximum late fee limit set by the government is Rs. 5,000.
Annual GST Return
Filing the annual return after the due date incurs a late fee of Rs. 200 per day, divided equally between CGST and SGST (Rs. 100 each). The maximum limit for the late fee is 0.25% of the total annual turnover.
All late fee charges must be paid in cash, separately for CGST, SGST, and IGST, using separate electronic cash ledgers. The GST portal automatically calculates and displays these amounts during the tax filing process.
Interest on Late Fees Under GST Returns
In addition to late fees, interest charges apply for non-payment or delayed payment of GST. Interest is charged in the following scenarios:
- Payment of GST after the due date
- Claiming excess Input Tax Credit (ITC)
- Reduction of output tax liability
The interest rate for late payment of GST is 18% per annum. For excess ITC claims or reduction in liability, the interest rate is 24% per annum. Interest is calculated from the day after the due date until the tax is paid.
Importance of Timely GST Filing
Timely filing of GST returns is essential to avoid penalties and maintain compliance. The Central Board of Indirect Taxes and Customs (CBIC) has taken a strict stance against non-filers. In recent measures, the CBIC has suggested cancelling the GST registration of individuals who fail to file returns for six or more consecutive periods.
Steps to Avoid Late Fees and Interest
- Mark Due Dates: Keep track of all GST return filing due dates. Set reminders to ensure timely submission.
- Maintain Records: Ensure all transactions are accurately recorded and reconciled regularly.
- Hire Professionals: Consider hiring a tax professional or using reliable GST software to avoid errors and delays.
- Regular Reviews: Periodically review your GST compliance status to ensure there are no pending filings.
Conclusion
Understanding the implications of late fees and interest on GST returns is crucial for every business. By staying informed and proactive, you can avoid unnecessary penalties and ensure smooth operations. Register your GST, file your returns on time, and maintain compliance to focus on your business growth without interruptions.
Additional Resources
- Qualifications for GST Registration
- GST Registration Based on State & Turnover
- GST Registration for Multiple Businesses
File your GST Returns Here! File Now
By adhering to these guidelines, businesses can ensure compliance with GST regulations and avoid the financial burden of late fees and interest charges. Stay vigilant, stay compliant, and keep your business on the right track.
