How to compute late fee and interest on delayed filing of GST returns

For ready reference of our readers we have prepared a illustrative article on late fee and interest on delayed filing of GST return.

1. Late fee on delayed filing of GST Return for Outward Supplies (GSTR-1)

Due to COVID-19 pandemic the Government has prescribed waiver due dates (not extended the due dates) in regard to filing of GSTR-1 returns vide Notification No. 4/2018-Central Tax dated 23.01.2018 as amended vide Notification No 53/2020- Central Tax dated 24.06.2020 (relief notification).

The due dates along with waiver due dates of GSTR-1 for the months March,2020 to June,2020 as prescribed by above Notifications, is tabulated below.

No late fee payable if GSTR-1 filed by waiver due dates

As per the relief notifications even in case GSTR-1 of aforesaid tax periods is filed after prescribed due date but is filed by waiver due dates as prescribed therein which are tabulated above, no late fee shall be attracted / payable.

Full late fee if waiver due dates are breached

It is important to note here that the due dates of filing GSTR-1 have not been extended and therefore in case GSTR-1 is not filed by above waiver due dates, full late fee (Rs 10/- per day (CGST + SGST) for Nil return and otherwise Rs 50 per day subject to maximum of Rs 10,000/-) for the delayed period from the due date shall be payable.

This view is corroborated by para 5.3 of Circular No.141/11/2020-GST dated 24.06.2020 which states as under:

It is clarified that the waiver of late fee is conditional to filing the return of the said tax period by the dates specified in the said notification. In case the returns in FORM GSTR-3B for the said months are not furnished on or before the dates specified in the said notification, then late fee shall be payable from the due date of return, till the date on which the return is filed.

No interest on delayed filing of GSTR-1

As no tax is required to be paid while filing GSTR-1 which is the statement of outward supplies no intt. is payable on delayed filing of GSTR-1. However same is payable on delayed filing of GTSTR-3B.

No late fee waiver for GSTR-1 for months prior to March,2020

In may be noted that as per the above relief notifications waiver due dates has only been prescribed for GSTR-1 for tax periods March,2020 to June,2020. Accordingly any GSTR-1 which is pending to be filed pertaining to period prior to March,2020 will attract late fee (Rs 10/- per day (CGST + SGST) for Nil return and otherwise Rs 50 per day subject to maximum of Rs 10,000/-) for the delayed period from the due date shall be payable.

Let us reinforce our understanding with help of following Illustration:

Illustration 1:

X Ltd has pending monthly GSTR-1 returns to be filed for the tax periods Jan to June,2020. He intends to file the pending GSTR-1 by 10th July,2020. What is the quantum of late fee that it will be required to pay on delayed filing of GST Return viz GSTR-1.:

2. Late fee and interest on delayed filing of GST Return (GSTR 3B)

Due to COVID-19 pandemic the Government has prescribed waiver due dates (not extended the due dates) in regard to waiver of late fee in delayed filing of GSTR-3B returns vide  Notification No. 52/2020- Central Tax dated 24.06.2020 as amended vide Notification No. 57/2020-Central tax dated 30.06.2020.

Further as per Notification No. 51/2020-Central Tax dated 24.06.2020 intt. on delayed filing of GSTR-3B (deposition of GST) will be completely waived if GSTR-3B is filed by the waiver due dates (for tax payers having aggregate turnover of upto Rs 5 Crores in the preceding financial year) and reduced intt. will be applicable for other tax payers.

The due dates along with waiver due dates of GSTR-3B for the months February,2020 to June,2020 as prescribed by above Notifications, is tabulated below.

a) For tax payers having aggregate turnover more than Rs 5 Crore

b) For tax payers having aggregate turnover upto Rs 5 Crore

i) For Taxpayers having principal place of business in Chhattisgarh, MP, Gujarat, , Maharashtra, Karnataka, Goa, Kerala, TN, Telangana , Andhra Pradesh, Daman and Diu and Dadra and Nagar Haveli, Puducherry, Andaman and Nicobar Islands and Lakshadweep.

ii) For Tax payers having principal place of business in H.P, Punjab, Uttarakhand, Haryana, Rajasthan, U.P, Bihar, Sikkim, Arunachal Pradesh, Nagaland, Manipur, Mizoram, Tripura, Meghalaya, Assam, West Bengal, Jharkhand ,Odisha, Jammu and Kashmir, Ladakh, Chandigarh ,Delhi.

Late fee on delayed filing of GSTR-3B

No late fee payable if GSTR-3B filed by waiver due dates

As per the relief notifications even in case GSTR-3B of aforesaid tax periods is filed after prescribed due date but is filed by waiver due dates as prescribed therein which are tabulated above, no late fee shall be attracted / payable.

Late fee capped at Rs 500/- if GSTR-3B filed after waiver due date but upto 30.09.2020

If GSTR-3B for tax periods as tabulated above are not filed by above waiver due dates but is filed by 30.09.2020, late fee is capped at Rs 500/- (Rs 250 each for CGST and SGST) per return shall be payable. However, zero late fee will be charged in case of NIL GSTR 3B provided same is filed by 30.09.2020. (Notification No. 57/2020- Central Tax dated 30.06.2020).

Benefit of late fee capping extended to GSTR-3B for periods July,2017 to January,2020

 As per Notification No. 52/2020- Central Tax dated 24.06.2020 as amended vide Notification No. 57/2020-Central tax dated 30.06.2020, the benefit of capping of late fee per GSTR-3B return to Rs 500/- (Zero in case of Nil return) will also be available for tax periods July,2017 to January,2020 to all tax payers across the board, provided GSTR-3B is furnished between 01.07.2020 to 30.09.2020.

Thus we can say that benefit of late fee capping has been allowed since inception of GST viz July,2017 till July, 2020. However for tax periods February to July, 2020 entire late fee will be waived if GSTR-3B is filed by waiver due dates as tabulated supra.

Normal late fee shall apply if GSTR-3B filed after 30.09.2020

In case GSTR-3B for tax periods July, 2017 to July, 2020 is not filed by 30.09.2020, normal late fee i.e. (Rs 10/- per day (CGST + SGST) for Nil return and otherwise Rs 50 per day subject to maximum of Rs 10,000/- ) will have to be paid from the due date.

Intt. on delayed filing of GSTR-3B

For tax payers having aggregate turnover more than Rs 5 Crore for GSTR-3B of Feb, March and April, 2020

As per Notification No.31/2020- Central Tax, dated 03.04.2020 as amended vide Notification no 51/2020- Central Tax, dated 24.06.2020 , a lower rate of intt. of NIL for first 15 days after the due date of filing return in GSTR-3B and @ 9% p.a thereafter till 24.06.2020 is notified. After the specified date viz 24.06.2020, normal rate of intt. i.e. 18% pa. shall be charged for any further period of delay in furnishing of the returns.

The above is as per para 3.2 of Circular No.141/11/2020-GST dated 24.06.2020.

It may be noted that benefit of interest as above is available only for GSTR-3B for February, March and April, 2020. For GSTR-3B of rest months, intt. @ 18% p.a shall be applicable for entire period of delay from the due date.

Illustration 2:

Y Ltd having aggregate turnover of more than Rs 5 Crore was not able to file its GSTR-3B for the month of March, 2020 by the due date of filing viz 20.04.2020. How the amount of intt. he will be required to pay calculated if he files such return on i) 03.05.2020 ii) 20.05.2020 iii) 20.06.2020 iv) 24.06.2020 and v) 05.07.2020.

The calculation of interest on delayed filing of GST return viz GSTR-3B, Y Ltd will be required to pay in each of the above situation is tabulated below:

For tax payers having aggregate turnover upto Rs 5 Crore for GSTR-3B of Feb to July,2020

As per Notification No.31/2020- Central Tax, dated 03.04.2020 as amended vide Notification no 51/2020- Central Tax, dated 24.06.2020 , provides NIL rate of intt. till specified dates (waiver due dates as per Table C and D above) and after the waiver due dates lower rate of 9% would apply till 30.09.2020.

After 30.09.2020, normal rate of intt. i.e. 18% p.a shall be charged for any further period of delay in furnishing of the returns.This is as per para 4.1 of Circular No.141/11/2020-GST dated 24.06.2020.

It may be noted that benefit of intt. as above is available only for GSTR-3B for February to July,2020. For GSTR-3B of rest months, normal intt. @ 18% shall be applicable for entire period of delay from due date.

Illustration 3:

A Ltd having aggregate turnover upto Rs 5 crore and registered in Maharashtra has not filed its GSTR-3B for the month of March, 2020 (due date 22.04.2020) . The intt. will be computed in case its GSTR-3B is filed on i) 02.07.2020 ii) 29.09.2020 iii) 30.10.2020, as under:

Situation 1: GSTR-3B is filed on 02.07.2020

Zero intt. will be applicable as GSTR-3B is filed by the waiver due date viz 03.07.2020.

Situation 2: GSTR-3B is filed on 29.09.2020

Zero intt will be applicable from due date i.e. 22.04.2020 till the waiver due date viz 03.07.2020 i.e. 72 days. Thereafter for balance 81 days delay, intt. shall be applicable @ 9% p.a.

Situation 3: GSTR-3B is filed on 30.10.2020

Zero intt. from due date i.e. 22.04.2020 till the waiver due date viz 03.07.2020 i.e. 72 days. Thereafter for 89 days delay (waiver due date to 30.09.2020) intt. @ 9% p.a. For balance delay of 30 days (beyond 30.09.2020) intt. @ 18% will be levied.

After understanding the application of late fee and intt. on delayed filing of GSTR-3B let us reinforce our learning further through an integrated illustration.

Illustration 4:

B Ltd having aggregate turnover upto Rs 5 crore and registered in Delhi has not filed its GSTR-3B for the month of April, 2020 (due date 24.05.2020) . The intt. and late fee will be computed in case its GSTR-3B is filed on i) 08.07.2020 ii) 29.09.2020 iii) 30.11.2020, as under:

Situation 1: GSTR-3B is filed on 08.07.2020

Zero intt. as well as no late fee will be applicable, as GSTR-3B is filed by the waiver due date viz 09.07.2020.

Situation 2: GSTR-3B is filed on 29.09.2020

Zero intt. will be applicable from due date i.e. 24.05.2020 till the waiver due date viz 09.07.2020 i.e. 46 days. Thereafter for balance 82 days delay, intt. shall be applicable @ 9% p.a.

As regards late fee, benefit of zero late fee will not be available as GSTR-3B is filed after waiver due date. However benefit of late fee capping would be available and late fee of only Rs 500/- will be payable.

Situation 3: GSTR-3B is filed on 30.11.2020

Zero intt. from due date i.e. 24.05.2020 till the waiver due date viz 09.07.2020 i.e. 46 days.Thereafter for 83 days delay (waiver due date to 30.09.2020) intt. @ 9% p.a. For balance delay of 61 days (beyond 30.09.2020) intt. @ 18% will be levied.

As regards late fee, benefit of zero late fee as well as late fee capping will not be available as GSTR-3B is filed after waiver due date and also after 30.09.2020. Accordingly normal late fee i.e. (Rs 10/- per day (CGST + SGST) for Nil return and otherwise Rs 50 per day subject to maximum of Rs 10,000/- ) shall be payable for 190 days i.e. from the due date of return (24.05.2020), till the date on which the return is filed (30.11.2020).

Considering GSTR-3B was not a Nil one,the late fee applicable would be Rs 9,500/- (190 days X Rs 50 per day).

We hope with above discussion and illustrations your doubts regarding applicability of late fee and interest on delayed filing of GST return viz GSTR-1 and GSTR-3B would have evaporated. However if any doubts still remain they may be lodged on ‘Ask GST query tab‘ under ‘Your GST queries’ tab on home page.

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Frah Saeed

Frah Saeed is a law graduate specializing in the core field of indirect taxes and is the Co-founder of taxwallah.com. She has authored many publications on GST and is into full-time consultancy on GST to big corporates. She as a part of taxwallah.com heads a team comprising of Chartered Accountants and Advocates and plays a key role in our mission to disseminate GST knowledge to all.