The Goods and Services Tax (GST) late fee is calculated on a per-day basis for each day of delay in filing the GST return. The specific daily fee depends on whether the return involves any tax liability or is a Nil return.
Understanding GST Late Fee Calculation
GST late fees are imposed to encourage timely compliance with filing obligations. The fee begins to accrue from the day immediately following the prescribed due date for filing the return and continues until the actual date the return is successfully filed.
Daily Late Fee Structure
The late fee structure varies based on the nature of the GST return being filed:
- For Returns with Tax Liability:
- When taxpayers fail to file returns within the prescribed due dates and there is a tax liability, a late fee of Rs. 50 per day is applicable.
- This amount is bifurcated equally between the Central Goods and Services Tax (CGST) and State Goods and Services Tax (SGST), resulting in Rs. 25 per day for CGST and Rs. 25 per day for SGST.
- For Nil Returns (No Tax Liability):
- In cases where the return is a Nil return (i.e., there is no tax liability for the period), the late fee is Rs. 20 per day.
- This is typically split as Rs. 10 per day for CGST and Rs. 10 per day for SGST.
Key Factors in Calculation
The calculation of the total late fee is straightforward and depends on two primary factors:
- Number of Days Delayed: This is the total count of days from the day after the due date up to and including the date the return is actually filed.
- Type of Return: Whether the return has a tax payable amount or is a Nil return determines the applicable daily late fee rate.
Calculation Formula
The late fee is simply determined by multiplying the applicable daily late fee rate by the total number of days the return has been delayed.
Total Late Fee = Daily Late Fee Rate × Number of Days of Delay
Practical Examples
-
Example 1: Return with Tax Liability
- Scenario: A business has a tax liability for a given month.
- Due Date for Filing: 20th of the subsequent month.
- Actual Filing Date: 30th of the subsequent month.
- Days of Delay: 10 days (from the 21st to the 30th, inclusive).
- Daily Late Fee: Rs. 50 (as there is tax liability).
- Total Late Fee Calculation: Rs. 50/day × 10 days = Rs. 500
- This amount comprises Rs. 250 for CGST and Rs. 250 for SGST.
-
Example 2: Nil Return
- Scenario: A business has no sales or purchases for a given month and is filing a Nil return.
- Due Date for Filing: 20th of the subsequent month.
- Actual Filing Date: 25th of the subsequent month.
- Days of Delay: 5 days (from the 21st to the 25th, inclusive).
- Daily Late Fee: Rs. 20 (as it's a Nil return).
- Total Late Fee Calculation: Rs. 20/day × 5 days = Rs. 100
- This amount comprises Rs. 50 for CGST and Rs. 50 for SGST.
Summary of GST Late Fees
The following table summarizes the daily late fees for various scenarios:
| Scenario | Daily Late Fee | CGST Component | SGST Component |
|---|---|---|---|
| With Tax Liability | Rs. 50 | Rs. 25 | Rs. 25 |
| Nil Return | Rs. 20 | Rs. 10 | Rs. 10 |
Consequences of Not Paying Late Fees
Failure to pay the calculated late fees can lead to several adverse consequences, including:
- The inability to file subsequent GST returns, which can create a compounding cycle of non-compliance.
- The blocking of e-way bill generation, disrupting the movement of goods.
- Potential for further penalties, interest on outstanding tax liabilities, or recovery actions initiated by the tax authorities.
How to Pay Late Fees
The GST portal automatically calculates the applicable late fee when you proceed to file a delayed return. This fee must be paid along with any outstanding tax liability and interest (if applicable) through the Challan Generation and Payment functionality within the GST portal itself.
