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Late Fees and Penalties under GST

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Late Fees and Penalties under GST

Under the GST regime, one issue that has been persistent ever since the introduction of GST in 2017 is the inconsistency in GST Return filings by a registered taxpayer. In order to simplify and organise Indian Taxation System, a host of prerequisites for return filings have been laid by the CBIC , and any delay and/or error in  the same can result in late fees and penalties, and even cancellation of GST Registration.

Penal Provision under GST
A registered taxpayer under GST can be liable to following offences and penalties for non-compliance to GST regulations:

Late Fees: In case of delay in filing GST returns, late fees or an overdue fine is applicable to the registered taxpayer.

The late fees applicable for all the forms except GSTR 9 are as follows:

Inter-state supply:
Name of the Act Late fees per day
CGST Act, 2017 Rs 100
SGST Act/ UTGST Act, 2017 Rs 100
Total Rs 200
P.S: Under each act, the late fees applicable has been limited to Rs 5000.

As a relief measure, the following reduced rates of late fees are applicable for a temporary period:
Name of the Act  Reduced late fees per day
CGST Act, 2017 Rs 25
SGST Act/ UTGST Act, 2017 Rs 25
Total Rs 50
Intra-State Supply
As per the IGST Act, for inter-state supplies, the late fee is approximately equal to the sum of fees prescribed under both CGST and SGST Act
Name of the Act late fees per day
IGST Act, 2017 Rs 200
Reduced late fee
Name of the Act  Reduced late fees per day
IGST Act Rs 50
Nil-Return Supply
Name of the Act  late fees per day
CGST Act, 2017 Rs 50
SGST Act/ UTGST Act, 2017 Rs 50
IGST Act Rs 100
Reduced Late fees
Name of the Act  Reduced late fees per day
CGST Act Rs 10
SGST Act/ UTGST Act Rs 10
IGST Act Rs 20
Late fees applicable for Annual Return form GSTR 9
Name of the Act  late fees per day
CGST Act Rs 100
SGST Act/ UTGST Act Rs 100
IGST Act Rs 200
As per GST law, the total amount of late fees applicable for Annual Return form GSTR 9 cannot exceed 0.25% of annual turnover in the given financial year.

Interest: Along with the late fees, a non-compliant taxpayer is also liable to pay interest under the following conditions
  • Delayed payment of GST
  • Excessive ITC claim
  • Reduced excess Output Tax Liability
The interest rate applicable are as follows
Non Compliance Interest Applicable
Delayed GST Payment 18% p.a.
Excessive ITC claim 24% p.a.
Reduced excess Output Tax Liability 24% p.a.
The Interest has to be calculated from the next day on which tax was due.

Cancellation of Registration: The registration of the taxpayer can be cancelled under the following circumstances:
  • A regular dealer has not furnished returns for a continuous period of 6 months.
  • A composition dealer has not furnished returns for 3 quarters.
  • A person who has taken voluntary registration has not commenced business within 6 months from the date of registration.
  • Registration has been obtained by fraud, willful misstatement or suppression of facts.
Confiscation of Goods and/or Conveyance

For the following offences, the penalty specified is confiscation of goods and/or conveyances and levy of fine - which will be INR 10,000 or an amount equal to the tax evaded:
  • A person does not account for the goods on which he is liable to pay tax.
  • A person supplies or receives goods in breach of any provisions or rules with the intent to evade payment of tax.
  • A person supplies any goods liable to tax without having applied for registration.
  • A person uses a conveyance for the carriage of taxable goods in breach of any provisions or rules.
Imprisonment and Fine

The circumstances under which imprisonment is applicable are:
  • Obstructing or preventing any officer in the discharge of his duties, or tampering with or destroying any evidence or documents – 6 months imprisonment with fine
  • Failure to supply any information required under the law or supplying false information - 6 months imprisonment with fine
  • Tax evaded or input tax credit wrongly availed or refund wrongly taken of an amount exceeding INR 50 Lakhs, but not exceeding INR 1 Crore - Imprisonment which may extend to 1 year with fine
  • Tax evaded or input tax credit wrongly availed or refund wrongly taken of an amount exceeding INR 100 Lakhs, but not exceeding INR 2.5 Crores - Non-bailable imprisonment which may extend to 3 years with fine
  • Tax evaded or input tax credit wrongly availed or refund wrongly taken of an amount exceeding INR 2.5 Crores - Non-bailable imprisonment which may extend to 5 years with fine.
IRIS GST is a registered GSP under the GST regime and provider of premium quality GST compliance tools in India. With tools like IRIS Sapphire (invoice management) and IRIS Topaz (Eway Bill management), IRIS GST aims to provide a hassle-free GST compliance experience across the nation.

For any queries or to book our free demo, mail us at support@irisgst.com.

About Ashwini Gorhe

Ashwini

Ashwini Gorhe, a Chartered Accountant, is associated with IRIS as a Financial Analyst. She has around 6 years of experience in compliance space which includes XBRL reporting, GST and Data analysis. She is actively involved in the IRIS Sapphire (GST filing solution) and IRIS Topaz (E-way bill solution) product development. Before GST, she was handling US compliance analyzing US financial statements and reviewing XBRL filings for US and India market.

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Kannaki 1 month, 2 weeks ago

Dear Mam,

I need to Ask about onething about gst1r .. In our concern outward supplies billed below 1.5 crore but we had a option as monthly return. i need to change as quater filing how will i change this.. and i didnt filed gstr1 monthly... if there any issuses for this pls clarify. any penalty will occurs?

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