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Interest on late payment of GST

Interest on late payment of GST

Interest on late payment of GST: We are providing here complete information regarding Interest on late payment of GST in this article.

Interest on late payment of GST  : Evolution of GST in India

Interest on late payment of GST: The idea of a Goods and Services Tax (GST) for India was first mooted sixteen years back, during the Prime Ministership of Shri Atal Bihari Vajpayee. Thereafter, on 28th February 2006, the then Union Finance Minister in his Budget for 2006-07 proposed that GST would be introduced from 1st April 2010. The Empowered Committee of State Finance Ministers (EC), which had formulated the design of State VAT was requested to come up with a roadmap and structure for the GST. Joint Working Groups of officials having representatives of the States as well as the Centre were set up to examine various aspects of the GST and draw up reports specifically on exemptions and thresholds, taxation of services and taxation of inter-State supplies. Based on discussions within and between it and the Central Government, the EC released its First Discussion Paper (FDP) on GST in November 2009. The FDP spelled out the features of the proposed GST and has formed the basis for the present GST laws and rules.

Interest on late payment of GST

Interest on late payment of GST: In March 2011, Constitution (115th Amendment) Bill, 2011 was introduced in the Lok Sabha to enable levy of GST. However, due to lack of political consensus, the Bill lapsed after the dissolution of 15th Lok Sabha in August 2013.

On 19th December 2014, The Constitution (122nd Amendment) Bill 2014 was introduced in the Lok Sabha and was passed by Lok Sabha in May 2015. The Bill was taken up in Rajya Sabha and was referred to the Joint Committee of the Rajya Sabha and the Lok Sabha on 14th May 2015. The Select Committee submitted its report on 22nd July 2015. Thereafter, the Constitutional Amendment Bill was moved on 1st August 2016 based on political consensus. The Bill was passed by the Rajya Sabha on 3rd August 2016 and by the Lok Sabha on 8th August 2016. After ratification by a required number of State legislatures and assent of the President, the Constitutional amendment was notified as Constitution (101st Amendment) Act 2016 on 8th September 2016. The Constitutional amendment paved way for the introduction of Goods and Services Tax in India.

Interest on late payment of GST

Interest on late payment of GST: After GST Council approved the Central Goods and Services Tax Bill 2017 (The CGST Bill), the Integrated Goods and Services Tax Bill 2017 (The IGST Bill), the Union Territory Goods and Services Tax Bill 2017 (The UTGST Bill), the Goods and Services Tax (Compensation to the States) Bill 2017 (The Compensation Bill), these Bills were passed by the Lok Sabha on 29th March, 2017. The Rajya Sabha passed these Bills on 6th April 2017 and were then enacted as Acts on 12th April 2017. T 2015. 6 on 08.09.2016

Thereafter, State Legislatures of different States have passed respective State Goods and Services Tax Bills. After the enactment of various GST laws, GST was launched with effect from 1st July 2017 by Sh.Narendra Modi, Hon’ble Prime Minister of India in the presence of Sh.Pranab Mukherjee, the then President of India in a mid-night function at the Central Hall of Parliament of India.

Interest on late payment of GST

Interest on late payment of GST: When a Registered Dealer misses filing GST Returns within due date late fees is levied by the government.

GSTR-1 due date for the months of July to Nov 2017 (monthly) and July to Sept 2017 (quarterly) was 10th Jan 2018.

If GSTR-1 is not filed within this due date you will be liable to pay late fees of Rs. 200 for every day of delay.

Non-payment or late payment of GST attracts Interest.

Late Fees on GST Returns

Interest on late payment of GST: When a GST Return is filed after the due date, late fees to be applicable.

Interest on late payment of GST notification Latest Updates

Interest on late payment of GST: The government has reduced the late fees for GSTR-1, GSTR-3B(October 2017 onwards), GSTR-4, GSTR-5, GSTR-5A and GSTR-6 as follows:-

ParticularsLate Fees
Normal Return

(GSTR-1, GSTR-3B, GSTR-4, GSTR-5, GSTR-5A, and GSTR-6)

Rs. 50 per day of delay
Nil Return (GSTR-1, GSTR-3B, GSTR-4, GSTR-5 and GSTR-5A)Rs. 20 per day of delay

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Note that the maximum late fees that can be charged cannot exceed Rs 5,000.

Interest on late payment of GST example,

Interest on late payment of GST: A taxpayer has filed GSTR-3B for the month of December 2017 (due date 20th Jan 2018) on 23rd January 2018.

Amount of late fees to be paid:

Rs. 50 per day * 3 days = Rs. 150 (Rs. 75 CGST + Rs. 75 SGST)

If the above return was a return with ‘Zero’ tax liability then late fees will be:

Rs. 20 per day * 3 days = Rs. 60 (Rs. 30 CGST + Rs. 30 SGST)

Interest on late payment of GST waived

Interest on late payment of GST: The government has waived late fees for GSTR-3B from July to September 2017. Any late fees paid for these months will be credited back to Electronic Cash Ledger under Tax.  This can be later utilized for payment of GST Liability.

Interest on late payment of GST with example

Interest on late payment of GST: taxpayer files his GSTR-3B for the month of July, 3 days after due. He had to pay a late fee of Rs. 600 (Rs 200 per day * 3 days). This amount will be refunded in the taxpayers Electronic Cash Ledger

Interest on late payment of GST:-Late Fees for GST Return as per GST Act

  • All returns except Annual Returns: Rs. 200 per day (Rs. 100 CGST + Rs. 100 SGST) of default up to a maximum of Rs 5,000.
  • Annual Returns: Rs. 200 per day (Rs. 100 CGST + Rs. 100 SGST) of default up to a maximum of 0.25% of Turnover.

Interest on Late Payment of GST Due

Interest on late payment of GST: Interest has to be paid by every taxpayer who:

  • Makes a delayed GST payment i.e. pays GST after the due date.
  • Claims excess Input Tax Credit
  • Reduces excess Output Tax Liability

GST has to be paid at the time of filing GSTR-3B and GSTR-4.

If GST is not paid within the due dates of filing return Interest at following rates has to be paid:

ParticularsInterest
Tax paid after due date18% p.a.
Excess ITC Claimed or excess reduction in Output Tax24% p.a.

The Interest has to be calculated from the next day on which tax was due.

 interest on late payment of GST calculation:- Example

Interest on late payment of GST: A taxpayer fails to make a tax payment of Rs. 10,000 for the month of December 2017 (due date -20th Jan 2018). He makes the payment on 20th Feb 2018. Interest will be calculated as follows:

Rs. 10,000 * 31 days/365 * 18% = Rs. 153

Thus it is important to make tax payment and file GST Return within due dates…

Interest on late payment of GST

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Conclusion Interest on late payment of GST

Interest on late payment of GST: In this article, we discussed all information about Interest on late payment of GST, the points are –

  • About Interest on late payment of GST
  • Interest on late payment of GST in Highlights

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