Late fee, penalty and interest on GSTR 3B filing

Want to file a GST Return? But are you unaware of the latest updates in the process of the GST Registration in India?

If yes, then fret not. The GST Registration online process is simple. However, late payments can result in complications.

Read this article to enlighten you about late fees, penalty and interest related to the GSTR-3B filing and reduce the chances of being called a tax defaulter.

What is GSTR 3B?

While simplifying the process of GST Registration in India, the GST council introduced the concept of GSTR 3B returns.

GSTR 3B is a self-declared summary of GST returns that is to be filed every month.

From July 2017, every taxpayer comes under the ambit of filing GSTR 3B. Furthermore, as a part of the GST Registration online process, a taxpayer can file the form online.

Are you liable to file GSTR 3B?

• Businessmen liable to file monthly returns under GSTR-1, GSTR-2, GSTR-3.
• Those who are registered under the composition plan are taxpaying at a higher rate.
• Non-Resident Taxable persons
• Input Service Distributor
• Person who is liable to deduct and collect tax at source

What is Late Fee?

Delay in filing GST registration online can lead to various consequences such as late fee deduction. The late fee is mentioned in Section 47 of the CGST Act, 2017. As per the latest guidelines, the following charges will be levied

The maximum late fees levied could be ₹ 500 per return. This capping is applicable from 1st july 2017 to April 2021 gst returns only.Whereas the taxpayer is liable to pay this amount in cash as they are barred from using Input Tax Credit (ITC).

How to calculate the penalty for GSTR 3B?

Suppose the prescribed due date for filing returns is 20th December 2021. However, If the GSTR-3B is filed on 25th December 2021, the delay is of 5 days, then the late fee calculated will be (number of days of delay) * (late fee amount)

If sales is made - 5 days * ₹. 50 = ₹. 250

If no sale is made - 5 days * ₹. 20 = ₹ 100

How to deposit Late fee?

The amount of late fee is automatically calculated by the GST portal. Therefore, one cannot file a GST return without paying the late fee amount. Furthermore, late or non-payment of GST attracts interest.

What is Interest?

For leveling the GST Registration in India, interest is imposed as per section 50 of the CGST Act for the delay in GST payment. In addition, the amount is imposed on the net tax liability upon reduction of input tax credit claims.

The interest is paid by taxpayers who,

• Delays GST payment
• Claims excess of Input Tax Credit (ITC)
• Reduce excess output liability

However, interest is payable only if the taxpayer pays taxes using the cash ledger balance. Also, the concept of capping is not applied in the case of interest.

For example, the due date of tax payment is 20th December 2021. However, if the taxpayer fails to pay the tax of ₹ 20,000 and makes the payment on 20th January 2022, then the interest calculated will be,

(The amount of tax) * (days of delay) / (total days of year) * (interest rate)

Rs. 20thousand * 31/365 * 18% = ₹ 306

Ramifications of not filing GSTR 3B

1. Late fees - It is imposed on the tax defaulter immediately after the due date. The amount increases with each passing day until it reaches the capping limit. Additionally, the amount is automatically included in the coming month's GSTR-3B.
2. Interest - An Interest of 18% is also imposed immediately after the passing of the due date.
3. Restriction of Generation of E-waybill - non-payment of returns for two consecutive periods will cause restriction of E-waybill for all forms of outward supply.
4. Penalty - Upon non-payment of taxes will result in a penalty as per the provisions made under the act.
5. Cancellation of GST number - Non-payment of GST returns for 6 consecutive months will cancel GST registration by the GST officer.
6. Recovery - After several notices and reminders, if the taxpayer still refrains from paying the returns, a GST officer can initiate recovery proceedings under section 78 of the act. In comparison, actual recovery is made under section 79 of the act.  Recovery is made through refund dues, debtors, seized property, goods etc.
7. Restrictions on ITC - one can only claim Input Tax Credit by tax payment to the Government. Upon non-payment, one cannot claim the Input Tax credit.

Endnote

Without any doubt, the GST Registration process in India has been simplified using the latest techniques and technologies. GST Registration online is one such process by which you can easily register for and claim returns.

However, if you are still busy and could not file GST returns by yourself, then reach out to professionals at TAxbox India.

Taxboxindia.com can help in GST Registration,ISO Certification,FSSAI Registration,Company Registration,GST Return Filing,IEC Registration,RCMC,Income tax return filing,OPC formation,Partnership firm Registration and many more services. We have tried to conclude all the points related to above article,in case you need support for any registration and annual filing services,you can reach to us at info@taxboxindia.com,taxboxindia@gmail.com or post your query on https://www.taxboxindia.com/contact-us.php.