Understanding GST Late Fees Under Section 47
Section 47 of the Central Goods and Services Tax (CGST) Act imposes a daily statutory penalty on taxpayers who fail to submit their monthly or quarterly returns (such as GSTR-3B and GSTR-1) on or before the designated statutory due dates. The standard daily rates are divided equally between the Central Government (CGST) and State Government (SGST):
- Nil Tax Returns: ₹20 per day (₹10 CGST + ₹10 SGST) subject to a maximum cap of ₹500 (₹250 CGST + ₹250 SGST).
- Taxable Returns: ₹50 per day (₹25 CGST + ₹25 SGST) subject to statutory capping limits based on the taxpayer's Annual Aggregate Turnover (AATO).
Section 50 Interest on Net Cash Tax Liability
Following the retrospective amendment to Section 50 of the CGST Act, interest for delayed GST payment is levied strictly on the Net Cash Liability (the portion deposited via Electronic Cash Ledger after utilizing eligible Input Tax Credit). Interest is charged at a flat simple rate of 18% per annum computed as: (Net Tax × 18% × Days of Delay) / 365.
Frequently Asked Questions
Can GST late fees be waived or reduced?
Late fees can only be waived through official GST Amnesty Schemes notified by the CBIC via official gazette notifications. Normal taxpayers must pay auto-populated late fees in the subsequent tax period's GSTR-3B.
Is interest charged on the gross tax liability or net tax?
Interest under Section 50(1) is legally charged strictly on the net cash liability paid via challan. It is not charged on the portion settled through Input Tax Credit (ITC), provided the return is filed before commencement of any proceedings under Section 73 or 74.
Are late fees applicable on delayed GSTR-1?
Yes. Late fees under Section 47 apply to GSTR-1 filings. While earlier uncollected, the GSTN portal auto-populates accumulated GSTR-1 late fees into the subsequent month's GSTR-3B return payment table.