Glossary
What are late fee and interest under GST?
Two separate charges for being late: a fee for the return, and interest for the tax.
Updated
In short
Late fee and interest under GST are the charges for filing a return late and paying tax late. SimpleERP does not compute them, but its registers help you file on time.
Under GST, a late fee is charged for each day a return is filed after its due date, and interest is charged on tax paid late. As notified, the late fee for GSTR-3B and GSTR-1 is ₹50 a day, or ₹20 a day for a nil return, subject to caps that depend on turnover. Interest is 18 percent a year on the tax paid late in cash, counted from the day after the due date.
Late fee and interest under GST: a worked example
Lakshmi Steel Furnitures files its September 2026 GSTR-3B on 30 October instead of 20 October, 10 days late, with ₹29,898 of tax payable in cash: output GST of ₹61,092 on ₹3,39,400 of sales, less ₹31,194 of input tax credit.
- Late fee: 10 days × ₹50 = ₹500 (₹250 CGST and ₹250 SGST).
- Interest: ₹29,898 × 18% × 10 ÷ 365 = ₹147.44.
- Total cost of being 10 days late: ₹647.44, paid with the return.
FAQ
Questions, answered
Is the late fee charged on nil returns?
The GST late fee is charged on nil returns too, at a lower rate of ₹20 a day as notified, with a lower cap. A business with no sales in a month still has to file on time, so set a reminder for the 11th and the 20th even in quiet months.
Is there a maximum late fee?
The GST late fee has a maximum. It is capped per return, and the caps are lower for smaller turnover bands and nil returns, as notified. The caps change from time to time; check the GST portal for the current figures.
Is interest charged on the whole tax or only on cash?
Interest on late payment is charged on the net tax paid in cash, after input tax credit, as amended. Credit wrongly availed and used attracts interest as well. Your accountant can work out the exact figure for your return.
Can the late fee be claimed as input tax credit or an expense?
No input tax credit is available on a late fee; it must be paid in cash. Whether it is allowed as an expense for income tax is a question for your accountant.
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