Goods and Services Tax (GST) compliance is crucial for businesses in India. While timely GST payments keep businesses compliant, any delay can result in penalties and interest charges. The tax department imposes late fees and interest when a business fails to file a GST return or pay tax liability on time. Hence, understanding these aspects is vital for businesses to avoid unnecessary costs and stay compliant.
Taxpayer Due Dates Under GST
The due dates for GST returns vary depending on the taxpayer type and return form. Below is a summary of key return filing deadlines:
| Return Form | Due Date |
| GSTR-1 (Monthly) | 11th of the next month |
| GSTR-1 (Quarterly) | 13th of the month succeeding the quarter |
| GSTR-3B (Monthly) | 20th of the next month |
| GSTR-3B (Quarterly) | 22nd or 24th of the month succeeding the quarter (QRMP Scheme) |
| CMP-08 (Quarterly) | 18th of the month succeeding the quarter |
| GSTR-4 (Annual) | 30th June of the next financial year |
| GSTR-5 (Monthly) | 13th of the next month |
| GSTR-5A (Monthly) | 20th of the next month |
| GSTR-6 (Monthly) | 13th of the next month |
| GSTR-7 (Monthly) | 10th of the next month |
| GSTR-8 (Monthly) | 10th of the next month |
| GSTR-9 (Annual) | 31st December of the next financial year |
| GSTR-9B (Annual) | 31st December of the next financial year |
| GSTR-9C (Annual) | 31st December of the next financial year |
| GSTR-10 (Final Return) | Within three months of GST registration cancellation |
| ITC-04 (Annual/Half-yearly) | 25th April of the next financial year (for AATO up to ₹5 crore) |
| 25th October (Apr-Sep) & 25th April (Oct-Mar) for AATO exceeding ₹5 crore |
Interest on Late Payment of GST
Interest is applicable on delayed GST payments after reducing eligible input tax credit (ITC). The interest is charged when a taxpayer:
- Fails to pay GST liability by the due date.
- Claims excess ITC.
- Under-reports output tax liability.
Interest Rates on Late GST Payments
The interest rates on late GST payments are set by the Central Board of Indirect Taxes and Customs (CBIC) under the GST Act. The applicable interest rates are:
| Reason for Interest Levy | Applicable Interest Rate |
| Late payment of GST dues | 18% per annum |
| Excess ITC claimed or excess reduction in output tax liability | 24% per annum |
Interest Under the QRMP Scheme
For businesses under the Quarterly Return Monthly Payment (QRMP) scheme, interest is levied differently:
Fixed Sum Method (FSM):
- No interest if tax is paid on time using the pre-determined amount (35% of the previous quarter’s tax or the exact tax paid in the last month of the previous quarter).
- If payment is delayed beyond the 25th of the next month, interest at 18% per annum is applicable on the shortfall amount.
Self-Assessment Method (SAM):
- Taxpayers who pay based on their actual tax liability must ensure timely payments.
- If tax is not fully paid by the 22nd/24th* of the month succeeding the quarter, interest at 18% per annum is applicable from the due date until payment.
QRMP Payment Due Dates and Interest Applicability
| Period | Due Date | Interest Applicability |
| First two months of the quarter (Monthly Tax Payment) | 25th of the next month | No interest if paid by due date. If delayed, interest at 18% per annum applies from the 26th. |
| Third month of the quarter (Final Quarterly Payment) | 22nd/24th* of the month succeeding the quarter | Interest at 18% per annum applies if tax is not paid by the due date. |
Note:
- QRMP Taxpayers who do not wish to make monthly payments can choose to pay the entire liability at the end of the quarter while filing GSTR-3B.
- However, interest at 18% per annum will be charged on any unpaid tax from the due date of monthly payments (25th of the next month) until the final payment is made at the end of the quarter.
Category X and Category Y States for QRMP*
The QRMP scheme due dates (22nd or 24th of the next month) are based on the taxpayer’s state:
- Category X States/UTs (22nd of the next month):
- Chhattisgarh, Madhya Pradesh, Gujarat, Maharashtra, Karnataka, Goa, Kerala, Tamil Nadu, Telangana, Andhra Pradesh
- Union Territories: Daman and Diu, Dadra and Nagar Haveli, Puducherry, Andaman and Nicobar Islands, Lakshadweep
- Category Y States/UTs (24th of the next month):
- Himachal Pradesh, Punjab, Uttarakhand, Haryana, Rajasthan, Uttar Pradesh, Bihar, Sikkim, Arunachal Pradesh, Nagaland, Manipur, Mizoram, Tripura, Meghalaya, Assam, West Bengal, Jharkhand, Odisha
- Union Territories: Jammu and Kashmir, Ladakh, Chandigarh, New Delhi
Interest for Composition Taxpayers
Composition taxpayers file their GST returns annually (GSTR-4) but must make quarterly tax payments using CMP-08. If the CMP-08 payment is delayed beyond the 18th of the next month after the quarter ends, interest at 18% per annum is applicable.
How to Calculate Interest on GST Dues
Interest is calculated on the net tax liability that remains unpaid beyond the due date. The formula for interest calculation is:
Interest = (Outstanding Tax Amount) × (Interest Rate) × (Number of Days Delay) / 365
Example Calculation:
A taxpayer has an outstanding GST liability of ₹50,000 and delays payment by 30 days. The interest rate applicable is 18% per annum.
Interest = (50,000 × 18 × 30) / 365
= ₹739.72
So, the taxpayer must pay ₹50,739.72 to clear the GST dues.
Common Scenarios Leading to Interest Charges
Missed GST payment deadline
The due date for GST payments is generally the 20th of the following month for regular taxpayers. If the payment is made after this date, interest is applicable.
Incorrect ITC claim
If a business claims more input tax credit than eligible, it must reverse the excess claim with 24% interest per annum from the date of utilization.
Non-payment of GST under Reverse Charge Mechanism (RCM)
If GST under RCM is not paid within the due date, interest applies at 18% per annum.
Late Fees Under GST
A late fee is a penalty charged for missing the GST return filing deadline. Late fees are applicable even if the return is a Nil return, meaning no sales or purchases occurred.
Late Fee for GSTR-3B and GSTR-1
| Type of Return | Late Fee Per Day | Maximum Late Fee |
| GSTR-3B & GSTR-1 (Regular Return) | ₹50 (₹25 CGST + ₹25 SGST) | ₹10,000 (₹5,000 CGST + ₹5,000 SGST) |
| GSTR-3B & GSTR-1 (Nil Return) | ₹20 (₹10 CGST + ₹10 SGST) | ₹500 (₹250 CGST + ₹250 SGST) |
Late Fee for GSTR-9 (Annual Return)
| Turnover | Late Fee Per Day | Maximum Late Fee |
| Up to ₹5 crore | ₹50 (₹25 CGST + ₹25 SGST) | 0.04% of turnover |
| ₹5-20 crore | ₹100 (₹50 CGST + ₹50 SGST) | 0.04% of turnover |
| Above ₹20 crore | ₹200 (₹100 CGST + ₹100 SGST) | 0.25% of turnover |
Late fees must be paid in cash and cannot be adjusted against the ITC balance.
Example:
A taxpayer files GSTR-3B on 23rd January 2025, whereas the due date was 20th January 2025 (3-day delay).
Late fee = ₹50 × 3 = ₹150 (₹75 CGST + ₹75 SGST)
For Nil returns: ₹20 × 3 = ₹60 (₹30 CGST + ₹30 SGST)
How to Avoid Interest and Late Fees on GST Payments
- Ensure timely GST payments: Businesses should enable reminders and maintain proper cash flow management to pay GST dues before the due date.
- Reconcile ITC regularly: Match ITC claims with GSTR-2B to ensure no excess credit is claimed.
- File GST returns on time: Use automated reminders and GST compliance tools to avoid late filing of GSTR-3B and other returns.
- Maintain proper records: Maintain accurate tax records to avoid tax mismatches and under-reporting of liability.
Interest and late fees on GST can impact business cash flow. Understanding GST due dates, interest rates, and penalties helps businesses maintain compliance and avoid financial strain.
