As per the GST law in India, a clear description is given about the penalties and offenses applicable in different cases. All the business owners, Tax professionals, and Chartered Accountants must possess this information to avoid facing any consequences of not following it. For reducing corruption and tax evasion, specific provisions are taken into account by the GST law concerning the offenders, such as imposing penalties, arrest, or prosecution.
It is crucial to fill the GST-Return on the requisite time to employ in a disciplined manner. This is a must to avoid facing any penalty under GST or paying GST interests applicable to late fees. In case of a taxpayer failing to submit the GST return as per the required dates, it implies the taxpayer liable to pay a late charge with interest added in it.
Want to know how to calculate interest on the late payment of GST? If yes, then we recommend reading this article to know about the penalty on late payment of GST and refund applicable in GST.
The interest due to being paid upon the delayed GST payment is generally calculated on the amount of NTL (Net Tax Liability).
If a taxpayer commits any offense, it must pay the penalty for it as per the GST laws. In the law, there are certain principles defined for the GST penalties.
Late GST filing
For the late filing of GST-return, the penalty is specified below:
- A person/business fails to provide the annual GST return amount as per the applicable dates.
- A person/business fails to provide the respective inward/outward supply details, final or monthly GST-return amount within the due dates applicable to it.
Penalty for delaying GST Return submission
If the taxpayer cannot file the GST return on the applicable dates, he or she is liable to pay the penalty for the late filing of GST return. As per the act, the late fee amount is 100 INR per day. It gets divided for CGST and SGST 100 INR each, and the total amount becomes 200 INR per day (it is subject to the alterations made in the law). And the maximum amount remains 5,000 INR. When delayed the filing of IGST, no late fee is applicable.
With the late fee, an extra amount adds up by the interest, which is about 18% per annum. The GST penalty calculator is used to calculate the interest on the tax amount to be submitted.
GST interest rates
The GST late payment applicable interest can be on the specific conditions as mentioned below:
- The inability to pay tax on time: For this reason, the interest amount will be calculated just from the day due to the tax paid under the GST payment rules.
- Excess or undue ITC (Input Tax Credit) claim or OTL (Output Tax Liability) reduction: Interest will be calculated on the excess or under claim/reduction.
What to know about the GST refund?
The GST refund is only applicable to the person or business which is registered under the GST laws. The return is applicable when the tax amount paid for GST is exceeding the liability amount. In the rules of GST, there are standardized rules applicable to claim the refund. The process linked with the claiming of a refundable amount of GST is not similar to the ones applicable to ITC (Input Tax Credit).
Why do businesses/persons file for the refund of GST?
The reasons which make a business or person applying for a refund in GST may include the following*:
- When the taxpayer submits an excess tax amount without paying attention to it.
- When there is a pending amount in the ledger account because of 0 tax amount.
- If ITC (Input Tax Credit) of an export supplier is higher than the GST amount to be paid.
- When the refund is not claimed after the provisional assets are finalized.
*In the list mentioned above, all the reasons are indicative. The instances may be more than this for refunds applicable in GST.