GST interest and late fees: basics

Interest on delayed tax payment is charged at 18% p.a. on the portion paid in cash. Late fees are per day of delay, with lower amounts for nil returns and turnover-based caps.

Interest (Section 50)

• Late payment of tax: 18% p.a., from the day after the due date. For delayed returns, interest is charged on the net tax liability paid in cash (proviso to Section 50(1)).
• ITC wrongly availed and utilised: interest under Section 50(3) at the notified rate. Credit availed but not utilised does not attract interest (as clarified through Rule 88B).

Late fee (Section 47)

• Charged per day of delay in filing returns. For GSTR-3B/GSTR-1 the notified amounts are lower for nil returns, and maximum caps depend on turnover (Notifications 19/2021 and 20/2021-Central Tax, as amended).
• Late fee is paid in cash and is not creditable.

Always compute interest and late fee from the notifications in force for the period. Amnesty schemes have occasionally waived them.