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2017-10-08 22:15:07GST CenterEnglishInterest and Penalty under GST: Check Interest on late payment of tax, Also Check Interest on Refund, Penalty for not filing GST returns on... & Penalty on Late Payment of GST %%sep%% %%sitename%%

Interest and Penalty under GST

3 min read

Government implemented the massive tax reform in business through GST in July. It is important for businesses to understand various compliances and implications for non-comply with various rules under GST. With compliances to be followed, there will be interest and penalty for non-compliance. In this article we will understand Penalty and Interest to be paid for non-compliance under GST regime.

The due date for payment of GST is 20th of every month. However if you fail to pay the tax by due date then the taxpayer has to pay the interest on late payment of tax.

The taxpayer is liable to pay interest to the government when:

  1. GST is paid after the due date of payment of tax
  2. Input tax credit has been claimed in excess or where it was not eligible to be claimed

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Interest on late payment of tax

ScenarioInterest rate per annum
Payment of tax made after due date     18%
Input tax credit claimed in excess      24%

Interest on Refund

If there is a refund claim by the tax payer, department is going to pay interest at 6% per annum.


Over and above the interest on late payment, there is a penalty if you are not filing the GST returns on time.

MonthlyGSTR 1, 2, 3, 6,7 and 3BRs. 100 per day subject to maximum of Rs. 5000/-
QuarterlyGSTR 4Rs. 100 per day subject to maximum of Rs. 5000/-
Annual returnGSTR 9Rs. 100 per day subject to a maximum of 0.25% of turnover
Final returnGSTR 10Rs. 100 per day subject to maximum of Rs. 5000/-

The above penalty is for each type of taxes applicable i.e. IGST, SGST and CGST

E.g.: If a business owner is doing business within state ( intra-state), then he will be paying Rs. 100 per day for SGST and Rs. 100 per day for CGST. If a business owner is doing business in 2 or  more states, he will be paying Rs. 100 per day for SGST, Rs.100 per day for CGST and Rs. 100 per day for IGST.

To conclude, timely payment of Tax and GST compliance has taken paramount importance in the new tax regime. It will help businesses manage your GST compliance score. Hence, businesses need to get organized and ensure the compliance filing on a monthly basis.

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Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

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