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What is late fee and penalty under GST?

What is late fee and penalty under GST?

24-Mar-2026

GST

Answer By law4u team

Late fee and penalty under GST are charges imposed when a taxpayer fails to comply with the provisions of GST law such as delayed filing of returns, non payment of tax, or other violations. These provisions are governed under the Central Goods and Services Tax Act, 2017. Late fee is mainly charged when GST returns are not filed within the prescribed due date. It is calculated on a per day basis from the due date until the actual date of filing, subject to maximum limits depending on the type of return. Even if there is no tax liability and a nil return is filed late, a late fee may still apply. The late fee is separate from tax and must be paid before filing the return. Penalty, on the other hand, is imposed for specific offences or violations such as non payment or short payment of tax, wrongful claim of input tax credit, issuing invoices without supply, or failure to register when required. Penalties may be fixed amounts or may be calculated as a percentage of the tax involved depending on the nature and seriousness of the offence. Apart from late fee and penalty, interest is also charged when tax is paid after the due date. Interest is calculated on the outstanding tax amount for the period of delay. Failure to comply with GST provisions can also lead to additional consequences such as notices from the department, recovery proceedings, suspension or cancellation of GST registration, and legal action in serious cases. Understanding the difference is important because late fee relates to delay in filing returns, while penalty relates to violation of legal provisions.

Answer By Anik

Dear client, Under the Goods And Services Tax (GST), a late fee and penalty are charges paid to the users for non-conformity of the provisions for TR under GST, by way of delay or paying GST returns and violating legal clauses. A late fee is applicable if the taxpayer didn't file GST returns within the due date of the preset extended for it. For example, in case of GSTR-3B and GSTR-1 late fee is generally equal to 50/- per day (25 CGST + 25 SGST ) and 20/- per day (10 CGST + 10 SGST ) if there is no tax liability (Nil return) subject to a prescribed maximum amount. This late fee continues to add up until the return is filed. In addition to late fee, interest @ 18% per annum is payable on any delay in payment of tax. A penalty, on the other hand, is levied for more serious offences like fraud, misstatement, suppression of facts, or non-payments/ short payments of tax. The general penalty in the chain of penalties of GST is submitted to the Government of India, the general penalty is Rs.10000 or 10% of tax (and /or) whichever is higher or in case of fraud, misdeed or giving false statement is charged up to 100% of tax amount. These provisions are meant for ensuring compliance and deterring evasion of taxes under the GST law. If you have any query please feel free to contact us.

Answer By Ayantika Mondal

Dear Client, The Goods and Services Tax (GST) system in India treats "late fee" and "penalty" as two different terms which both result from failure to meet legal requirements. Late fee is a mandatory payment which authorities impose when taxpayers fail to submit required reports by their designated submission dates and this rule applies to them regardless of their tax obligations. The Central Goods and Services Tax Act, 2017, Section 47 governs this tax system which calculates taxes based on daily fees that reach a specific upper limit. Importantly, taxpayers who fail to submit GSTR-3B or GSTR-1 returns will face a daily late fee that the government can decrease through their notification system. Late fee functions as a compensation mechanism which automatically activates when taxpayers fail to complete required procedures despite their nil tax return because taxpayers usually receive special rates in these situations. The government imposes a penalty when taxpayers break GST rules through actions like tax evasion and unauthorized input tax credit usage and issuing false invoices and hiding crucial information. The regulations of this law exist within Sections 122 and 138 which form the foundation of CGST Act rules. The penalty process establishes itself as a separate system from late fee which determines penalties based on the severity of offenses while assessing cases that involve criminal intent through examination of fraud and deliberate misconduct proof. The penalties range from set charges to a tax percentage and, in severe situations, lead to criminal prosecution. The late fee system handles situations where taxpayers fail to comply with regulations while the penalty system handles cases where taxpayers break tax rules which disrupt the GST system. I hope this answer is helpful. For further queries, contact us. Thank you.