1. Interest on Late Payment
- Rate of Interest: If the GST payment is delayed, an interest rate of 18% per annum is levied.
- Calculation: The interest is calculated from the day following the due date of payment to the date of actual payment.
2. Late Fees for Filing GSTR-3B
- CGST and SGST: For late filing of GSTR-3B, a late fee of ₹50 per day (₹25 under CGST and ₹25 under SGST) is applicable.
- IGST: For IGST, the late fee is ₹100 per day.
- Maximum Late Fee: The maximum late fee is ₹5,000 for each return.
3. Penalty for Non-payment or Short Payment
- General Penalty: If there is a genuine reason for the delay, a general penalty of 10% of the tax amount due or a minimum of ₹10,000, whichever is higher, is imposed.
- Fraud Cases: In cases where non-payment or short payment of tax is due to fraud or willful misstatement, the penalty can be 100% of the tax amount due.
4. Prosecution and Arrest
- Serious Offenses: In cases of serious offenses such as tax evasion, falsification of accounts/documents, the government may initiate prosecution which can lead to arrest.
5. Seizure of Goods
- Confiscation: Goods and conveyances used for transport can be confiscated if GST is not paid.
6. Restriction on Input Tax Credit
- ITC: If GST is not paid on time, the recipient of the supply may not be able to claim Input Tax Credit (ITC).
Compliance Tips
- Timely Filing: Ensure that GSTR-3B and other returns are filed within the due dates.
- Regular Payments: Make GST payments regularly to avoid interest and penalties.
- Accurate Records: Maintain accurate records and reconcile accounts periodically to ensure all due GST is paid.
By understanding and complying with these regulations, businesses can avoid the financial and legal consequences associated with late GST payments.
