GST penalties, interest and late fees

Late fee

A late fee is charged for each day a return is filed after its due date. The amount depends on the return and on whether you had tax to pay for the period, and the government has reduced or waived it for some periods. Check the portal for the current amount and for any relief that applies to you.

Interest

Interest is charged on tax you pay late, and separately on input tax credit you claimed unduly or in excess. It runs from the due date until the day you pay. For tax paid late the yearly rate is notified by the government, up to the first maximum shown below. For credit claimed wrongly the rate is also notified, up to the second, higher maximum. The portal works out interest on the payment screen, and you can check it against your own calculation.

Penalty

A penalty applies to specific faults, such as not issuing a proper invoice, not registering when required, or understating tax. The amount and the conditions depend on the fault and on whether it was a mistake or intended. Penalties are decided by the tax officer, and you have a right to reply before one is final.

How to avoid them

• Use the return calendar on the portal and file before the date, even when you have no sales.
• Pay the tax together with the return, not later.
• Check your figures against the portal before you file, because a filed GSTR-3B cannot be revised.
• Claim input tax credit only on invoices you are entitled to claim it on.
• Keep invoices, e-way bills and payment proof, so you can answer a notice.

If you receive a notice, read the due date for the reply and talk to your accountant straight away.

Figures from the official source

• Interest on tax paid late:Up to 18% a year, at the rate the government notifiesas of 2026-10-18 · CGST Act, 2017, section 50(1)
• Interest on credit claimed unduly or in excess:Up to 24% a year, at the rate the government notifiesas of 2026-10-18 · CGST Act, 2017, section 50(3)

Official sources

• GST portal: returns user guide
• CGST Act, 2017 (CBIC consolidated copy)

Related guides

• GST returns overview
• GSTR-3B explained
• Input tax credit basics

Questions