GST Payment Due Dates, Rules and Interest on Late Payment
All the registered taxpayers are required to make the payment of their taxes on GST Portal latest by the 20th day of next month for a particular tax period.
Taxpayers registered under composition scheme will have to pay GST only once every quarter, latest by 18th day of next month of a particular quarter.
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Penalties under GST
For effective implementation of GST law, it requires strict action against the tax offenders. The Government has come up with three approaches Penalties under GST registration for the offenders:
- Monetary Penalties
The word penalty is not defined under GST Act, so reference of various judicial pronouncements and principal of jurisprudence needs to be taken.
In simple words, we can say that a penalty is a punishment imposed by a law for committing an offense or failing to do something which the person is liable to do. Penalty can be divided into two parts i.e. civil or criminal.
The Act list out 21 offenses under section 122(1) which are subject to a penalty of Rs.10, 000 or the amount of tax involved, whichever is greater.
- Non-payment or late payment of GST attracts a Penalties under GST
- Interest is to be paid by every taxpayer who.
- Pays GST after due date – 18% p.a.
- Claims excess Input Tax Credit – 24%p.a.
- Reduces excess Output Tax liability – 24% p.a.
- Late Filing attracts penalty called late fee: If the person is not able to file the return within the timeline than the Penalties GST in case of normal return is Rs.50/- per day and Rs.20 per day in case of nil return.
- Composition Scheme: If the person is not eligible for composition scheme and yet registered under the scheme with the intention to commit fraud the penalty shall be 100% of the tax due or Rs.10000/- whichever is higher and in other cases 10% of the tax due or Rs.10000/- whichever is higher.
- Wrongful GST registration Rate: If a person is charging higher GST than the rate applicable and not depositing the tax collected to the Government the Penalties GST shall be 100% of the tax due or Rs.10000/- whichever is higher.
- Not Issuing Invoice/Wrongful Invoice: If the person fails to issue an invoice for the goods/services, the penalty shall be 100% of the tax due or Rs.10000/- whichever is higher. If the invoice issued contains wrong/misleading details the penalty shall be Rs.25000/-
- Corporal Punishment: In cases where the amount of tax is more than Rs.100 lakhs it attracts penalty and jail time. If the amount of tax is Rs.100-200 lakhs it will be up to 1year, the tax amount is Rs.200-500 Lakhs it will be up to 3 years and if the tax amount is more than Rs.500 lakhs it will be up to 5 years.
- General Penalty: Any case where the penalty is not specific the penalty shall be Rs.25000/-
- It means conducting of legal proceedings against someone in respect of criminal charge. Any person with the deliberate intention of committing a fraud is liable to prosecution under GST.
- Some of the examples can be described as issuing any invoice without supplying any goods/services, obtaining any refund by fraud, submitting a wrong financial record, etc.
- If the concerned authority believes a person has committed such offenses penalty provisions under GST.
- Minor breaches or errors by the personae below Rs.5000/- will be allowed to rectify and the authorities shall issue a warning without substantial penalty.
- Tax offender shall be issued with a show cause notice and will be given the opportunity of being heard.
- Tax authority shall provide with an explanation regarding the penalty being charged.
- If the breach is disclosed by the Person the tax authority might reduce the penalty charges.
Interest Applicable on GST Late Payment
Interest will be levied by the Government on any GST late payment made by the taxpayer. Normally, the GST liability of a taxpayer must be settled before the 20th and filing of GSTR-3 return. In case the taxpayer fails to pay the liability due on that date, interest will be levied on the late payment. In this article, we look at the rate of interest levied on GST late payment.
Interest at the rate of 18% per annum will be applicable for GST late payment. In case it is determined that the taxpayer misstated output tax liability in the GST return, then interest at the rate of 24% would be applicable. In addition to the interest, penalty could also be levied on the taxpayer under GST for erroneous return filing, wilful misstatement or fraud.
Interest Payable on GST Refund
In case the Government is liable to pay any amount to the taxpayer due to a refund, then the following interest rate will be paid by the Government on any delayed payment.
- Interest payable on Refund in respect of Appeal – 6% per annum
- Interest Payable on delayed payment of refund – 6% per annum
- Delayed payment of interest on refund order passed by Appellate Authority or Appellate Tribunal or Court – 9% per annum
Due Dates of GST Payment with Penalty Charges on Late Payment
Goods and Service Tax is an ambitious tax regime applicable from 1st of July 2017 made a number of indirect taxes subsumed into it. The government has now revealed the due dates for the payment of GST. The GST payment due date for general taxpayers is 20th of next month while the GST payment due date for composition scheme dealers is 18th of next quarter.
Rules and Regulations of GST Payment for Taxpayers
- The electronic cash ledger will be credited if payment for tax, interest, penalty and fee has been made by internet banking, credit card, NEFT, RTGS. While the amount can be used for the payment of interest, tax, penalty which is remaining in the electronic cash ledger of the taxpayer
- A payment for GST PMT-06 form is done through challan while the challan is only valid for the time period of 15 days. When the payment is done successfully, a Challan Identification Number (CIN) is generated. If in any case the CIN is not generated than the taxpayer can file Form GST PMT-07
- Online payments even made after 8 pm will be credited on the same day to the taxpayer’s account. While there will be no physical challan accepted for the GST payment while the challans will be generated from the gst.gov.in only for all the payments of taxes, fees, penalty, interest
- For the payment of challan under the 10000 rupees limit, it can be done over the counter with cash, cheques, demand draft through authorized banks while for the payments exceeding the amount of 10000 will be collected through digital mode only.