Interest on Late Payment of GST
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 October.
All the registered taxpayers are required to make the payment of their taxes on GST Portal latest by the 20th of this october for a particular tax period. Taxpayers registered under composition scheme will have to pay GST only once every quarter.
GST Payment Due Date
- > GST Payment due date (normal taxpayer): 20 days from the end of the tax period month.
- > GST Payment due date (composition scheme taxpayer): 18 days from the end of a tax quarter.
Interest Applicable 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.
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 authorised banks while for the payments exceeding the amount of 10000 will be collected through digital mode only
Interest and Penalty on late payment of GST
A person is liable to pay interest/penalty as per following conditions and rules.
- Any payment after the due date will attract an interest at the rate of 18%.
- If a person makes excess or undue claims of input credits or excess/undue reduction in tax liability, they will have to pay an interest at the rate of 24% on the excess claim or reduction amount.
- The penalty of 10% of the unpaid or short paid tax or Rs. 10,000, whichever is higher, is to be levied in case of non-payment of GST even after 3 months from the originally scheduled date.
- In case of a fraud or misstatement to escape tax, the penalty of Rs. 10,000 or 100% of the tax will be applicable.
Hence, it is imperative for you as a tax payer, to avoid instances of interest payment. Default in payment of tax will also have an impact on your compliance rating. Timely and accurate compliance will help you to avoid unnecessary cash outflow and achieve a good compliance score.
For assistance with GST return filing or Making GST payments, get in touch with an GST Advisor