Goods and Services Tax (GST) has simplified the indirect tax system in India by bringing all indirect taxes under one umbrella. As per the GST regime, taxpayers need to file their returns every month, which includes GSTR-1, GSTR-2A, and GSTR-3B. GSTR-3B is a monthly return that summarizes all the sales and purchases made by the taxpayer. In this blog, we will discuss the interest on late filing of GSTR-3B.
What is GSTR-3B?
GSTR-3B is a summary return that contains details of all the inward and outward supplies made by the taxpayer in a month. It also includes the details of tax liability and input tax credit (ITC) availed by the taxpayer. GSTR-3B needs to be filed by the 20th of every month, for the previous month’s transactions.
What is the Interest Rate for Late Filing of GSTR-3B?
As per the GST regime, if a taxpayer fails to file their GSTR-3B return within the due date, they will be liable to pay interest on the late filing of GSTR-3B. The interest rate is calculated at 18% per annum, on the outstanding tax liability, from the due date of filing the return until the actual date of filing.
For example, if a taxpayer has a tax liability of INR 10,000 for the month of March 2023 and fails to file their GSTR-3B return by the due date, i.e., 20th April 2023, they will be liable to pay interest on the outstanding tax liability at 18% per annum, from 21st April 2023 until the actual date of filing.
What are the Consequences of Late Filing of GSTR-3B?
Apart from the interest on late filing of GSTR-3B, there are other consequences of not filing the return within the due date. They are:
- Penalty: As per the GST regime, a late fee of INR 50 per day (CGST + SGST) and INR 100 per day (IGST) is levied on taxpayers who fail to file their GSTR-3B return within the due date, subject to a maximum of 0.25% of the taxpayer’s turnover.
- Input Tax Credit (ITC) Blockage: If a taxpayer fails to file their GSTR-3B return for two consecutive months, they will be blocked from claiming ITC until they file their pending returns.
- Legal Action: In case a taxpayer continues to default in filing their GSTR-3B return for more than two consecutive months, they may face legal action, which can include prosecution or cancellation of their GST registration.
In conclusion
Timely filing of GSTR-3B is crucial for a smooth GST compliance process. Failing to file the return within the due date can lead to the payment of interest, penalty, and blockage of ITC. Taxpayers should ensure that they file their GSTR-3B returns within the due date to avoid any unwanted consequences.
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Frequently Asked Questions (FAQs)
Q1. What is GSTR-3B?
A1. GSTR-3B is a summary return that summarizes all the sales and purchases made by the taxpayer in a month. It also includes the details of tax liability and input tax credit (ITC) availed by the taxpayer.
Q2. What is the due date for filing GSTR-3B?
A2. The due date for filing GSTR-3B is the 20th of every month, for the previous month’s transactions.
Q3. What is the interest rate for late filing of GSTR-3B?
A3. The interest rate for late filing of GSTR-3B is 18% per annum, on the outstanding tax liability, from the due date of filing the return until the actual date of filing.
Q4. When is a taxpayer liable to pay interest on the late filing of GSTR-3B?
A4. A taxpayer is liable to pay interest on the late filing of GSTR-3B if they fail to file their return within the due date.
Q5. What are the consequences of late filing of GSTR-3B?
A5. The consequences of late filing of GSTR-3B include the payment of interest, penalty, blockage of ITC, and legal action.
Q6. How is the penalty calculated for late filing of GSTR-3B?
A6. The penalty for late filing of GSTR-3B is INR 50 per day (CGST + SGST) and INR 100 per day (IGST), subject to a maximum of 0.25% of the taxpayer’s turnover.
Q7. What is ITC blockage in case of late filing of GSTR-3B?
A7. If a taxpayer fails to file their GSTR-3B return for two consecutive months, they will be blocked from claiming ITC until they file their pending returns.
Q8. What legal action can be taken in case of continued default in filing GSTR-3B return?
A8. In case a taxpayer continues to default in filing their GSTR-3B return for more than two consecutive months, they may face legal action, which can include prosecution or cancellation of their GST registration.
