Understanding GSTR 3B Late Fee
Goods and Services Tax (GST) is an indirect tax levied on the supply of goods and services in India. To simplify the GST return filing process, the government introduced a monthly return, GSTR 3B. The return is filed by registered taxpayers, and it contains information about the purchases, sales, input tax credit, and tax liability of a taxpayer.
Late filing of the GSTR 3B attracts a late fee, which is calculated on a daily basis. The late fee can increase if the return is not filed even after a month from the due date. In this blog, we will discuss the GSTR 3B late fee and its implications.
GSTR 3B Late Fee Structure
The late fee for GSTR 3B is calculated on a daily basis until the return is filed. The late fee is Rs 50 per day for each return, i.e., Rs 25 for CGST and Rs 25 for SGST. Therefore, the total late fee would be Rs 100 per day, i.e., Rs 50 for CGST and Rs 50 for SGST.
If the return is not filed even after a month from the due date, the late fee increases to a maximum of Rs 10,000. The late fee is calculated at Rs 50 per day for each return, up to a maximum of Rs 5,000 for CGST and Rs 5,000 for SGST.
For example, if a taxpayer has not filed the GSTR 3B return for two months, the late fee will be Rs 200 per day, i.e., Rs 100 for CGST and Rs 100 for SGST. After 30 days, the late fee will increase to a maximum of Rs 10,000.
Penalties for Late Filing of GSTR 3B
In addition to the late fee, there are penalties for late filing of GSTR 3B. The penalty is Rs 10 per day for each return, i.e., Rs 5 for CGST and Rs 5 for SGST, up to a maximum of Rs 10,000.
For example, if a taxpayer has not filed the GSTR 3B return for two months, the penalty will be Rs 20 per day, i.e., Rs 10 for CGST and Rs 10 for SGST. After 30 days, the penalty will increase to a maximum of Rs 10,000.
Implications of Late Filing of GSTR 3B
Late filing of GSTR 3B can have several implications, including:
- Interest on the late payment of taxes: If the GSTR 3B return is filed after the due date, the taxpayer will have to pay interest on the late payment of taxes. The interest rate is 18% per annum, and it is calculated on the tax liability from the due date of filing the return until the date of payment.
- Inability to claim input tax credit: If the GSTR 3B return is not filed on time, the taxpayer may not be able to claim input tax credit on the purchases made during the period.
- Prosecution: If the taxpayer fails to file the GSTR 3B return even after the due date, it may attract prosecution under the GST Act.
Tips for Avoiding GSTR 3B Late Fee
Late filing of GSTR 3B can be avoided by following some tips, such as:
- Mark the Due Date: The first and foremost step is to mark the due date for filing the GSTR 3B return. It is important to set a reminder and ensure that the return is filed on or before the due date.
- Keep Track of Input Tax Credit: It is important to keep track of input tax credit that is eligible for claim. This will ensure that the taxpayer files the return on time and claims the input tax credit on eligible purchases.
- Maintain Accurate Records: The taxpayer must maintain accurate records of all transactions, including purchases, sales, and input tax credit. This will help in filing the GSTR 3B return accurately and on time.
- Seek Professional Help: If the taxpayer is unable to file the GSTR 3B return on time, it is recommended to seek professional help. Tax professionals can help in filing the return and avoiding late fees and penalties.
Late Fee Calculation for GSTR 3B
The late fee for GSTR 3B is calculated on a daily basis until the return is filed. The late fee is Rs 50 per day for each return, i.e., Rs 25 for CGST and Rs 25 for SGST. Therefore, the total late fee would be Rs 100 per day, i.e., Rs 50 for CGST and Rs 50 for SGST.
If the return is not filed even after a month from the due date, the late fee increases to a maximum of Rs 10,000. The late fee is calculated at Rs 50 per day for each return, up to a maximum of Rs 5,000 for CGST and Rs 5,000 for SGST.
Impact of GSTR 3B Late Fee on Small Businesses
Small businesses can face significant impact due to GSTR 3B late fee. The late fee can have an adverse impact on the financial health of the business, especially if the business is already facing financial difficulties. The following are some of the impacts of GSTR 3B late fee on small businesses:
- Financial Burden: Small businesses may find it challenging to pay the late fee, which can increase rapidly, especially if they have not filed the return for an extended period. The financial burden of paying the late fee can affect the cash flow of the business and result in a strain on the working capital.
- Loss of Reputation: Late filing of GSTR 3B can lead to penalties and interest, which can damage the reputation of the business. The reputation of the business is crucial for attracting customers, suppliers, and investors. A negative reputation can result in a loss of business and revenue.
- Increased Compliance Costs: Small businesses may need to spend additional resources on hiring professionals or purchasing software to ensure timely filing of returns. This can increase the compliance costs of the business and result in reduced profitability.
- Legal Implications: Late filing of GSTR 3B can result in legal implications, which can further add to the financial burden of the business. Legal implications can result in litigation costs, legal fees, and penalties, which can have a severe impact on the business’s financial health.
Conclusion
GSTR 3B late fee can have a significant impact on small businesses. The late fee can result in a financial burden, loss of reputation, increased compliance costs, and legal implications. It is important for small businesses to file their GSTR 3B returns on time and avoid any penalties and interest on the late payment of taxes. Small businesses can take the help of tax professionals to ensure timely filing of returns and avoid any adverse impact on their financial health. The government has provided several provisions and schemes to support small businesses, and it is important for them to take advantage of these provisions and comply with the tax laws to avoid any legal implications.
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Frequently Asked Questions (FAQ’s)
Q1.) Can GSTR 3B be revised?
No, GSTR 3B once filed cannot be revised. Any corrections or modifications can be made in the next month’s return.
Q2.) Is it mandatory to pay tax liability before filing GSTR 3B?
Yes, it is mandatory to pay the tax liability before filing GSTR 3B. The return will be filed only after the payment of tax liability.
Q3.) Can GSTR 3B be filed without the payment of tax liability?
No, GSTR 3B cannot be filed without the payment of tax liability. The taxpayer must pay the tax amount using the payment modes available on the GST Portal.
Q4.) What is the penalty for not filing GSTR 3B?
The penalty for not filing GSTR 3B is Rs 50 per day for each return, up to a maximum of Rs 10,000.
Q5.) Can a taxpayer claim input tax credit in GSTR 3B?
Yes, the taxpayer can claim input tax credit in GSTR 3B. The input tax credit can be claimed for the tax paid on purchases made for the business. The input tax credit can be utilized to offset the tax liability on sales made by the business.
