Answer By law4u team
Late fee and penalty under GST are charges imposed when a taxpayer fails to comply with the provisions of GST law such as delayed filing of returns, non payment of tax, or other violations. These provisions are governed under the Central Goods and Services Tax Act, 2017. Late fee is mainly charged when GST returns are not filed within the prescribed due date. It is calculated on a per day basis from the due date until the actual date of filing, subject to maximum limits depending on the type of return. Even if there is no tax liability and a nil return is filed late, a late fee may still apply. The late fee is separate from tax and must be paid before filing the return. Penalty, on the other hand, is imposed for specific offences or violations such as non payment or short payment of tax, wrongful claim of input tax credit, issuing invoices without supply, or failure to register when required. Penalties may be fixed amounts or may be calculated as a percentage of the tax involved depending on the nature and seriousness of the offence. Apart from late fee and penalty, interest is also charged when tax is paid after the due date. Interest is calculated on the outstanding tax amount for the period of delay. Failure to comply with GST provisions can also lead to additional consequences such as notices from the department, recovery proceedings, suspension or cancellation of GST registration, and legal action in serious cases. Understanding the difference is important because late fee relates to delay in filing returns, while penalty relates to violation of legal provisions.
