Two different charges apply when GST returns are filed late. The late fee is a fixed daily amount for filing the return after the due date, regardless of whether any tax was due. Interest is a percentage charge on tax that was paid after its due date. Many taxpayers confuse the two or assume one covers the other. This guide explains how each is calculated under current rules, how the caps work, and how to pay. All amounts quoted are the combined CGST and SGST figures as the law stands today, and may be revised by notification.
Late fee for GSTR-3B and GSTR-1
Under current rules the late fee for each day of delay is ₹50 per day for a return with tax liability or outward supplies, and ₹20 per day for a nil return. The fee is capped per return according to the taxpayer's aggregate turnover in the previous financial year:
| Situation | Per day | Maximum per return (under current rules) |
|---|---|---|
| Nil return (no outward supplies and no tax liability) | ₹20 | ₹500 |
| Turnover up to ₹1.5 crore | ₹50 | ₹2,000 |
| Turnover above ₹1.5 crore and up to ₹5 crore | ₹50 | ₹5,000 |
| Turnover above ₹5 crore | ₹50 | ₹10,000 |
The same structure applies to GSTR-1 and GSTR-3B separately, so a monthly filer who is 30 days late with both returns pays two late fees. For QRMP filers the late fee applies to the quarterly GSTR-1 and GSTR-3B; there is no late fee on the optional IFF or on the monthly PMT-06 payment, although interest applies to a late PMT-06 payment. GSTR-5A filed by OIDAR suppliers also attracts a late fee on the same per-day basis.
Interest at 18% per year
Interest is charged under current rules at 18% per annum on tax paid after the due date. Since 2021 the law has been clear that interest is computed on the net cash tax liability, that is, the portion of the tax paid through the electronic cash ledger after setting off input tax credit, and not on the gross liability. Interest runs from the day after the due date of the return to the date on which the amount is debited from the cash ledger. A higher rate of 24% applies in the specific case of input tax credit wrongly availed and utilised, or output tax reduced through a wrong credit note, under current rules.
Practical warning: the portal's auto-computed interest in GSTR-3B is a suggestion based on the filing date, not a final assessment. If you paid part of the tax into the cash ledger before the due date but filed late, you may be entitled to lower interest; conversely, if the auto-computation misses a short payment from an earlier period, the department can still demand it later. Keep your own interest working.
Late fee for GSTR-9 and GSTR-9C
The annual return has its own late fee, charged per day of delay and capped at a percentage of turnover in the state or union territory. Under current rules the fee is tiered by turnover: a lower daily rate with a cap of 0.04% of turnover for taxpayers with turnover up to ₹5 crore, a higher daily rate with the same percentage cap for turnover between ₹5 crore and ₹20 crore, and the full statutory rate of ₹200 per day with a cap of 0.5% of turnover above ₹20 crore. GSTR-9C does not carry a separate late fee under current rules, but the annual return is treated as incomplete until the reconciliation statement is filed where it is required, so the GSTR-9 late fee effectively continues.
Late fee for GSTR-10 (final return)
When a registration is cancelled, the taxpayer must file the final return in GSTR-10 within three months of the cancellation order or the effective date of cancellation, whichever is later. The late fee accrues per day from that date and, under current rules, is capped at ₹10,000 (₹5,000 under CGST and ₹5,000 under SGST) after the most recent rationalisation. Because many taxpayers forget GSTR-10 entirely, the cap is often reached. Filing GSTR-10 is also a precondition for having the cancellation treated as complete.
How to pay late fee and interest
- Automatically in the next return: Late fee for a delayed GSTR-3B or GSTR-1 is computed by the portal and shown in the next GSTR-3B. It must be paid from the cash ledger before that return can be filed. Interest is also auto-populated in GSTR-3B and can be edited if your own computation differs.
- Voluntarily through DRC-03: Where you discover a short payment or interest for an earlier period, or want to pay before a notice arrives, use Form DRC-03 to make a voluntary payment. Select the reason, the tax period and the heads (tax, interest, late fee, penalty), and pay from the cash ledger. DRC-03 is also the form used to pay amounts admitted in response to a notice.
- Late fee on the annual return: Paid at the time of filing GSTR-9 itself; the portal computes it when you submit.
- Late fee on GSTR-10: Paid at the time of filing the final return.
Worked example
Suppose a monthly filer with turnover of ₹3 crore files GSTR-3B for April 2026 on 10 June 2026 instead of 20 May 2026, with a net cash tax liability of ₹1,00,000. The delay is 21 days. The late fee is 21 × ₹50 = ₹1,050, which is below the ₹5,000 cap for that turnover slab. Interest is ₹1,00,000 × 18% × 21 ÷ 365, roughly ₹1,036. If GSTR-1 for the same month was also filed on 10 June, a further late fee of 30 days × ₹50 = ₹1,500 applies for that return. Our calculator does this arithmetic for any combination of return, delay and turnover.
Reducing the exposure
- File nil returns on time: the nil fee is small per day but adds up over several months and blocks later filings.
- Pay the tax into the cash ledger even if the return is not ready; interest stops on the amount deposited and offset.
- Watch for amnesty notifications; they are time-limited and usually apply only to returns filed within the window.
- Keep the registration active or cancel it formally; a dormant GSTIN keeps accruing nil-return late fees.
If late fees and interest have already built up, Fastlegal can reconcile the ledgers, compute the correct amounts, file the pending returns and respond to any notices the department has issued.
Frequently asked questions
Is the late fee charged under both CGST and SGST?↓
Yes. The figures quoted in this guide are the combined amount. For example, ₹50 per day is ₹25 under the CGST Act plus ₹25 under the SGST or UTGST Act, and the ₹20 per day nil-return fee is ₹10 plus ₹10. The portal shows them as two separate lines.
Can the late fee be waived?↓
Only by a government notification. From time to time the GST Council recommends an amnesty that reduces or waives late fees for returns filed within a window. Outside such a scheme, the portal computes the fee automatically and the officer has no discretion to reduce it.
Is interest charged on the late fee itself?↓
No. Interest applies to tax paid late, not to late fees. But a late fee that remains unpaid blocks the filing of the next GSTR-3B, which then becomes late too, so an unpaid fee indirectly grows into more fees.
We filed GSTR-3B on time but paid the tax a week later. Does interest apply?↓
GSTR-3B cannot be filed until the tax is paid, so this situation usually means the return itself was filed late. If the tax was short-paid and topped up later, interest at 18% runs on the shortfall from the due date to the date of payment.
Does a cancelled registration still attract late fees?↓
Yes, for every return due up to the effective date of cancellation, and for the final return GSTR-10, which must be filed within three months of cancellation. Late fee for GSTR-10 accrues per day until it is filed.
This guide is general information under rules current at the date shown, not professional advice for your situation. Rules, due dates and fees change by notification.
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