GST Late Fee and Interest: Rates, Caps & Calculation

Late GST returns attract two charges. A late fee under Section 47 runs per day of delay; for GSTR-3B the portal charges ₹25 CGST plus ₹25 SGST a day, or ₹10 plus ₹10 for nil returns, subject to notified caps. Interest under Section 50 applies to tax paid late, at 18% a year on the net cash portion, and 24% on wrongly used ITC.

Missing a GST due date is rarely catastrophic in itself, but the costs add up quietly: a daily late fee, interest on the tax paid late, blocked e-way bills, unhappy customers who cannot claim credit and, after three years, a return that can no longer be filed at all. This guide explains how each charge is calculated and how to keep them small.

What is the difference between late fee and interest?

	Late fee	Interest
Law	Section 47, CGST Act (plus SGST Act)	Section 50, CGST Act
Trigger	Return or statement filed after the due date	Tax paid after the due date, or ITC wrongly availed and used
Applies to	GSTR-1, GSTR-3B, GSTR-4, GSTR-9 and others	Mainly GSTR-3B (and any tax payment)
Basis	Per day of delay, with caps	Percentage per year on the amount paid late
Payable from	Cash ledger only	Cash ledger only
Applies to nil returns	Yes, at a lower rate	No (no tax due)

How is the GST late fee calculated?

Section 47(1) sets the statutory late fee for late statements and returns under Sections 37 (GSTR-1), 39 (GSTR-3B and others), 45 and 52 at ₹100 per day, up to ₹5,000, under the CGST Act — with the same under the SGST Act. Section 47(2) sets the annual return (GSTR-9) fee at ₹100 per day up to a quarter per cent of turnover in the state or UT.

These statutory amounts have been reduced by notification for most taxpayers. The GST portal's GSTR-3B guide describes the computation as:

GSTR-3B situation	CGST per day	SGST per day	Total per day
Return with tax liability	₹25	₹25	₹50
Nil return (no tax liability)	₹10	₹10	₹20

Notification 19/2021-Central Tax caps the total late fee for returns from the June 2021 period onward. For a nil GSTR-3B the excess over ₹500 (₹250 CGST + ₹250 SGST) is waived. For returns with liability, the cap depends on the taxpayer's turnover band set in the notification. GSTR-1 follows a similar structure under its own notification.

The portal calculates the fee automatically when you file late. You cannot file the return without paying it.

How is GST interest calculated?

Section 50(1) charges interest at a rate notified by the government, up to a statutory ceiling of 18%. The notified rate for late payment is 18% per annum, fixed by Notification 13/2017-Central Tax dated 28 June 2017. Interest runs from the day after the due date until the day the tax is paid.

Two refinements matter:

Net cash basis. The proviso to Section 50(1), in force from 1 June 2021, says that for supplies declared in a return filed after the due date, interest is levied only on the portion of tax paid by debiting the electronic cash ledger — except where the return is filed after proceedings under Section 73, 74 or 74A have begun for that period.
Wrongly used ITC. Section 50(3) charges interest on ITC that is wrongly availed and utilised, at a notified rate not exceeding 24%. ITC wrongly availed but sitting unused does not attract this interest.

Formula

Interest = Tax paid in cash late × 18% × days of delay ÷ 365

Worked example: a Thane catering supplier files GSTR-3B 25 days late

A Thane catering-equipment supplier (monthly filer) misses the GSTR-3B due date of 20 August 2026 for July 2026 and files on 14 September 2026 — 25 days late.

Its July figures:

Output tax: CGST ₹60,000 + SGST ₹60,000 = ₹1,20,000
ITC available: CGST ₹35,000 + SGST ₹35,000 = ₹70,000
Cash paid: CGST ₹25,000 + SGST ₹25,000 = ₹50,000

Late fee: 25 days × ₹50 = ₹1,250 (₹625 CGST + ₹625 SGST). This is below any cap, so the full amount is payable in cash.

Interest (on cash portion only): ₹50,000 × 18% × 25 ÷ 365 = ₹616.44, rounded to ₹616 (₹308 CGST + ₹308 SGST).

Total cost of the 25-day delay: ₹1,250 + ₹616 = ₹1,866, on top of the ₹50,000 tax.

If the supplier had been a nil filer for July and filed 25 days late, the late fee would have been 25 × ₹20 = ₹500 — exactly at the nil-return cap — and no interest.

Had it instead claimed ₹10,000 of blocked ITC and used it, a later demand would also carry interest under Section 50(3) on that ₹10,000 from the date of use.

You can check tax figures on individual invoices with the GST calculator before the return is prepared.

What else happens when returns are late?

Beyond fees and interest:

Sequence block. GSTR-3B must be filed in order, so one missed month blocks all later months.
Buyers lose credit. Late GSTR-1 means invoices reach buyers' GSTR-2B late; under the input tax credit rules, buyers cannot claim credit until it appears.
E-way bill restrictions. Persistent non-filing can block e-way bill generation.
Registration action. Prolonged non-filing can lead to cancellation of registration.
Three-year time bar. Following the Finance Act, 2023 change (Notification 28/2023-CT, effective 1 October 2023), the GSTN's June 2025 advisory confirmed the portal bars filing GSTR-1, GSTR-3B, GSTR-4, GSTR-5, GSTR-5A, GSTR-6, GSTR-7, GSTR-8 and GSTR-9 after three years from their due dates. An unfiled return that crosses this line cannot be filed, and the department may proceed by assessment instead.

How do I pay a late fee and interest?

Prepare the late return as usual on the portal.
The system computes the late fee and shows it in the payment section; interest appears in Table 5.1 (system-computed values can be reviewed).
Click Proceed to Payment. Check the cash required for tax, interest and late fee.
Create a challan (PMT-06) for any shortfall and pay by net banking, UPI, card, NEFT/RTGS or over the counter.
Offset liabilities and file the return with DSC or EVC.
For interest discovered later (for example after an audit), pay it through a voluntary payment (DRC-03) and keep the acknowledgement.

How do late fee and interest work for GSTR-1 and quarterly filers?

GSTR-1. A late GSTR-1 attracts a late fee for each day of delay, but no interest, because GSTR-1 does not involve any payment. The real cost of a late GSTR-1 is often commercial: your buyers' invoices do not reach their GSTR-2B on time, and they may hold your payment until they do. GSTR-1 must also be filed before the corresponding GSTR-3B liability can auto-populate correctly.

QRMP filers. Quarterly filers pay tax monthly for the first two months through PMT-06 by the 25th. If you use the self-assessment method and under-pay, interest runs on the shortfall from the 26th until it is paid. Under the fixed-sum method, the government's QRMP FAQ explains that no interest applies on the fixed amount if paid by the 25th. The quarterly GSTR-3B carries its own late fee if filed after the 22nd or 24th.

Annual return. GSTR-9 has a separate late fee under Section 47(2), capped as a percentage of turnover in the state or union territory. See GSTR-9 annual return.

How can you avoid late fees altogether?

Fix a monthly calendar. Close sales by the 5th, file GSTR-1 by the 10th, review IMS by the 15th and file GSTR-3B by the 18th — leaving a cushion before the 20th.
Keep a cash buffer in the electronic cash ledger for reverse-charge tax and any interest, which cannot be paid with credit.
File nil returns on time. Nil months are the easiest to forget and the cheapest to file.
Set reminders for the 11th, 13th, 20th, 22nd/24th and 25th as relevant to your filing pattern.
Do not wait for perfect data. File on time with the best information available; most corrections can be made in later periods (subject to time limits), while the late fee cannot be undone.
Check old periods. Make sure no return from earlier years is still pending, given the three-year bar.

Common mistakes

Assuming ITC can pay the late fee. It cannot; keep cash in the ledger.
Calculating interest on gross tax rather than the cash portion for late returns.
Ignoring nil returns. A nil GSTR-3B is still due; late nil returns build up fees month after month.
Waiting for an amnesty that may never come.
Letting old returns drift past three years — they become unfileable.
Not tracking QRMP dates. Quarterly filers still pay monthly through PMT-06; see QRMP scheme and IFF.

How is interest worked out when tax is paid in instalments?

Interest is calculated separately for each amount, for the days it remained unpaid. If ₹30,000 due on the 20th is paid as ₹10,000 on the 25th and ₹20,000 on the 30th, interest at 18% runs on ₹10,000 for 5 days (₹24.66) and on ₹20,000 for 10 days (₹98.63), a total of about ₹123. Paying part of the tax early therefore reduces interest even when you cannot pay it all.

Key takeaways

Late fee = per-day charge for late returns; interest = percentage charge for late tax.
GSTR-3B late fee on the portal: ₹50/day with liability, ₹20/day for nil, with notified caps.
Interest is 18% a year, on the cash-paid portion for late returns; 24% ceiling on wrongly used ITC.
Both are payable only in cash.
Returns more than three years past due can no longer be filed.

Payment reminders and a clean month-end close — both supported in Billing Software by Betterwork — make it easier to have sales data ready before the 11th and the 20th. For the return itself, see the GSTR-3B filing guide.

This guide is general information, not tax advice. Rules last checked on 20 October 2026; confirm with your tax professional for your situation.

Official sources

GST Late Fee and Interest: FAQ

Can the GST late fee be paid using input tax credit?

No. Late fees and interest must be paid from the electronic cash ledger. Input tax credit can only be used against tax liability. When you file a late GSTR-3B, the portal adds the late fee to the cash requirement, and you may need to create a challan even if your ITC covers the tax itself.

Is there a late fee for IGST?

Late fees under GST are levied under the CGST Act and the corresponding State or UT GST Act. The portal shows the fee split into CGST and SGST/UTGST components. Since the IGST Act borrows the CGST provisions, the effective fee per day is the CGST and SGST amounts added together.

Do I pay interest if I file late but have enough ITC?

Interest on tax declared in a late return is charged only on the portion paid through the cash ledger, under the Section 50(1) proviso — unless proceedings under Sections 73, 74 or 74A have started for that period. If all tax is covered by ITC, there is usually no interest, but the late fee still applies.

Can late fees be waived?

The government has used amnesty notifications to waive or cap late fees for certain periods and returns in the past. These are one-off measures with deadlines. There is no standing waiver you can apply for, so check the GST portal's news section for any current scheme before assuming one exists.

What if I never file an old return?

Since 2025 the portal bars filing GSTR-1, GSTR-3B, GSTR-9 and several other returns after three years from the due date. A non-filer can also face a best-judgment assessment, cancellation of registration and blocking of e-way bills. The late fee and interest are the smaller part of the cost.