GST Late Fee and Interest: How They Are Calculated, With Examples

GST charges two separate things for delay. Late fee is for filing a return late: Rs 50 a day, or Rs 20 a day for a nil return, up to a cap. Interest is for paying tax late: 18% a year, counted by the day on the tax you pay in cash. You can owe one without the other.

Why are there two charges?

They punish different failures. Late fee, under section 47, is a flat daily charge for not filing on time. It does not depend on how much tax was due. Interest, under section 50, is the price of holding the government's money. It depends only on the amount and the number of days.

So a nil return filed late attracts late fee and no interest. And a QRMP taxpayer who pays a monthly challan late owes interest and no late fee. (QRMP is the scheme for quarterly returns with monthly payment, explained in our QRMP guide.)

What is the late fee for GSTR-1 and GSTR-3B?

The Act itself says Rs 100 a day under CGST, up to Rs 5,000, with the same again under the State law. Notifications have cut that down. What you actually pay is Rs 50 a day, or Rs 20 a day for a nil return, CGST and SGST together. Since June 2021 there is also a cap for each return.

How firm are these numbers? The caps for the first three rows are in Notifications 19/2021 and 20/2021-Central Tax, which give the central half. The Rs 25 and Rs 10 a day central rates for GSTR-3B are confirmed in the GST portal's own manual. The same rates for GSTR-1, and the Rs 10,000 figure, rest on secondary sources and on doubling the limit in section 47.

The fee is counted for each return separately. Miss three months and you have three late fees. A quarterly filer has one return a quarter, so one fee.

What is the late fee for GSTR-9?

These come from Notification 07/2023-Central Tax and section 47(2), doubled for the State share. If you also file GSTR-9C, the clock stops only when both are in. See GSTR-9: who must file and by when.

How is interest calculated?

The formula is: tax paid late x 18% x days of delay / 365. Days are counted from the day after the due date to the day you pay.

Which tax? That depends on the case.

• You declared the sale in that period's GSTR-3B, but filed late. Interest runs only on the part paid from the cash ledger. The part paid from input tax credit (ITC, the GST on your purchases) is left out.
• Cash was already in your ledger. Since 10 July 2024, money deposited in the cash ledger on or before the due date, and left there until the late return debits it, is also left out.
• You missed the sale altogether and pay later. Interest runs on the whole unpaid tax until the day you pay.
• You claimed credit you were not entitled to. Interest applies only if the wrong credit was actually used, from the date of use.

Is there a 24% rate?

You will see 24% quoted for wrongly claimed credit. Section 50(3) does allow a rate of up to 24%. But the rate actually notified for it is 18%. The Finance Act, 2022 changed the figure in Notification 13/2017-Central Tax from 24 to 18, with effect from 1 July 2017. So for a seller today, every GST interest calculation uses 18%.

Three worked examples

1. GSTR-3B filed 12 days late. Your turnover is Rs 90 lakh. October's tax is Rs 1,00,000. You pay Rs 60,000 from credit and Rs 40,000 in cash, on 2 December instead of 20 November.

• Late fee: 12 x Rs 50 = Rs 600.
• Interest: Rs 40,000 x 18% x 12/365 = Rs 237.
• Total: Rs 837.

2. Nil quarterly GSTR-1 filed 40 days late. No sales in the quarter.

• Late fee: 40 x Rs 20 = Rs 800, capped at Rs 500.
• Interest: nil. No tax was due.

3. GSTR-9 filed 45 days late. Turnover Rs 6 crore, all in one State.

• Late fee: 45 x Rs 100 = Rs 4,500.
• Cap: 0.04% of Rs 6 crore = Rs 24,000, so the full Rs 4,500 applies.

In each case the late fee is the smaller worry. Interest has no cap, and it keeps running.

How is late fee charged in the next return?

You do not get a bill. The portal works it out and shows it in Table 5.1 of GSTR-3B. The portal manual says the late fee for a month includes the fee for the delay in filing the previous month's GSTR-3B. In plain words: file October late, and the fee appears in November's return. Three things follow.

• Late fee and interest can be paid only in cash. Your credit balance cannot be used.
• The portal does not charge late fee under the IGST or cess heads.
• You cannot file a nil GSTR-3B while interest or late fee is outstanding.

For GSTR-1, reports of the September 2021 GST Council meeting say its late fee would also be filled into the next open GSTR-3B. For interest, reports of a January 2026 GSTN advisory say the figure the portal computes can be raised but not reduced. We could not confirm either point on an official page.

Can late fee or interest be waived?

Not by asking. Section 128 lets the government waive late fee by notification, on the GST Council's recommendation, for a class of taxpayers. It has done so several times. A recent case: Notification 08/2025-Central Tax waived the extra late fee on GSTR-9C for years up to FY 2022-23, if filed by 31 March 2025. Your tax officer cannot waive it for you alone, and we found no general waiver open as on 12 November 2026.

Interest is automatic under the law. The only way to reduce it is to pay sooner.

The mistake people usually make

They delay the return because they cannot pay the tax yet. That adds late fee on top of interest and blocks the next return, since a GSTR-3B cannot be filed while an earlier one is pending. If cash is short, at least deposit what you can into the cash ledger before the due date. That amount stops attracting interest. Then file as soon as the rest is arranged.

The second mistake is skipping nil returns. Six forgotten nil GSTR-3B cost Rs 3,000 for returns that take a minute each.

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