General information, not professional advice. GST rules, rates and due dates change by notification. Check the current position on the GST Portal or with your CA before you act on anything here.
Update, 13 October 2026. The 57th GST Council (8 October 2026) recommended a late fee waiver on the section 39(1) return for taxpayers with turnover up to ₹5 crore in the preceding year who file by the end of the month it was due, a ₹10,000 general penalty and no notices below ₹10,000 of tax. It is not in force, and the figures below still apply. See what the Council proposed.
The short version
- Late fee runs per day per return until you file, split between CGST and SGST, with a lower rate for nil returns and a cap linked to turnover.
- Interest runs at 18% a year on tax paid late, from the due date to the date of payment, and applies even if the late fee is waived.
- Excess or wrongly used input tax credit attracts interest at 24% a year in the specified cases.
- A wrong invoice, no invoice, or non-registration attracts penalties under Section 122, with a general penalty for other contraventions.
- Nothing is saved by not filing: the fee accrues whether or not you have sales.
The late fee
Charged per day, per return, from the day after the due date until you file, shared equally between CGST and SGST. A nil return carries a lower daily rate than a return with turnover. There is an overall cap, and the cap is graded by turnover, so the smallest taxpayers face the lowest maximum.
Two things people get wrong. First, the fee applies to each pending return, so three unfiled months are three fees, not one. Second, a nil period is not exempt: no sales still means a return.
Interest on tax
Interest of 18% a year runs on tax paid after the due date, from the due date to the date of actual payment. It is computed on the net tax paid in cash, and it is separate from the late fee: an amnesty on fees does not touch interest.
Where input tax credit has been wrongly availed and utilised, the rate in the specified cases is 24% a year. Credit claimed but reversed before use generally does not attract that higher rate.
Penalties
Section 122 sets out penalties for specific offences that a small business can commit without meaning to:
- Supplying goods or services without an invoice, or issuing an incorrect or false invoice
- Issuing an invoice without an actual supply
- Collecting tax and not paying it to the government within three months
- Not registering when liable to
- Taking or using input tax credit wrongly
For these, the penalty is broadly the higher of ₹10,000 or the tax involved, with a general penalty of up to ₹25,000 for contraventions that have no specific penalty. Where tax is short-paid without fraud, a demand can be raised with a penalty of 10% of the tax or ₹10,000, whichever is higher, and paying before the notice or shortly after reduces or removes the penalty.
Being blocked from filing
Beyond the money, there is a practical consequence: if you have not filed GSTR-3B for the preceding periods, your ability to file GSTR-1 can be blocked, and e-way bill generation can be blocked for persistent non-filers. That converts a paperwork problem into an operational one, because you cannot despatch goods.
Limiting the damage
- File the return even if you cannot pay. The late fee stops on filing; interest continues only on the unpaid tax. Not filing costs you both.
- File oldest first. Returns are sequential, and the later ones will not open until the earlier ones are in.
- Watch amnesty windows. Late-fee waivers for old periods appear from time to time and are worth using when they do.
- Fix the cause. Most delays are missing documents, not missing intent. The monthly file is the fix.
Staying ahead of the dates
AawazAI shows the month's GST dates on the Aaj screen and sends due-date reminders naming the GSTIN, and the GSTR-1, 3B and 9 summaries sit under Reports built from entries you already confirmed. The app does not file, so the last step is yours or your CA's, but nothing should be waiting on a document by then.
Never miss a date for want of a document
Record each sale and purchase as it happens, and the month's GST summaries are ready when your CA asks. Reminders name the GSTIN so the right shop is chased.
Frequently asked questions
What is the late fee for GSTR-3B?
A per-day fee from the day after the due date until you file, split equally between CGST and SGST, at a lower daily rate for nil returns, subject to a cap that is graded by turnover. Each pending return carries its own fee.
How much interest does GST charge on late payment?
18% a year on tax paid after the due date, calculated from the due date to the date of payment. Input tax credit wrongly availed and utilised attracts 24% a year in the specified cases.
Is there a penalty for not registering under GST?
Yes. Failing to register when liable is an offence under Section 122, with a penalty broadly of the higher of ₹10,000 or the tax involved. Tax due for the unregistered period remains payable with interest.
Can I file GSTR-1 if GSTR-3B is pending?
Not necessarily. Filing of GSTR-1 can be blocked where previous GSTR-3B returns have not been filed, and persistent non-filing can also block e-way bill generation.
Should I file a return if I cannot pay the tax?
Yes. Filing stops the late fee from accruing. Interest continues on the unpaid tax until it is paid, but you avoid compounding the problem with fees and with blocked filings.