GST Penalties & Late Fees: Complete Guide 2026
Understanding GST penalties helps you avoid costly mistakes. From late filing fees to interest on delayed tax payment, here's everything you need to know about GST penalties in 2026.
Late Filing Penalties
GSTR-1 (Sales Return)
| Turnover | Late Fee Per Day | Maximum Penalty |
|---|---|---|
| Above ₹1.5 Crore | ₹100/day (₹50 CGST + ₹50 SGST) | ₹10,000 |
| Up to ₹1.5 Crore | ₹50/day (₹25 CGST + ₹25 SGST) | ₹10,000 |
| Nil Return | ₹20/day (₹10 CGST + ₹10 SGST) | ₹500 |
GSTR-3B (Summary Return)
| Turnover | Late Fee Per Day | Maximum Penalty |
|---|---|---|
| Above ₹1.5 Crore | ₹50/day (₹25 CGST + ₹25 SGST) | ₹5,000 |
| Up to ₹1.5 Crore | ₹20/day (₹10 CGST + ₹10 SGST) | ₹2,000 |
| Nil Return | ₹20/day (₹10 CGST + ₹10 SGST) | ₹500 |
❌ Example: Late Filing Cost
Scenario: Turnover ₹2 Crore, filed GSTR-3B 15 days late
Penalty: ₹50 × 15 days = ₹750
Plus: 18% interest on unpaid tax for those 15 days
Calculate Your Penalty
Use our Penalty Calculator to estimate late filing fees and interest.
Calculate Penalty →Interest on Delayed Tax Payment
Rate: 18% per annum (calculated daily)
Applies to: Any GST not paid by due date
Interest Calculation
Formula: (Tax Amount × 18% × Number of Days) ÷ 365
📊 Example
Tax due: ₹1,00,000
Delay: 30 days
Interest = (1,00,000 × 18% × 30) ÷ 365 = ₹1,479
Non-Compliance Penalties (Section 122)
| Offense | Penalty |
|---|---|
| Supply without invoice / incorrect invoice | 10% of tax or ₹10,000 (whichever higher) |
| Tax evasion | 100% of tax evaded or ₹10,000 (whichever higher) |
| Wrong ITC claim | 100% of wrongly claimed ITC or ₹10,000 (whichever higher) |
| Not paying collected tax | 10% of tax or ₹10,000 (whichever higher) |
| Transporting goods without e-way bill | 100% of tax or ₹10,000 (whichever higher) + seizure |
| Obstruction during inspection | ₹25,000 |
Registration Penalties
| Violation | Penalty |
|---|---|
| Operating without registration (when required) | 10% of tax or ₹10,000 (whichever higher) |
| Not canceling registration within 30 days of cessation | ₹10,000 |
Document & Record Penalties
| Violation | Penalty |
|---|---|
| Not maintaining books of accounts | ₹25,000 |
| Not issuing invoice | 10% of tax or ₹10,000 (whichever higher) |
| Fake invoices | 100% of tax + criminal prosecution |
How to Pay Penalty
- Login to GST Portal
- Services → Payments → Create Challan
- Select "Tax" for late filing fee
- Select "Interest" for delayed tax interest
- Select "Penalty" for other penalties
- Generate challan and pay online
Penalty Waiver & Reduction
When Penalty Can Be Reduced
- Voluntary disclosure: Pay tax + interest before notice = 15% penalty (instead of 100%)
- After notice, before determination: 25% penalty (instead of 100%)
- After determination: 50% penalty (instead of 100%)
Amnesty Schemes
Government occasionally announces amnesty schemes waiving late fees. Stay updated via GST portal notifications.
⚠️ Best Practice
Set calendar reminders 5 days before return due dates. File even nil returns on time. Prevention is better than paying penalties!
Criminal Prosecution
Serious offenses can lead to imprisonment:
| Tax Amount | Punishment |
|---|---|
| ₹1-5 Crore evasion | Up to 5 years + fine |
| > ₹5 Crore evasion | Up to 5 years + fine (compoundable) |
How to Avoid Penalties
- File on time: Set reminders for 11th (GSTR-1) and 20th (GSTR-3B)
- Pay tax on time: Ensure sufficient cash/ITC balance before due date
- Maintain records: Keep all invoices, bills for 6 years
- Reconcile regularly: Match GSTR-2B with books monthly
- Verify invoices: Check customer GSTIN before issuing invoice
- Generate e-way bills: For all movements >₹50,000
- Respond to notices: Don't ignore GST department communications
Frequently Asked Questions
Can I file return after paying penalty?
Yes. Pay penalty first, then file return. Penalty is automatically calculated when you file late.
Is there any time limit to pay penalty?
Pay immediately after filing late return. Delaying penalty payment attracts further interest.
Can penalty be paid using ITC?
No. Penalty and late fees must be paid in CASH only. Cannot use ITC balance.
What if I disagree with the penalty?
File appeal before appellate authority within 3 months of penalty order. Deposit 10% of disputed penalty amount.