What is the penalty under Section 73 of GST Act?

What is the penalty for late payment of GST?

A late filing penalty of $50 if you're on the payment basis and $250 if you're on the invoice or hybrid basis. For late payments, a penalty charge of 1% of the GST amount owed.

How to calculate GST penalty?

This penalty is divided into Rs. 25 per day for both CGST and SGST in instances where there is a tax liability (according to form 3B), and Rs. 20 per day for both CGST and SGST in cases of zero tax liability. However, the total penalty is capped at Rs.

Can GST penalty be waived off?

Yes. However, as per sub-rule (3) of Rule 164, the taxpayer shall be required to pay the full amount of tax demanded in the notice/ statement / order, as the case may be, including on account of demand of erroneous refund, to avail the benefit of waiver of interest or penalty or both under Section 128A.

How to pay penalty under GST?

Login to GST Portal and select the option - Services - Then select - Payment. Select Create Challan and window will be opened showing tax particulars, interest, penalty and fees details. Select Penalty and pay the same according to category - CGST, SGST or IGST. Q.

Is a late payment penalty subject to GST?

Where the late payment penalty is consideration for a financial supply (for example, a supply of an interest in a credit arrangement), there is no need for the supplier to account for GST for that supply. A charge for late payment penalty that is consideration for a financial supply is not an adjustment event.

What happens if interest is not paid on GST?

If you don't file the GST returns, then late fees will apply for every day of default that occurs. Further, if there is any tax due, then interest will apply at the rate of 18% per annum on the tax liability.

How to respond to a section 73 notice?

You can respond to a demand notice u/s 73 of the CGST Act in the following ways:

1. The demand is correct and the payment is pending.
2. The demand is correct and the payment is already done.
3. The demand is not fully correct.
4. The demand is partially correct.

What are the latest updates on section 73?

Effective September 18, 2022, Senate Bill 1340 (Stats. 2022, ch. 425) amends section 73 to extend the new construction exclusion for active solar energy systems from 2023-24 to the 2025-26 fiscal year and changes the repeal date from January 1, 2025, to January 1, 2027.

What is the penalty if you get audited?

If you are audited and found guilty of tax evasion or tax avoidance, you may face a fine of up to $100,000 and be guilty of a felony as provided under Section 7201 of the tax code. A simple mistake in a tax return won't be considered tax evasion.

What is the GST amnesty scheme for Section 73 cases?

The GST Amnesty Scheme offers a great opportunity for taxpayers to settle pending disputes under Section 73 of the GST Act by waiving interest and penalty provided the full tax amount is paid within time period specified above and adhering to all prescribed conditions.

Which DRC is considered as pre-scn intimation?

Where a pre-show cause notice consultation is issued in Form GST DRC-01A, the person can submit a reply, or intimate about his payment in respect of the same, or both in Part-B of Form GST DRC-01A.

What is the highest penalty for GST?

Daily Late Fee: A late fee of ₹50 per day is paid on Central GST (CGST) and State GST (SGST). The cumulative amount of the late fee is ₹100/day of CGST and SGST combined. Maximum Cap: The maximum amount of the late fee is ₹5,000 per type of returns (CGST and SGST).

What happens if you can't pay GST?

Penalties for a late GST return

You'll be charged a penalty for late filing – $50 if you're on the payments basis; $250 if you're on the hybrid or invoice basis. The penalty is due for payment before the 28th of the month after the return was due.

What is the GST penalty amnesty?

The GST Amnesty Scheme under Section 128A grants total waiver of pending interest and penalty amount if the tax dispute amount is paid by an eligible taxpayer on or before March 31, 2025.

What is the time limit for GST 73 notice?

Section 73: Demand Notice for Non-Fraud Cases

This section covers short payment, non-payment, or erroneous refunds without any fraudulent intent. – Time limit to issue notice: 3 years from the due date of filing annual return for the relevant year.

What is the GST penalty waiver 2025?

The GST Amnesty Scheme 2025 is a relief measure aimed at reducing litigation and facilitating compliance. It allows taxpayers to settle disputes by paying the outstanding tax dues while receiving a GST waiver on associated interest and penalties.

How to calculate GST penalty and interest?

Interest Formula:

1. Outstanding GST Liabilities – Unpaid tax amount.
2. Interest Rate – 18% per annum for unpaid GST; 24% for excess ITC claims and output tax liabilities.
3. Days Delayed – Difference between the due date and actual filing date.
4. 365 – Days in a year, used for annualizing the interest.

What triggers a tax penalty?

If you didn't pay enough tax throughout the year, either through withholding or by making estimated tax payments, you may have to pay a penalty for underpayment of estimated tax.

What happens if I don't pay a late fee?

Your balance could increase

Missing a minimum payment or paying late can increase your balance if a late fee is added to the account. Also, you may continue to be charged interest on your unpaid balance until your card issuer receives your payment in full.

How do I check my GST penalty?

Login to the GST Portal with valid credentials. Click the Services > Payments > Challan History option. 2. The list of Challans with the payment status is displayed.