Late fees and interest
These are automatic and formulaic rather than discretionary. Late fee accrues per day per return, split between CGST and SGST, and is capped by turnover slab. Interest at 18% runs separately on the tax itself. Nil returns attract the reduced fee but are not exempt.
Demand and recovery
Where tax is short-paid without fraud, a notice is issued and the window to settle with reduced consequences is generous — pay tax and interest before the notice and no penalty applies. Where fraud, wilful misstatement or suppression is alleged, the limitation period is longer and the penalty is the full tax amount.
The appeal ladder
Appeals move up in defined steps, each with its own time limit and pre-deposit.
- Appellate Authority — within 3 months, with 10% of disputed tax pre-deposited
- Appellate Tribunal — within 3 months of that order, with a further pre-deposit
- High Court — on substantial questions of law
- Supreme Court — final appeal
Staying out of it
The overwhelming majority of notices trace back to mismatches — GSTR-1 against 3B, or 3B against 2B — rather than to any intent to evade. Reconciling monthly, from actual invoice records rather than summaries typed from memory, removes most of the exposure before it starts.
Common questions
Is there a penalty if I file late but had no tax to pay?+
Yes — a reduced late fee still applies to nil returns. There is no interest, because there is no unpaid tax, but the fee accrues per day until filed.
Can a penalty be waived?+
For genuine errors, paying the tax and interest before a notice is issued generally avoids penalty altogether. Once a demand is raised, relief narrows and depends on how quickly you settle.
How long do I need to keep GST records?+
Seventy-two months from the due date of the annual return for that year. If an appeal is pending, records must be kept for a year after it is disposed of.