Late fee, interest and penalty on deductor for various defaults in TDS - GST Ready Reckoner - GST

Late fee, interest and penalty on deductor for various defaults Fails to furnished TDS return :- If the deductor fails to furnish the return in FORM GSTR-7 [ u/s 39(3) of CGST Act ] by the due date (i.e. within 10 days of the month succeeding the month in which deduction was made) he shall pay a late fee of Rs. 100/- per day under CGST Act SGST/UTGST Act separately during which such failure continues subject to a maximum amount of Rs. 5000/- each under CGST Act SGST/UTGST Act. Example:- Mr S has deducted GST amounting to 50,000/- in the month of Nov 2023 . He filed return on 16.12.2018. how much amount liable to pay as late fee. He is liable to pay a late of 600/- at the rate of 100/- per day for delay of 6 days (11.12.2018 16.12.2018). Maximum amount of late fee payable is capped at 5,000/- Similar late fees is applicable under SGST Act / UTGST Act . Fails to Furnish TDS Certificate :- If any deductor fails to furnish the certificate of TDS deduction to the deductee [i.e. the supplier] within 5 days of crediting the amount so deducted to the Government (i.e. furnishing return in FORM GSTR-7 ), the deductor shall pay a late fee of Rs. 100/- per day under CGST Act SGST/UTGST Act separately from the day after the expiry of five day period until the failure is rectified, subject to a maximum amount of Rs.5000/- each under CGST Act SGST/UTGST Act. Fails to make payment of deducted tax If any deductor fails to deposit the amount deducted or part thereof liable to interest rate @ 18% on his own from the first day when such tax was due to be paid till the date when it is paid. [ Section 50(1) read with Section 51(6) of CGST Act] The determination of the amount in default under this section shall be made in the manner specified in section 73 or section 74 [ or Section 74A. (w.e.f. 01.11.2024 vide N.No. 17/2024 dated 27.09.2024) inserted vide Finance (No. 2) Act, 2024 ] Penalty:- As per section 122(1)(v) of CGST Act Where a taxable person default in; fails to deduct the tax in accordance with the provisions of section 51(1), or deducts an amount which is less than the amount required to be deducted under the said sub-section, or where he fails to pay to the Government under section 51(2) thereof, the amount deducted as tax. he shall be liable to pay penalty of Rs. 10000/- or amount equal to the amount in default, whichever is higher If there is excess or erroneous deduction:- In case of excess or erroneous deduction, the deductor or the deductee, as the case may be shall claim refund in accordance with the provisions of section 54 of CGST Act . However, no refund to deductor shall be granted if the amount deducted has been credited to the electronic cash ledger of the deductee. What will happen if the TDS credit entry is rejected by the deductee. The rejected transactions in TDS/TCS credit receipt table will be communicated back to the deductor who will download the auto-populated transactions and make necessary amendments in GSTIN or amount etc. in table 4 of FORM GSTR-7. The amended details will again be auto-populated in TDS/TCS credit receipt table. Supplier will take action comprising Accept/Reject the transactions. As usual, amount of accepted invoices will be credited to electronic cash ledger of the supplier. Important Notification Circular The Government, on the recommendations of the Council, hereby waives the amount of late fee payable under section 47 of the said Act by any registered person, required to deduct tax at source under the provisions of section 51 of the said Act, for failure to furnish the return in FORM GSTR-7 (i.e. TDS) for the month of June, 2021 onwards. The total amount of late fee payable under section 47 of the said Act by such registered person for failure to furnish the return in FORM GSTR-7 for the month of June, 2021 onwards, by the due date, shall stand waived which is in excess of an amount of one thousand rupees. [ Notification No. 22/2021-Central Tax Dated 01.06.2021 ] [ Superseded vide Notification No. 23/2024 Central Tax dated 08-10-2024 w.e.f. 01.11.2024 ]