Understanding the Penalties for Late GST Online Payment and How to Avoid Them

If you’re a business owner, you’re probably already aware of the Goods and Services Tax (GST) that’s levied on all goods and services in India. With the introduction of GST, paying taxes has become much easier and more streamlined, especially with the option to make GST online payments.

However, it’s important to remember that late GST online payments can result in hefty penalties. In this blog, we’ll help you understand these penalties and provide tips on how to avoid them.

Understanding late GST online payment penalties

Late payment of GST can result in a penalty of 18% per annum, calculated on the unpaid tax from the due date until the payment date. This penalty is calculated daily, so the longer you delay, the more you’ll pay. In addition, if the tax remains unpaid for more than three months from the due date, an additional penalty of 1% per month or a part thereof is also levied, subject to a maximum of 10% of the outstanding tax amount.

For instance, if the due date for paying GST is the 20th of every month and you fail to pay the tax amount by that date, you’ll have to pay an interest of 18% per annum from the 21st onwards until the date of actual payment. If you delay your payment by three months or more, an additional penalty of 1% per month will also be levied, up to 10% of the outstanding tax amount.

Tips to avoid late GST online payment penalties

1. Keep track of due dates

The first and foremost thing you need to do to avoid late payment penalties is to keep track of the due dates for GST payments. Please ensure you know the due dates for filing returns and making payments and mark them on your calendar or set reminders on your phone. This will ensure that you remember the due dates and make timely payments

2. Set up auto-payments

Another way to ensure timely payment of GST is to set up auto-payments. This can be done through your bank account or a GST service provider. With auto-payments, the tax amount will be automatically deducted from your bank account on the due date, ensuring you don’t miss any payments

3. Maintain sufficient balance

Ensure you have an adequate balance in your bank account to cover the GST payment on the due date. If sufficient funds are in your account, the payment may be accepted, and you may be penalized for non-payment. Keeping extra funds in your account is a good way to cover unexpected expenses

4. File returns on time

In addition to paying GST on time, filing your GST returns on time is essential. Late filing of returns can also attract penalties. Please ensure you know the due dates for filing returns and file them on time to avoid penalties

5. Hire a professional

Consider hiring a professional if you need more confidence in independently handling GST payments and returns. A GST consultant or accountant can help you with the entire process, from filing returns to making payments, ensuring that everything is done on time and complies with the regulations

Different modes of payment for GST

In addition to the tips mentioned above, it’s also important to be aware of the different modes of payment available for GST. Here are some of the most common ways to make GST online payments:

1. Internet banking: Most banks offer the option of making GST payments through their Internet banking portal. This is a convenient option as you can make payments from the comfort of your home or office

2. Debit/credit card: You can also make GST payments using your debit or credit card. However, keep in mind that there may be additional charges for using this mode of payment

3. NEFT/RTGS: GST payments can be made through NEFT (National Electronic Funds Transfer) or RTGS (Real Time Gross Settlement). This is a secure and reliable option, but you’ll need to provide the correct account number and IFSC code for the transaction to be successful

4. GST suvidha provider: GST Suvidha Providers (GSPs) are authorized entities that provide GST-related services to taxpayers. You can make GST payments through a GSP, which will handle the entire process on your behalf

5. Mobile apps: Several apps allow you to pay GST using your smartphone. These apps are convenient as you can make payments on the go, but choose a reliable and secure app

It’s important to note that while making GST payments online is convenient, you should also ensure that you make the correct payment. It’s not uncommon for taxpayers to make errors while entering the GSTIN (Goods and Services Tax Identification Number) or the tax amount, which can result in delays or penalties. Always double-check the details before making the payment to avoid any errors.

Paying GST online is a convenient and streamlined way to fulfil your tax obligations. However, it’s essential to ensure that you make timely payments and avoid any penalties. By keeping track of due dates, setting up auto-payments, maintaining sufficient balance, filing returns on time, and choosing the suitable mode of payment, you can ensure that your business stays compliant with GST regulations. With fintech solutions providers, such as EnKash, you can always receive the best solutions. Being a spend management platform, they have expertise in this genre. The team can assist you with the best solutions in no time!

Image Source: Shutterstock