In this guide
GSTR-1 late fee has become an important GST audit dispute, particularly where taxpayers filed returns late but the GST portal did not collect the corresponding late fee at the time of filing.
The central question is not whether Section 47 imposes late fee for delayed GSTR-1—it clearly does. The real dispute is whether a proper officer can subsequently determine an old GSTR-1 late-fee amount during audit and directly recover it through Sections 78 and 79 when the portal itself did not collect the amount.
The safest legal position in 2026 is that taxpayers should not assume either that every old GSTR-1 late-fee demand is valid or that every such demand is automatically illegal. The recovery route and procedure used by the department matter.
Is Late Fee Legally Payable for Delayed GSTR-1?
Yes.
Section 47(1) of the CGST Act covers delayed furnishing of outward-supply details required under Section 37, which includes GSTR-1.
The reduced effective late-fee structure for GSTR-1 has generally been:
| GSTR-1 situation | CGST + SGST late fee |
|---|---|
| Nil outward supplies | ₹20 per day |
| Other GSTR-1 | ₹50 per day |
| Nil-return maximum | ₹500 |
| AATO up to ₹1.5 crore | ₹2,000 maximum |
| AATO above ₹1.5 crore up to ₹5 crore | ₹5,000 maximum |
| AATO above ₹5 crore | ₹10,000 maximum |
Notification No. 20/2021-Central Tax rationalised the maximum late fee, with corresponding State GST treatment applying alongside CGST.
Therefore, the argument “the portal did not collect it, so no late fee exists in law” is too broad.
Why Did Old GSTR-1 Late-Fee Disputes Arise?
The problem originates partly from the GST system itself.
The GST Council officially recorded in 2021 that, unlike GSTR-3B late fee, there was then no system mechanism—apart from taxpayer self-declaration and payment—to calculate and collect delayed GSTR-1 late fee. The Law Committee proposed that GSTR-1 late fee should subsequently be auto-populated through the return system.
That history explains why audit officers may now identify historical periods where:
- GSTR-1 was filed late;
- Section 47 technically created a late-fee liability; but
- The portal did not collect the amount at the relevant time.
This creates a separate question: how can that historical liability lawfully be determined and recovered?
Can Section 73, 74 or 74A Be Used for GSTR-1 Late Fee?
This is where taxpayers have a meaningful legal argument.
Sections 73 and 74 historically dealt primarily with tax not paid/short paid, erroneous refunds and wrongly availed or utilised ITC, together with consequential interest and penalty.
For later periods, Section 74A performs the corresponding determination function under the amended framework.
A pure Section 47 late fee is therefore different from a short-payment-of-tax demand.
However, taxpayers should avoid the categorical claim that a notice mentioning Section 73 automatically becomes void merely because it also includes late fee. Recent litigation shows courts have dealt with Section 47 late-fee demands within wider adjudication proceedings rather than holding every such proceeding inherently without jurisdiction.
The exact notice, period and statutory basis must be examined.
For GST notice review:
Can the Department Directly Recover GSTR-1 Late Fee Under Section 79?
Section 79 is considerably broader than Sections 73 and 74.
It says that where “any amount payable” to the Government under the Act or Rules remains unpaid, the proper officer may use prescribed recovery modes, including deduction from amounts due, recovery from third parties and other statutory methods.
Because Section 47 itself says the taxpayer “shall pay” late fee, the department can argue that the amount is already statutorily payable.
This makes it unsafe to say that Section 79 can never apply to late fee.
But Section 79 is a recovery provision. It does not necessarily answer the separate question of how a disputed historical late-fee amount was first quantified and crystallised against the taxpayer.
That procedural distinction can become the strongest ground of challenge.
What About Section 78’s Three-Month Rule?
Section 78 states that an amount payable in pursuance of an order passed under the Act ordinarily gets three months from service of that order before recovery proceedings begin, unless the officer records reasons for requiring earlier payment in the interest of revenue.
Therefore, where an officer has passed an adjudication order creating the liability, immediate coercive recovery without considering Section 78 may raise a separate procedural question.
Can DRC-01D Under Rule 142B Be Used for Pure Late Fee?
This is another significant issue.
Rule 142B was introduced for certain amounts recoverable under Section 79. Its operative text refers to an amount of tax or interest becoming recoverable and being intimated through FORM GST DRC-01D.
That gives taxpayers an arguable objection where DRC-01D is used exclusively to recover an old late-fee-only demand.
Interestingly, the DRC-01D format contains columns for tax, interest, penalty, fee and others, while the substantive Rule 142B wording focuses on tax or interest.
This drafting difference is precisely why a blanket answer is risky.
What Have Courts Said?
Recent judgments show why the issue should be challenged case by case.
In Ali Construction, the Calcutta High Court in April 2025 set aside a determination where the authorities had sought to use Section 75(12) to recover interest and late fee without following the appropriate adjudication route after scrutiny. The Court held that Section 75(12) could not be invoked in the circumstances before it.
On the other hand, recent Madras High Court proceedings demonstrate that Section 47 late-fee demands are not being treated as automatically non-existent merely because they were subsequently identified by the department.
So there is no safe basis for telling taxpayers simply to ignore every GSTR-1 late-fee demand.
How Should You Respond to a GSTR-1 Late-Fee Notice?
Before paying or challenging it, verify:
- Exact GSTR-1 filing dates;
- Correct statutory due dates;
- Applicable waiver notifications;
- Correct maximum late-fee cap;
- Whether CGST and SGST amounts are correctly calculated;
- Whether the portal already collected any amount;
- Section under which the officer quantified the liability;
- Whether a proper show-cause opportunity was provided;
- Whether DRC-01D is being used for a pure fee demand; and
- Whether recovery has begun without a legally sustainable demand/order.
For appeals against disputed GST orders:
For legal proceedings and writ-related review:
Frequently Asked Questions
Is GSTR-1 late fee legally payable?
Yes. Section 47 expressly imposes late fee for delayed furnishing of details under Section 37.
If the GST portal did not charge late fee, is it automatically waived?
No. Portal non-collection does not itself amount to a statutory waiver.
Can a GST officer directly recover old GSTR-1 late fee under Section 79?
Section 79 is broadly worded, but whether direct recovery is valid depends on how the liability was determined and the procedure followed. It should be examined case by case.
Can DRC-01D be challenged for late-fee-only recovery?
There is an arguable ground because Rule 142B’s operative language specifically refers to tax or interest, even though the prescribed form contains additional columns.
Should I automatically pay an audit demand for old GSTR-1 late fee?
Not without verifying filing dates, notifications, applicable caps, previous payments and the legal route used for determination and recovery.
Is every GSTR-1 late-fee notice under Section 73 invalid?
No. That is too broad a conclusion. The wording of the notice, nature of the proceeding, period involved and judicial position must all be reviewed before deciding whether to pay, appeal or challenge the demand.
