Illustrated Guide to late fee after incorporating the Notification No. 57/2020-Central Tax dated 30th June,2020

As per Section 47(1) of the CGST Act, 2017 and respective State GST Act(s) the late fee for filing of returns , including GSTR-3B is Rs 100/- per day ( each for CGST and SGST) subject to maximum of Rs 5000/-(each for CGST and SGST). Thus total late fee for delay was Rs 200 per day subject to maximum of Rs 10,000/- for each return.

Section 20 of the IGST Act,2017 provides application of certain provisions of the CGST Act, 2017 or rules made thereunder, shall mutatis mutandis apply, so far as may be, in relation to IGST as they apply in relation to central tax as if they are enacted under the IGST Act. However an exception to this is in regard to late fee as Sec 20(viii) of the IGST Act, 2017 clearly excludes late fee from its ambit. Accordingly there is no separate late fee levied under IGST Act, 2017.

However late fee is applicable under UTGST Act, 2017 as per Section 21(ix), as application of late fee has not been excluded therein. Thus we can conclude that late fee shall be applicable under CGST Act and SGST (supply within State) or UTGST (supply within Union Territory).

Reduction in late fee

Since introduction of GST regime there have been several instances when late fee has either been waived or reduced by Government considering requests of tax payers, as per powers conferred in Section 128 of CGST / SGST Act(s).

The per day late fee for filing of GSTR-1 was reduced vide Notification No. 4/2018-Central Tax, dated 23.01.2018 , to Rs 10 per day (each for CGST and SGST Act) for NIL tax return , and others Rs 25 per day (each for CGST and SGST) subject to maximum of Rs 5000/-(each for CGST and SGST).

Subsequently the per day late fee for filing of GSTR-3B was also reduced vide Notification No. 76/2018-Central Tax, dated 31.12.2018 , to Rs 10 per day (each for CGST and SGST Act) for NIL tax return , and others Rs 25 per day (each for CGST and SGST) subject to maximum of Rs 5000/-(each for CGST and SGST).

Thus total late fee for delay in filing of GSTR 1 as well as GSTR 3B was reduced from Rs 200 per day to Rs 20 per day (for NIL return) and Rs 50 per day (for others) by waiving the balance late fee for each return. The maximum limit of late fee of Rs 10,000/- was kept unchanged.

COVID-19 relief in respect of late fee

COVID-19 relief was granted in regard to levy of late on delayed filing of GSTR-1 and GSTR-3B vide Notification No. 53/2020-Central Tax and 52/2020- Central Tax both dated 24.06.2020 by making amendment to Notification No. 4/2018-Central Tax, dated 23.01.2018 and Notification No. 76/2018-Central Tax, dated 31.12.2018 . Further vide Notification No. 57/2020-Central Tax dated 30.06.2020 further amendment has been made in Notification No. 76/2018-Central Tax for reducing the late fee applicable on delayed filing of GSTR-3B for the period February,2020 to July,2020.

Late fee Benefit provided by Notification No. 57/2020-Central Tax dated 30.06.2020.

The following benefits / relief has been provided by the Notification No. 57/2020- Central Tax by insertion of proviso to Notification No. 76/2018-Central Tax dated 31.12.2018.

• For tax payers having turnover above Rs 5 Cr, no late fee benefit was available in regard to GSTR-3B for the months of May,2020 to July,2020 as no waiver due dates in this regard were notified. However vide said Notification it has been mandated that in case GSTR-3B of said months are filed by 30.09.2020, the late fee capping benefit will be available.

• The waiver due dates of filing of GSTR-3B for the months Feb, 2020 to July, 2020, as provided in Notification No 52/2020- Central Tax dated 24.06.2020, if breached had exposed the tax payers to the normal late fee from the due date. However by said Notification it has been prescribed that even if such dates are breached they can still file GSTR-3B of said months by 30.09.2020 and enjoy the late fee capping at zero in case of NIL GSTR-3B and Rs 500/- (Rs 250 X 2) in other cases. Thus we can say that parity has been established in this regard with the tax periods July,2017 to January,2020 wherein also GSTR-3B if filed by 30.09.2020 is eligible to reduced late fee.

• It is important to note that Notification No. 57/2020-Central Tax dated 30.06.2020 is effective from 25.06.2020 which has been fixed considering the earliest waiver due date of 24.06.2020 as mandated under Notification No 52/2020- Central Tax for tax payers having aggregate turnover more than Rs 5 Cr. for the tax periods Feb to April,2020.

The updated position of applicability of late fee on delayed filing of GSTR-1 and GSTR-3B after incorporating the above Notification is given below for ready reference of our readers.

1.  Notification No. 4/2018-Central Tax dated 23.01.2018 as amended vide Notification No 53/2020- Central Tax dated 24.06.2020

Late fee payable shall stand waived for the registered persons who fail to furnish GSTR-1 by the due date, but furnishes it on or before the waiver due dates as given below:

Note: In case GSTR-1 is not filed by above dates, full late fee for the delayed period from the due date shall be payable. No change has been made by Notification No 57/2020- Central Tax in this regard.

Illustration 1: X Ltd filed GSTR-1 for the month of March, 2020 by 10.07.2020. In this case though the due date of filing of GSTR-1 was 11.04.2020 but late fee will not be applicable as same has been filed by the waiver due dates as tabulated above.

However in case he files such return on 12.07.2020 and thus the waiver due dates have been breached and accordingly late fee will e payable for the delayed period. The delayed period in this case would be 92 days viz 11.04.2020 (due date) to 12.07.2020(actual date of filing) . Considering the GSTR-1 was not a NIL one, late fee would be payable @ Rs 50 per day (CGST+SGST) and thus total late fee of Rs 4600/- would be payable. Thus a delay of two days would prove costly.

2. Notification No 76/2018-Central Tax dated 31.12.2018 as amended vide Notification No 52/2020- Central Tax dated 24.06.2020 and Notification No. 57/2020-Central tax dated 30.06.2020.

The following reliefs emanated from above Notifications:

a) Reduced late fee of Rs 500 per GSTR-3B return for months July, 2017 to January,2020

Late fee payable for a tax period, shall stand waived which is in excess of an amount of Rs 250/- i.e. total Rs 500/- (CGST + SGST) for the registered person who failed to furnish GSTR-3B for the months of July, 2017 to January, 2020, by the due date but furnishes it from 01.07.2020 to 30.09.2020.

b) Zero late fee for NIL GSTR-3B return for months July, 2017 to January,2020

Where the total amount of tax payable in GSTR 3B is nil, the total amount of late fee payable for a tax period shall stand waived for the registered person who failed to furnish the return in FORM GSTR-3B for the months of July, 2017 to January, 2020, by the due date but furnishes it from 01.07.2020 to 30.09.2020.

c) Zero late fee if GSTR-3B for periods Feb, 2020 to July, 2020 filed by following waiver deadlines:

d) Reduced late fee if GSTR-3B for periods Feb, 2020 to July, 2020 filed after above waiver deadlines (Table at c) but upto following deadlines (New relief provided by Notification No. 57/2020-Central Tax dated 30.06.2020).

*Reduced late fee means that late fee shall be restricted to NIL in cases of NIL GSTR-3B and shall be capped at Rs 500/- (CGST +SGST) per GSTR-3B in other cases. The quantum is same as earlier prescribed for GSTR-3B for period July, 2017 to January,2020. However in case GSTR-3B is not filed by 30.09.2020 full late fee shall be applicable from the due date.

It is important to note that due dates of filing GSTR-3B for period upto July,2020 has NOT been extended.

**Taxpayers whose principal place of business is in the States of Chhattisgarh, Madhya Pradesh, Gujarat, Maharashtra, Karnataka, Goa, Kerala, Tamil Nadu, Telangana, Andhra Pradesh, the Union territories of Daman and Diu and Dadra and Nagar Haveli, Puducherry, Andaman and Nicobar Islands or Lakshadweep.

***Taxpayers whose principal place of business is in the States of Himachal Pradesh, Punjab, Uttarakhand, Haryana, Rajasthan, Uttar Pradesh, Bihar, Sikkim, Arunachal Pradesh, Nagaland, Manipur, Mizoram, Tripura, Meghalaya, Assam, West Bengal, Jharkhand or Odisha, the Union territories of Jammu and Kashmir, Ladakh, Chandigarh or Delhi.

Lets understand the applicability of late fee for delayed filing of GST-3B with help of illustrations as under:

Illustration 2: X Ltd having turnover exceeding Rs 5 Cr. filed GSTR-3B for the month of Feb, 2020 by 24.06.2020. In this case though the due date of filing of GSTR-3B was 20.03.2020 but late fee will not be applicable as same has been filed by the waiver due dates as tabulated above.

However in case he files GSTR-3B on 01.07.2020 and thus the waiver due dates have been breached. Accordingly late fee will be payable for the delayed period. The delayed period in this case would be 103 days viz 20.03.2020 (due date) to 01.07.2020 (actual date of filing) . Considering the GSTR-3B was not a NIL one, late fee would be payable @ Rs 50 per day (CGST+SGST) and thus total late fee of Rs 5150/- would be payable as per Notification No 52/2020- Central Tax dated 24.06.2020. However in view of Notification No. 57/2020-Central Tax dated 30.06.2020, X Ltd would be required to pay late fee of only Rs 500/- (Rs 250/- for CGST and SGST each), even if he files such GSTR-3B by 30.09.2020.

Illustration 3:Y Ltd has not filed its GSTR-3B returns from July, 2017 to January, 2020. During this period GSTR-3B is NIL except of months of July,2019 and December,2019. Now in this case if Y Ltd furnishes said returns for all the months from 01.07.2020 to 30.09.2020, it will be required to pay late fee as under:

a) Late fee for NIL GSTR-3B returns- July, 17 to Jan, 20 (except July,19 & Dec,19): NIL

b) Late fee for GSTR-3B returns- July, 19 and Dec, 19: Late fee will be capped to Rs 500/- (CGST + SGST) per return and thus total late fee of Rs 1000/- will be required to be paid while filing these returns.

Concluding remarks:

The waiver / reduction in late fee if the GTSR-1 and GSTR-3B returns are filed by waiver due dates is really a breather for the assessees in the breathless times of COVID-19. The most significant benefit is regarding GSTR-3B wherein the late fee will be waived / reduced since inception of GST law viz July, 2017 in case it is filed now by waiver due dates.

The benefit of capping of late fee has further been enhanced for period Feb,2020 to July, 2020 vide Notification No. 57/2020-Central Tax dated 30.06.2020 which shall be applicable in cases where GSTR-3B is not filed by waiver due dates but is filed by 30.09.2020.

An interesting situation that can be visualised is that as Notification No. 57/2020-Central Tax is effective from 25.06.2020 and suppose any taxpayer having turnover exceeding Rs 5 cr deposits full late fee while filing GSTR-3B on say 29.06.2020, after waiver due date viz 24.06.2020. In such cases in our view refund should be granted towards excess late fee paid.

Before parting we can say that this is a golden opportunity for tax payers to make their slate clear by filing all the pending GST returns by prescribed dates. Any further lethargy in this regard would prove very costly.

For ready reference of our readers the Notification No. 57/2020-Central Tax dated 30.06.2020 is given below:

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Frah Saeed

Frah Saeed is a law graduate specializing in the core field of indirect taxes and is the Co-founder of taxwallah.com. She has authored many publications on GST and is into full-time consultancy on GST to big corporates. She as a part of taxwallah.com heads a team comprising of Chartered Accountants and Advocates and plays a key role in our mission to disseminate GST knowledge to all.