Illustrated guide to late fee on delayed filing of GST Returns

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 in respect to late fee in delayed filing of GSTR-1 and GSTR-3B returns has been granted vide recent twin Notifications No. 53/2020- Central Tax and 52/2020- Central Tax both dated 24.06.2020. These Notifications are discussed as under:

1. Notification No 53/2020- Central Tax dated 24.06.2020

Seeks to provide relief by waiver of late fee for delay in furnishing outward statement in FORM GSTR-1 for tax periods for months from March, 2020 to June, 2020 for monthly filers and for quarters from January, 2020 to June, 2020 for quarterly filers

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.

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 52/2020- Central Tax dated 24.06.2020

Seeks to provide one time amnesty by lowering/waiving of late fees for non furnishing of FORM GSTR-3B from July, 2017 to January, 2020 and also seeks to provide relief by conditional waiver of late fee for delay in furnishing returns in FORM GSTR-3B for tax periods of February, 2020 to July, 2020.

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:

Notes: 

1.In case GSTR-3B is not filed by above dates, full late fee for the delayed period from the due date shall be payable.

2.Due date for filing of GSTR-3B for tax payers having aggregate turnover upto Rs 5 Cr has been extended to 01.10.2020 and 03.10.2020 for Group A and B States respectively vide Notification No. 54/2020-Central tax dated 24.06.2020. Thus late fee shall apply thereafter.

*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.

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 such return on 25.06.2020 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 97 days viz 20.03.2020 (due date) to 25.06.2020 (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 4850/- would be payable. Thus a delay of two days has proven costly.

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.

In our view this is a golden opportunity for tax payers to make their slate clear by filing all the pending GST returns but such dates. Any further lethargy in this regard would prove very costly.

***

A BIG THANKS to you for visiting our site and reading this article. Kindly provide your feedback on the above article in comment section below. Also please intimate about other GST issues on which you would require our team to pen down articles.

Doubts on GST may be lodged on ‘Ask GST query tab‘ under ‘Your GST queries’ tab on home page. National level GST experts will provide their reply on the matter raised at the earliest and same can be seen under ‘GST query resolved’ tab under ‘Your GST queries’ tab.

You can also subscribe to our free newsletter to always be updated on GST Law by filling the subscription form at home page.

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.