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-4 / GSTR-10, 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).
There have been several Notifications issued in past in regard to waiver / reduction of late fee applicable on delayed filing of GST returns and in this seriatim two fresh GST Notifications have been issued viz Notification No. 67/2020 – Central Tax and Notification No. 68/2020 – Central Tax both dated 21.09.2020.
Lets deliberate on the waiver / reduction of late fee which has been granted by aforesaid Notifications.
Waiver / reduction of late fee in late filing of Form GSTR-4 by composition tax payers
Form GSTR-4 is an Annual GST Return that has to be filed by all registered taxpayers who have opted for composition scheme. Further earlier the CBIC had extended the due date of filing of GSTR-4 for FY 2019-20 to August,31, 2020 and if the tax payer had filed GSTR-4 by said date no late fee would have been payable.
However it appears that some composition tax payers were not able to file their GSTR-4 for 2019-20, by above date and they would have been subject to heavy late fee ( Rs 10,000/-) as same would have been levied from the original due date which was 30.04.2020.
Considering the above, CBIC vide Notification No. 67/2020 – Central Tax dated September 21, 2020, has waived the late fees payable u/s 47 of the CGST Act, in excess of Rs. 250/- for CGST (considering similar notification under SGST Acts total late fee in excess of Rs 500/- will be waived) for the registered taxpayers having liability and fully waived for NIL taxpayers in Form GSTR-4 for the quarters from July, 2017 to March, 2020, if the return is filed between September 22, 2020 to October 31, 2020.
It is important to note here is that above waiver is applicable since July, 2017 and accordingly if a composition supplier has not filed GSTR-4 since inception, he can file GSTR-4 for all the three years now viz FY 2017-18, 2018-19 and 2019-20 by paying a total late fee of only Rs 1500/- (Rs 500 for each return (Rs 250 for CGST + Rs 250 for SGST) instead of Rs 30,000/- which would have been payable in absence of instant Notification. In case all the three years return are NIL return no late fee needs to be paid.
Reduction of late fee in late filing of Form GSTR-10
As per Section 45 of the CGST Act, 2017 read with Rule 81 of the CGST Rules, 2017 every registered person required to furnish return under Section 39(1) (i.e. every registered person other than ISD, Non resident taxable person, composition supplier, Tax deductor or tax collector) and whose registration has been cancelled shall furnish a final return within three months of the date of cancellation or date of order of cancellation, whichever is later, in FORM GSTR-10.
CBIC vide Notification No. 68/2020 – Central Tax dated September 21, 2020, has now waived the Late fee payable u/s 47 of the CGST Act which is in excess of Rs 250/-, (considering similar notification under SGST Acts total late fee in excess of Rs 500/- will be waived) for the registered persons who fail to furnish the return in FORM GSTR-10 by the due date but furnishes the said return between the period from September 22, 2020 to December 31, 2020.
Due to above Notification, a person whose registration has been cancelled and who has not yet filed GSTR-10 can file it by paying a reduced late fee of Rs 500/- (Rs 250 for CGST + Rs 250 for SGST) instead of amount upto Rs 10,000/- (Rs 200/- per day) which would have been payable in absence of instant Notification.
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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.
