late-fee-reduction-under-gst

Late Fee Reduction under GST

Late Fee Reduction under GST 

For the first time, in the 40th GST Council meeting held on 12th June 2020, the council recommended late fee reduction/ waiver with respect to delay in filing Form GSTR-3B for the earlier period. The relief will help clear the backlog of returns and impart some working capital relief to the taxpayer in current pandemic situation.

Interestingly, after the recommendation, several notifications and press release were done on the matter. The flow of the same, along with the final outcome, is being taken up in the present article.

The flow of notifications and press release done with respect to Form GSTR-3B Late Fee Reduction/ Waiver-

  1. Recommendation done in 40th GST council meeting

The waiver / reduction of late fee, as recommended, for the delay in filing of Form GSTR-3B for the earlier period is tabulated hereunder-

ParticularsTax periodLate fee payable
Cases, wherein, there is no tax liability (i.e., NIL return)July 2017 to January 2020NIL
Any other caseJuly 2017 to January 2020INR 500 per return.
  1. Notification No. 52/2020- Central Tax dated 24th June 2020-

Based on the recommendation of the GST council, the following relief was notified vide notification no. 52/2020-

ParticularsTax periodLate fee payable
Cases, wherein, there is no tax liability (i.e., NIL return)July 2017 to January 2020NIL
Any other caseJuly 2017 to January 2020INR 250 per return.

As per the notification, the above relief is available only if the pending returns in Form GSTR-3B is filed between the period 1st July 2020 to 30th September 2020.

  1. Notification No. 57/2020- Central Tax dated 30th June 2020-

Late fee waiver/ reduction announced vide notification no. 57/2020, in case of the taxpayer having turnover up to INR 5 Crores in the preceding financial year, is-

ParticularsTax periodLate fee payable
Cases, wherein, there is no tax liability (i.e., NIL return)February 2020 to July 2020NIL
Any other caseFebruary 2020 to July 2020INR 250 per return.

Late fee waiver/ reduction, in case the taxpayer having turnover more than INR 5 Crores in the preceding financial year, is-

ParticularsTax periodLate fee payable
Cases, wherein, there is no tax liability (i.e., NIL return)February 2020 to July 2020NIL
Any other caseFebruary 2020 to July 2020INR 250 per return.

In both the above cases, relief is available only if the pending returns in Form GSTR-3B are filed by 30th September 2020.

  1. Press release dated 3rd July 2020-

As per the latest press released by the Central Board of Indirect Taxes and Customs (i.e., CBIC), the maximum late fee payable has now been capped at INR 500 per return.

Final relief

Clubbing up all the above and updating the same with the latest press release in the matter, the late fee waiver/ reduction in case of Form GSTR-3B is as under-

ParticularsTax periodLate fee payable
Cases, wherein, there is no tax liability (i.e., NIL return)July 2017 to July 2020NIL
Any other caseJuly 2017 to July 2020INR 500 per return.

Importantly, the above relief of late fee waiver/ reduction is available only if the pending returns are filed by 30th September 2020.

Post by poonamgandhi

CA Poonam Gandhi is a Chartered Accountant and a Lawyer. With a wide practice experience and deep understanding of different laws and taxes, she has been an independent professional writer in the field of taxation, finance and laws.