Capping of late fee for late filing of FORM GSTR-7-CGST Notification dated 08.10.2024

On October 8, 2024, the Ministry of Finance, Department of Revenue, issued Notification No. 23/2024-Central Tax, which brings important updates regarding the waiver of late fees for registered taxpayers under the Goods and Services Tax (GST) regime. Specifically, this notification addresses the late fee liabilities for individuals or entities required to deduct tax at source under Section 51 of the Central Goods and Services Tax Act, 2017. The new provisions aim to relieve taxpayers who failed to file their GSTR-7 returns for June 2021 and subsequent months by the due date, reducing the financial burden of late filing. 

Let’s understand the notification!

Notification No. 23/2024 - Central Tax dated  08^th October 2024

MINISTRY OF FINANCE

DEPARTMENT OF REVENUE

Date: 08.10.2024

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Notification No. 23/2024 - Central Tax

S.O. 4374(E).-In exercise of the powers conferred by section 128 of the Central Goods and Services Tax Act, 2017 (12 of 2017) (hereafter in this notification referred to as the said Act), and in supersession of the notification of the Government of India in the Ministry of Finance (Department of Revenue), Central Board of Indirect Taxes and Customs published in the Gazette of India, Extraordinary, Part II, section 3, sub-section (i) vide number G.S.R. 366(E), dated the 1 June, 2021 (No.22/2021-Central Tax), except as respects things done or omitted to be done before such supersession, the Central Government, on the recommendations of the Council, hereby waives the amount of late fee payable under section 47 of the said Act by any registered person, required to deduct tax at source under the provisions of section 51 of the said Act, for failure to furnish the return in FORM GSTR-7 for the month of June, 2021 onwards, by the due date, which is in excess of an amount of twenty-five rupees for every day during which such failure continues:

Provided that the total amount of late fee payable under section 47 of the said Act by such registered person for failure to furnish the return in FORM GSTR-7 for June 2021 onwards, by the due date, shall stand waived which is more than an amount of one thousand rupees:

Provided further that the total amount of late fee payable under section 47 of the said Act by the registered person, who fails to furnish the return in FORM GSTR-7 for a month by the due date, where the total amount of central tax deducted at source in the said month is nil, shall stand waived.

This notification shall come into force on the 1st day of November 2024.

[F. No.CBIC-20006/20/2023-GST]

RAGHAVENDRA PAL SINGH, Director

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Key Highlights of Notification No. 23/2024 - Central Tax

1. Waiver of Late Fees: The notification waives the late fee under Section 47 of the CGST Act for registered persons who are required to deduct tax at source under Section 51, and who failed to file their GSTR-7 return for the period from June 2021 onwards. However, waiver is restricted to the amount in excess of Rs. 25 per day or Rs. 1,000 in total.
2. Limit on Late Fee: The waiver applies to the late fee in excess of ₹25 per day for failure to file the GSTR-7 return. The total late fee amount waived will not exceed ₹1,000. Originally, the late fee for late filing of GSTR 7 was Rs. 100 per day restricted to Rs.5,000 in total.
3. Nil Tax Deduction Cases: If the total central tax deducted at source for the month is nil, the late fee for not filing GSTR-7 will be entirely waived.
4. Effective Date: The provisions of this notification will come into force on November 1, 2024.
5. Supersession of Previous Notification: This notification supersedes Notification No. 22/2021-Central Tax, issued on June 1, 2021, providing updated guidelines for late fee waivers.

These measures aim to provide relief to taxpayers by easing the penalty burden for delayed filings of GSTR-7 returns.

Conclusion

In conclusion, Notification No. 23/2024-Central Tax offers significant relief to registered persons required to deduct tax at source under the GST framework. By waiving the late fees for GSTR-7 filings from June 2021 onwards, the Central Government aims to ease the financial burden on taxpayers who have faced challenges in meeting filing deadlines. The key provisions, including the cap on the late fee amount and the full waiver for cases where no tax was deducted, are expected to encourage timely compliance and reduce penalties. With the notification set to effect from November 1, 2024, taxpayers are advised to take advantage of these waivers and ensure their returns are filed within the stipulated deadlines to avoid further complications. 

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