Late fee in case of GST Annual returns!

The 55th GST Council meeting has proposed clarifying the provisions related to late fees under the Goods and Services Tax (GST) regime, particularly concerning filing annual returns. The amendment aims to clarify that the late fee under Section 47(2) of the CGST Act, 2017 is applicable for delays in filing the complete annual return, which includes both FORM GSTR-9 (Annual Return) and FORM GSTR-9C (Reconciliation Statement), wherever appropriate.

Let’s understand the changes!

Proposed changes

Clarification regarding the applicability of late fee for delay in furnishing of FORM GSTR-9C and providing a waiver of late fee on delayed furnishing of FORM GSTR-9C for the period from 2017-18 to 2022-23:

To clarify through a circular that the late fee under Section 47(2) of the CGST Act, 2017 is leviable for the delay in filing the complete annual return under Section 44 of the CGST Act, 2017, which includes both FORM GSTR-9 (Annual Return) and FORM GSTR-9C (Reconciliation Statement), where applicable.

For the annual returns pertaining to the period 2017-18 to 2022-23, the GST Council also recommended issuing notification under section 128 of CGST Act, 2017 for waiver of the amount of late fee for delayed filing of FORM GSTR-9C, which is over the amount of late fee payable till the date of filing of FORM GSTR-9 for the said financial years, provided the said FORM GSTR-9C is filed on or before 31^st March 2025.

Key Highlights

1. Clarification on Late Fees:
   • Late fees under Section 47(2) of the CGST Act, 2017, are applicable for delays in filing the complete annual return under Section 44, which includes both FORM GSTR-9 (Annual Return) and FORM GSTR-9C (Reconciliation Statement), where applicable.
2. Waiver of Excess Late Fees:
   • The GST Council has recommended a waiver of late fees exceeding the amount payable for delayed filing of FORM GSTR-9C, provided it is filed by 31st March 2025.
3. Applicability Period:
   • The waiver applies to annual returns for the financial years 2017-18 to 2022-23, ensuring relief for delayed compliance during this period.
4. Deadline:
   • The extended filing timeline up to 31st March 2025 offers a window for taxpayers to regularize past delays without incurring excessive penalties.

Conclusion

The clarification on the levy of late fees under Section 47(2) of the CGST Act, 2017, and the recommended waiver for excess late fees on delayed filing of FORM GSTR-9C provide significant relief to taxpayers. By addressing ambiguities and extending the compliance timeline until 31st March 2025, the GST Council has taken a balanced approach to promote voluntary compliance while minimizing the financial burden on businesses.

This initiative not only reinforces the importance of timely and complete filing of annual returns but also showcases the government’s commitment to fostering a taxpayer-friendly environment under the GST regime. Taxpayers must seize this opportunity to regularize their filings for the financial years 2017-18 to 2022-23, thereby ensuring compliance and avoiding penalties.

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