Applicable provisions in respect of Consequences of not filing GST Annual Return under CGST Act, 2017: Sec 46, Sec 47(2), Sec 2(112), Sec 125 and Sec 149 of Central Goods and Services Act, 2017

Section 46 Notice to return defaulters.-

46. Where a registered person fails to furnish a return under section 39 or section 44 or section 45, a notice shall be issued requiring him to furnish such return within fifteen days in such form and manner as may be prescribed.

Section 47(2) Levy of late fee.-

(2) Any registered person who fails to furnish the return required under section 44 by the due date shall be liable to pay a late fee of one hundred rupees for every day during which such failure continues subject to a maximum of an amount calculated at a quarter per cent. of his turnover in the State or Union territory.

Section 2(112)

(112) “turnover in State” or “turnover in Union territory” means the aggregate value of all taxable supplies (excluding the value of inward supplies on which tax is payable by a person on reverse charge basis) and exempt supplies made within a State or Union territory by a taxable person, exports of goods or services or both and inter-State supplies of goods or services or both made from the State or Union territory by the said taxable person but excludes central tax, State tax, Union territory tax, integrated tax and cess;

Section 125 General Penalty

125. Any person, who contravenes any of the provisions of this Act or any rules made thereunder for which no penalty is separately provided for in this Act, shall be liable to a penalty which may extend to twenty-five thousand rupees.

Section 149 Goods and services tax compliance rating

149. (1) Every registered person may be assigned a goods and services tax compliance rating score by the Government based on his record of compliance with the provisions of this Act.

(2) The goods and services tax compliance rating score may be determined on the basis of such parameters as may be prescribed.

(3) The goods and services tax compliance rating score may be updated at periodic intervals and intimated to the registered person and also placed in the public domain in such manner as may be prescribed.

(Extracted from:

1. CGST Act, 2017

2. CGST Rules, 2017

Analysis:

Non-filing of annual return could have following consequences:

1. Notice u/s 46

2. Late fee u/s 47(2)

3. General Penalty u/s 125

4. Compliance Rating u/s 149

> Notice u/s 46

Where registered tax payer is fails to file the Annual Return (GSTR 9, 9A, 9B as applicable) within the prescribed due date, a notice under section 146 of the CGST Act,2017 will be issued seeking to furnsih the return within 15 days from the date of issue of notice.

Late Fee u/s 47(2)

Some of the registered persons are in a belief that late fee for delay in filing Annual Return could be same as GSTR 3B i.e. Rs. 50 per day (CGST + SGST) subject to a maximum of  Rs.10,000.

BUT, there interpretation is completely wrong, late fee for delay in filing GSTR 3B has been levied under section 47(1).

Whereas late fee for delay in filing Annual Return will be levied under section 47(2),

where act has specifically provided that delay in filing Annual Return could attract late fee of

> Lower of the following:

> 200/-per day (Rs.100 CGST and Rs. 100 SGST) for such failure continues

> 25%calculated on the Turnover in the State or Union Territory

“Now, lets see the definition of the Turnover in a State or UT

Turnover Includes:

✔ supplies in Goods or Services or in both effected within state or outside the state;

✔ Stock Transfer, Barter, Gift in kind, Samples, Exchange of services, etc.;

 Exempted supplies, supplies made in the course of export; and

    Excludes:

✘ taxes leviable under the GST enactments.

Here’s an example to help you understand the late filing levy of 0.25% on Turnover

(Source: Internet)

Mr. A is a farmer with an annual turnover of Rs. 45 lakh. Since this income is agriculture-related, the turnover is exempt from GST. However, Mr. A also supplies plastic bags along with his crop and charges separately for this. His turnover from the sale of plastic bags is Rs. 2 lakh and we know that this transaction (sale of plastic bags) is chargeable to GST. In simple words, his taxable turnover is only Rs. 2 lakh.

Going by the definition of aggregate turnover, late fee of 0.25% shall be calculated on the aggregate turnover of Rs. 47 lakhs (45 lacs + 2 lacs) but not Rs. 2 lakhs.

General Penalty u/s 125

A contravention for which no penalty is separately provided for in this Act, a General Penalty upto Rs. 50,000  (Rs.25,000 CGST + Rs. 25,000 SGST) could be levied under section 125 of CGST Act,2017

> Compliance Rating u/s 149

Apart from the notices, late filing levy and penalty..

GST Act provides compliance rating system which will be placed in the public domain.

Although, at present compliance rating is not in force, but in future when it is implemented past records of compliance with the provisions of this law will be taken into account while evaluating compliance score.

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Author, Article Assistant, Paper Presenter, IPCC by qualification, Researcher by passion, Youtuber. I am B Vinay Reddy, Student of ICAI since 2015. Currently, I’m working as an Article Assistant in Hyderabad, India. With a high positive spirit & loves exploring various things and inter View Full Profile

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