Delayed submission of Reconciliation Statement in GSTR-9C─ Late Fee/Penalty not leviable
Background.─The Deptt. is issuing demand notices for levy of Late Fee & Penalty, where Reconciliation Statement in Form 9C is not submitted along with Annual Return GSTR-9 (submitted by due date) but submitted after the due date.
Such type of Levy of Late Fee & Penalty is Illegal & beyond the permissible framework of GST Act/Rules, as discussed hereunder;
1. Late Fee.─Per S.47(1) & 47(2), GST Act, Late Fee is payable for;
i) Failure to furnish the details of outward or inward supplies required u/s 37 or 38, by due date.
ii) Failure to furnish the Returns required u/s 39 or 45, by due date.
iii) Failure to furnish the Annual Return required u/s 44, by due date in Form GSTR-9, per Rule 80(1), GST Rules, 2017.
2. Reconciliation Statement in Form 9C.─Per Rule 80(2), GST Rules, 2017, a reconciliation statement in Form GSTR-9C, reconciling the value of supplies declared in the return furnished for the financial year with the audited annual financial statement, and such other particulars as may be prescribed, is required to be submitted.
3. Analysis & our Views.─3.1 Reconciliation statement in GSTR-9C is an enclosures to the Annual Return GSTR-9, per S.44(2), GST Act.
3.2 Late Fee─Late Fee is payable for delayed submission of Annual Return required u/s 44, per S.47(2), GST Act. The verbatim text of S.47(2) of the Act is reproduced as under;
“S.47(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.”
3.3 The words used in the section are, “furnishing of Return”.
As per S.2(97), “return” means any return prescribed or otherwise required to be furnished by or under this Act or the rules made thereunder”;
Our views.─The words, “otherwise required to be furnished” have been used in relation to ‘Return’ in the section. These words cannot be made applicable to enclosures of the Return.
The words, “prescribed ” have been defined u/s 2(87) as under;
“prescribed” means prescribed by rules made under this Act on the recommendations of the Council;
Our views.─Rule 80, GST Act does not prescribe ‘Reconciliation Statement in GSTR-9C’ to be a return. “Prescribed” means prescribed by GST rules and not by notfn. The Govt. had competence to issue notfn under delegated piece of legislation does not cover any action not permitted/contrary to the Act[1].
3.4 In case, for any reason, the Reconciliation statement in GSTR-9C was not attached with the Annual Return GSTR- 9, it can very well be submitted after the due date of submission of the Annual Return GSTR-9.
As such, for delayed submission of the Reconciliation statement in GSTR-9C, no Late Fee is payable.
3.5 Penalty.─General penalty.─S.125, GST Act, stipulates levy of penalty for contravention of any provisions of GST Act or any rules made thereunder for which no penalty is separately provided.
Our views.─There is no contravention of any provisions of GST Act/rules for Delayed submission of the Reconciliation statement in Form GSTR-9C. As such no penalty is leviable for delayed submission of the Reconciliation statement in Form GSTR-9C.
Conclusion.─In view of the above analysis, neither ‘Late Fee’ nor ‘Penalty’ is leviable for delayed submission of the Reconciliation statement in Form GSTR-9C.
For further elaboration refer (2022) 38 J.K.Jain’s GST & VR, page R-11 to R-12.
[1]. (2022) 37 J.K.Jain’s GST & VR 397 Munjaal Manishbhai Bhatt & Ors. v. Union of India (Guj)
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