Lately, a lot of confusion has been seen regarding the ‘late fee waiver’ that was earlier notified by the CBIC for filing of GSTR-3B. A further simplification has been issued by the Government in this regard.

What were the notifications in regard to late fee waiver?

In the earlier Notification No. 52/2020-Central Tax dated 24th June 2020, it was sought to provide relief to the taxpayers by a conditional waiver of late fee for any delay in furnishing returns in Form GSTR-3B for the tax periods ranging between July 2017 to January 2020.

In addition to this, on account of delayed furnishing of Form GSTR-3B returns pertaining to the periods between February 2020 to April 2020, relief from the late fee was accorded to the taxpayers during the lockdown. This was made effective through Notification No. 51/2020-Central Tax dated 24th June 2020, Notification No. 52/2020-Central Tax dated 24th June 2020, and Circular No. 141/11/2020-GST dated 24th June 2020.

The taxpayers can take a sigh of relief since a major compliance waiver to the GST taxpayers has been notified, owing to Covid-19 pandemic.

Now, the Government has made further amendments in the earlier notifications by putting forth Notification No. 57/2020–Central Tax dated 30th June 2020. Here, it has been provided to waive/reduce late fees on the filing of GSTR 3B returns for the periods ranging from May 2020 to July 2020. This particular relief has been provided for all class of normal taxpayers (i.e., turnover below 5 Crores and above Rs 5 Crores). However, to avail this benefit, one has to file returns for May – July 2020 earliest by 30th September 2020.

Thus, effectively, with the introduction of this notification, late fees have been reduced/ waived for filing of GSTR-3B returns from July 2017 to July 2020.

What is the late fee waiver?

The GST department has put across a decision to cap the maximum late fee for the filing of Form GSTR-3B at Rs. 500/- (five hundred only) per return so as to clear up the past pendency of GST returns right from the time of GST implementation. However, this late fee waiver can be availed by the taxpayers subject to the pre-condition that such GSTR-3B returns are being filed prior to 30th September 2020.

The maximum late fees of Rs. 250 each under CGST and SGST/UTGST will be applicable per return period.

With this relief, the government is pushing the GST taxpayers to be compliant with the law and at the same time being considerate by providing a late fee waiver which is restricted to only a nominal amount.

The late fee waiver is applicable to returns pertaining to which period?

Several representations were declared by CBIC to accord relief in the late fee charged for GST returns for the tax periods ranging from May 2020 to July 2020. This was in addition to the earlier provided relief for the tax periods of February 2020 to April 2020 and relief which was given for cleaning up past pendency of returns from July 2017 to January 2020.

It has been clarified that the reduced late fees for Form GSTR-3B under the maximum cap of Rs. 500/- per return has been notified for the tax periods ranging between July 2017 to July 2020 subject to the pre-condition that such GSTR-3B returns must be filed before 30th September 2020.

The tables below summarise the notifications issued in this regard:

Table 1

Notification No. 52/2020-Central Tax dated 24th June 2020
Category of taxpayers Tax Period Conditional Due Date Maximum Late Fees
Aggregate turnover is greater than Rs. 5 crores in preceding FY February 2020, March 2020 & April 2020 June 24, 2020 Nil
AT is < or = Rs. 5 crores in preceding FY + Principal place as specified in A* February 2020 June 30, 2020 Nil
AT is < or = Rs. 5 crores in preceding FY + Principal place as specified in A* March 2020 July 3, 2020 Nil
AT is < or = Rs. 5 crores in preceding FY + Principal place as specified in A* April 2020 July 6, 2020 Nil
AT is < or = Rs. 5 crores in preceding FY + Principal place as specified in A* May 2020 September 12, 2020 Nil
AT is < or = Rs. 5 crores in preceding FY + Principal place as specified in A* June 2020 September 23, 2020 Nil
AT is < or = Rs. 5 crores in preceding FY + Principal place as specified in A* July 2020 September 27, 2020 Nil
AT is < or = Rs. 5 crores in preceding FY + Principal place as specified in B** February 2020 June 30, 2020 Nil
AT is < or = Rs. 5 crores in preceding FY + Principal place as specified in B** March 2020 July 5, 2020 Nil
AT is < or = Rs. 5 crores in preceding FY + Principal place as specified in B** April 2020 July 9, 2020 Nil
AT is < or = Rs. 5 crores in preceding FY + Principal place as specified in B** May 2020 September 15, 2020 Nil
AT is < or = Rs. 5 crores in preceding FY + Principal place as specified in B** June 2020 September 25, 2020 Nil
AT is < or = Rs. 5 crores in preceding FY + Principal place as specified in B** July 2020 September 29, 2020 Nil
If GST is payable irrespective of AT July 2017 to January 2020 July 1, 2020, to September 30, 2020 Rs. 500 per return
If GST is not payable irrespective of AT July 2017 to January 2020 July 1, 2020, to September 30, 2020 Nil

AT stands for aggregate turnover.

A* = Principal place of business is in the States of Chhattisgarh, Madhya Pradesh, Gujarat, Maharashtra, Karnataka, Goa, Kerala, Tamil Nadu, Telangana or Andhra Pradesh or the Union territories of Daman and Diu and Dadra and Nagar Haveli, Puducherry, Andaman and Nicobar Islands and Lakshadweep

B** = Principal place of business is in the States of Himachal Pradesh, Punjab, Uttarakhand, Haryana, Rajasthan, Uttar Pradesh, Bihar, Sikkim, Arunachal Pradesh, Nagaland, Manipur, Mizoram, Tripura, Meghalaya, Assam, West Bengal, Jharkhand or Odisha or the Union territories of Jammu and Kashmir, Ladakh, Chandigarh and Delhi

Table 2

Notification No. 57/2020–Central Tax dated 30th June 2020
Category of taxpayers Tax Period Conditional Due Date Maximum Late Fees
If the return is not filed by a specified date as above (in table 1) and having a tax liability As above in table 1 Filed on or before September 30, 2020 Rs. 500 per return
If the return is not filed by a specified date as above (in table 1) and not having a tax liability As above in table 1 Filed on or before September 30, 2020 Nil
Aggregate turnover is greater than Rs. 5 crores in preceding FY and having a tax liability May 2020 to July 2020 Filed on or before September 30, 2020 Rs. 500 per return
Aggregate turnover is greater than Rs. 5 crores in the preceding FY and not having a tax liability May 2020 to July 2020 Filed on or before September 30, 2020 Nil

What is the amount of late fees to be payable for late filing of GSTR-3B where there is nil tax liability?

The Central Board of Indirect Taxes and Customs (CBIC) has prescribed that there shall be nil late fees for delay in filing of GSTR-3B in cases where there is no tax liability of a GST taxpayer under the said return. In cases where there is any tax liability, a maximum late fee of Rs. 500/- (five hundred only) per return would be applicable to such GSTR-3B returns filed up to September 30, 2020.

Thus, it has been announced that there will be zero late fees for those taxpayers with no tax liability.

What would be the situation for taxpayers whose GST registrations stand cancelled due to non-filing of GST returns?

Those taxpayers whose GST registrations have been cancelled by the department due to non-filing of returns, now have an option to apply for revocation of cancellation of their GST registrations and, thereafter file their pending GSTR-3B returns by 30th September 2020.

As a matter of fact, in the 40th GST council meeting, an opportunity has been provided to taxpayers for filing of an application for revocation of cancellation of GST registration up to 30th September 2020, in all the cases where registrations have been cancelled till the date of 12th June 2020.

What are the likely repercussions of the late fee waiver?

This major relief as has been brought by the CBIC in the form of a uniform (minimal) late fee is simpler in design and easier to implement on the automated common portal.

Most taxpayers assert that the return defaulters of GSTR-3B who have not filed any of their returns from the period July 2017 to July 2020 can now take advantage of this relief by filing their GSTR-3B returns.

Although this late fee waiver is addressed as a welcome step by the defaulting taxpayers, a sense of disappointment seems to prevail amongst those taxpayers who have already paid late fees on submitting their GSTR-3B returns for the past periods. Such taxpayers seek clarification from the Government.

As of now, there is no clarification given by the department as to whether any refund will be initiated to those taxpayers who have already paid a huge amount of late fee in the process of filing GSTR-3B returns.

The latest notification of late fee waiver, i.e., Notification No. 57/2020–Central Tax can be accessed from:

https://taxguru.in/goods-and-service-tax/gstr-3b-late-fees-restricted-rs-500-return-filed-till-30-09-2020.html

Takeaway

In a big relief to GST taxpayers, the Central Government has capped the maximum late fee in respect of monthly filing of GSTR-3B returns at Rs. 500 per return (for returns pertaining to the periods from July 2017 to July 2020. This initiative by CBIC seeks to have a dual benefit from the perspective of the government, i.e., to clear the backlog of un-filed returns and to impart some working capital relief to the taxpayers as well.

RSS feed:

The GST department has put across a decision to cap the maximum late fee for the filing of Form GSTR-3B at Rs. 500/- (five hundred only) per return so as to clear up the past pendency of GST returns right from the time of GST implementation.

However, this late fee waiver can be availed by the taxpayers subject to the pre-condition that such GSTR-3B returns are being filed prior to 30th September 2020.

The maximum late fees of Rs. 250 each under CGST and SGST/UTGST will be applicable per return period.

Also, there shall be nil late fees for delay in filing of GSTR-3B in cases where there is no tax liability of a GST taxpayer under the said return. Thus, it has been announced that there will be zero late fees for those taxpayers with no tax liability.

Know more about it in our blog.

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