Date: February 01, 2023

The Chairman,
Central Board of Indirect Taxes & Customs, New Delhi

Respected Sir,

Sub: Request for waiver of late fee and/or penalty for delay in filing Annual Return & Reconciliation Statement u/s 44 of CGST Act, 2017

Today, our Union Finance Minister Smt. Nirmala Sitharaman presented her 5th Union Budget for 2023-24 which is the First Budget in Amrit Kaal.  The Budget is prepared on the envision of a prosperous and inclusive India, in which the fruits of development reach all regions and citizens. I feel proud to quote the 2nd Para of the budget speech.

“2. In the 75th year of our Independence, the world has recognised the Indian economy as a ‘bright star’. Our current year’s economic growth is estimated to be at 7 per cent. It is notable that this is the highest among all the major economies. This is in spite of the massive slowdown globally caused by Covid-19 and a war. The Indian economy is therefore on the right track, and despite a time of challenges, heading towards a bright future.”

In the Finance Bill, 2013 the clause 134 has proposed that a registered person shall not be allowed to furnish an annual return under section 44(1) of the CGST Act, 2017 for a financial year after the expiry of a period of three years from the due date of furnishing the said annual return.

Currently, a registered person is required to file Annual Return in GSTR-9 if his aggregate turnover exceed Rs. 2 Crores and also a self-certified reconciliation statement in GSTR-9C if the aggregate turnover exceed Rs. 5 Crores. The proposed amendment is aimed at bringing discipline in filing annual return as recommended by the GST Council in its 48th Meeting held on 17/12/2022.

In this context, I would like to bring to your notice that GST annual return & reconciliation statement namely GSTR-9 & GSTR-9C are pending for filing by several taxpayers for Financial Year 2017-18 & onwards.  One of the main reasons for non-compliance is the high amount of late filing fees payable under section 47 of the CGST Act, 2017. The late fee payable till today for various financial years in computed in the below table for reference only.  Through this representation, GSTsathi would like to bring to your notice the reasonable cause for such failure and request your goodself to please provide a one-time amnesty scheme by way of waiver of late fees to be levied under section 47 of the CGST Act, 2017

Financial Year Due Date Late Fees Late Fee Payable till 01/02/2023
2017-18 07/02/2020 Rs. 200/- per day, subject to maximum of 0.50% of the turnover 2,18,000/-
2018-19 31/12/2020 1,52,400/-
2019-20 31/03/2021 1,34,400/-
2020-21 28/02/2022 67,600/-

Sir, you are aware that the due date for filing of GSTR 9 & 9C for FY2017-18 was 07/02/2020 and due to out brake of COVID-19 pandemic, many restrictions were imposed from 20/03/2020 and thereafter the whole Country was under complete lockdown leading to closure of shops, business and industry.  There was gradual unlocking but unfortunately the 2nd and 3rd Wave of Covid-19 hit us all and the period of disruption continued till Feb. 2022. As a reason of COVID-19 lockdown the taxpayers were affected severely, financially, emotionally including irreparable loss of family member or friends. Considering the hardship suffered from COVID-19 the Central Government had provided commendable relief by way of waiver of late fees and decreasing interest rate for delayed payments to the taxpayers from time to time in filing of GSTR 3B & GSTR 1. However, no similar relief by way of waiver of late fees for delay in filing of GSTR 9 & 9C was made. It would be pertinent to mention that Hon’ble Supreme Court in its SUO MOTTO Writ Petition (C) No. 3/2020 and followed by Misc. Application No. 29/2022, in its Order dated 10-01-2022 directed that the period from 15.03.2020 till 28.02.2022 shall stand excluded for the purposes of limitation as may be prescribed under any general or special laws in respect of all judicial or quasi-judicial proceedings. Taking into consideration the intention of the apex court, it is earnestly requested to please grant a waiver of late fees u/s 47 and penalty u/s 125 for filing of Annual Return and reconciliation statement in GSTR 9 & 9C for the FY 2017-18 to 2020-21 when the due dates had fallen during the covid period.

Secondly, many taxpayers who failed to file GSTR 9 & 9C for FY 2017-18 before lockdown from 20/03/2020 due the Covid-19 and subsequently found huge late fees charged by portal while attempting to file the same, didn’t filed the return expecting relief due to covid, which never came. Also, many taxpayers failed to file annual return for subsequent years as they got false impression that GSTR 9 & 9C can’t be filed without filing the return for FY2017-18. GST being new law, and technology driven, there was lot of confusion and misconceptions in the minds of taxpayers.

Thirdly, Annual Return in GSTR-9 & GST-9C are only informative returns and mainly serve the purpose of annual compilation of monthly figures disclosed in monthly returns. The tax is collected by the government though monthly return in GSTR-3B. In other words, delay in filing of GSTR 9 & GSTR 9C does not impact the Government Exchequer, except negligible collection through DRC-03 which is any way subject to interest.

Fourthly, the huge late fee indirectly encourages non-compliance because of poor understanding of law on the part of taxpayers. They assume that when taxes are paid in full, why should they pay such huge late fee for merely information return. They also think that late fee is levied for delay in filing of annual return and nothing is payable for non-filing! This may lead to trouble and litigations.

Therefore, in view the above and severe hardship faced by the taxpayers and considering the non-financial implication of GSTR 9 & 9C on Government Exchequer, it is earnestly requested to provide one-time amnesty by waiving-off the late fees under section 47 and penalty under section 125 of the CGST Act on filing of Annual Return and reconciliation statement in GSTR-9 & GSTR-9C for the FY 2017-18 to 2020-21. Alternatively, to discourage non-compliance, flat late fee of say Rs. 10,000 per return may be charged if the returns are filed in the given time window say till 31/03/2023.

I further request your goodself that the late fee should be rationalised and it should be reduced from Rs. 200 per day to Rs. 50 per day as in case of GSTR-1 & GSTR-3B. The maximum late fee should be capped at Rs. 20,000 (as it was in case of delay in filing of service tax returns under Chapter V of Finance Act, 1994) and not at 0.50% of the turnover.

Looking forward for a positive response by way of waiver/reduction of late fee/penalty at the earliest.

Thanking You,

Yours Sincerely,

Adv. Manoj Agarwal, @GSTsathi,
A/8, SDDC Complex, Kachery Road, Rourkela
+91-9937041788, 7978617120

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  1. VIKRAM SAHA says:

    THIS IS IN REFERENCE TO GST 2017-18-19. . . The provision was for waive off late fine for those who submitted the details of GSTR 1 between 19th December 2019 to 10th January 2020 for the period since introduction of GST from July 2017, But we have submitted our GSTR1 in the date span between April 2019 to October 2019. (MUCH BEFORE THE GOVT. GRANT EXTENSION) Then why I be vindicted by GST AUTH for a law which gives grace to the late filers but penalises me for paiying before .

  2. Rithu says:

    Hello Sir,
    2017-18 delay in payment of Tax , we received notice for Sec 50(1)of the KGST act, If this interest amount is mandatory to pay to the Govt

  3. Kaviya says:

    If GSTR 9 for FY 2017-18 has been filed by paying a penalty is the wavie be applicable to those who have filed in FY 2022-23 prior also. will the excess amount be refunded?

  4. Vinayagamoothy says:

    yes I agree with your opinion sir I am working a petrol bunk accountant we fill GSTR 9 but not filling 9c still date 17 to 22 so your mail very useful sir any updates please update sir.

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