Taxpayers! Furnish GSTR-1 in time, or pay late fees

Arjun (Fictional Character): Krishna, many GST taxpayers are getting notices for liability of late fees for delay in filing of GSTR-1. Why are such notices being issued by the GST department?

Krishna (Fictional Character): Arjuna, the GST department has now started levying late fees for delay in furnishing of GSTR-1. In past, the GST department had reduced the late fees from Rs.200 per day of delay to Rs.50 per day, and Rs 20 per day (For NIL return) & waived the same for the period up to June 2020. But as we are moving forward in the GST system, furnishing of GSTR-1 becomes more important for the system to work smoothly, with less complications. Therefore, the GST department had to take this step of levying late fees, for mandating taxpayers to furnish their GSTR-1 in time.

Arjun (Fictional Character): Krishna, what is the due date within which the taxpayer has to furnish GSTR-1?

Krishna (Fictional Character): Arjuna, the revised due dates w.e.f. 1^st January 2021 for taxpayers having aggregate turnover up to Rs. 1.5 Cr. is the 13^th of the succeeding quarter for those who have opted for quarterly returns. For taxpayers having aggregate turnover above Rs. 1.5 Cr. is the 11^th of the succeeding month for monthly returns.

Arjun (Fictional Character): Krishna, what shall be the consequences of non-furnishing or delayed furnishing of GSTR-1?

Krishna (Fictional Character): Arjuna, the foremost consequence of non-furnishing or delayed furnishing of GSTR-1 is late fees that will be levied by the GST department. Next, if the supplier does not file his GSTR-1, the supplier’s tax liability in GSTR-3B will not be auto-populated, plus the recipient will not be able to avail ITC in his GSTR-3B. Even details in forms GSTR-2A & GSTR-2B will not be reflected if GSTR-1 is not filed. Further, as per the amendments in GST law w.e.f. 01.01.2021, if there are significant deviations/anomalies between details of outward supplies in GSTR-3B & GSTR-1, or inward supplies (ITC) between GSTR-3B & GSTR-2B, which indicates contravention of the act, GST department shall now service a notice to such taxpayer as to why GSTIN should not be canceled.

Arjun (Fictional Character): Krishna, what should the taxpayer learn from this?

Krishna (Fictional Character): Arjuna, it is very well said that- “a stitch in time saves nine”. The same goes with the furnishing of GSTR-1. Furnishing GSTR-1 within the specified due date can save the taxpayer from many further consequences. The GST department has introduced a QRMP scheme for taxpayers having turnover up to Rs. 5 Cr. under which they can file both GSTR-1 and GSTR-3B quarterly while continue making monthly estimated payment of taxes. An Invoice Furnishing Facility (IFF) has also been made available for quarterly filers of GSTR-1 to upload documents of their B2B outward supplies.