The Government of India periodically announces relief measures to ease compliance burdens for taxpayers. One such crucial relief is the late fee waiver for not filing the annual return of Goods and Services Tax (GST). This notification is a significant development for businesses and taxpayers who may have missed their filing deadlines due to various reasons. Let’s understand what this notification entails, who benefits from it, and how taxpayers can take advantage of it.
What is the Late Fee Waiver for GST?
The late fee waiver notification for GST is an official directive from the government that temporarily removes or reduces the penalties associated with the delayed filing of the annual GST return. Typically, taxpayers who fail to file their returns within the prescribed deadline incur late fees, which can accumulate significantly over time. The waiver aims to provide relief to businesses facing financial or operational difficulties, helping them to comply without incurring hefty penalties.
Key Highlights of the Notification
Goods and Services Tax (GST) registered taxpayers who failed to file GSTR-9C, which is a reconciliation statement filed along with GSTR-9 annual return, can now file GSTR-9C on or before March 31, 2025, to get a complete waiver of all late fees. This late fee is up to Rs 200 per day for a maximum of 0.5% of turnover. This will now be waived off provided taxpayers file their pending GSTR-9C before the date specified above.
Clarifications given by CBIC about waiver of late fees for filing pending GSTR-9C return on or before March 31, 2025
On January 23, 2025, the Central Board of Indirect Taxes and Customs (CBIC) issued Notification No. 8/2025, addressing the late fees applicable to registered taxpayers who failed to file GSTR-9C along with GSTR-9. For the financial years 2017-18, 2018-19, 2019-20, 2020-21, 2021-22, and 2022-23, if a taxpayer did not submit their GSTR-9C form with their GSTR-9, the late fee for the delay in filing GSTR-9C will be calculated up to the date of its submission, provided that GSTR-9C is filed on or before March 31, 2025. It is important to note that no refunds will be available for any late fees already paid. Failing to file by this deadline will result in continued late fees and potential GST notices.
What is the condition to avail this late fee waiver on pending GSTR-9C?
Not all taxpayers are eligible to get this waiver as it comes with certain conditions.
- On-Time GSTR-9 Filing: If a taxpayer has filed their GSTR-9 on or before the deadline, late fees for GSTR-9C will not be levied for the specified financial years.
- Late GSTR-9 Filing with Fees Paid: If a taxpayer has filed GSTR-9 after the deadline but has already paid the applicable late fees, additional late fees for GSTR-9C will not be imposed separately.
- Handling Show Cause Notices (SCNs): Previously, the GST department issued Show Cause Notices (SCNs) for non-payment of late fees related to delayed GSTR-9C filings.
With this new notification, taxpayers can now respond to these SCNs by requesting the GST proper officer to cancel the notices, thereby stopping any GST demands associated with the late filing.
No separate late fees for filing GSTR-9C other than what levied on GSTR-9
It is clarified that late fee under sub-section (2) of section 47 of the CGST Act, is leviable for the delay in furnishing of complete annual return under section 44 of the CGST Act, i.e. both FORM GSTR-9 and FORM GSTR-9C (where FORM GSTR9C is also required to be furnished) and the late fee shall be payable for the period from the due date of furnishing of the said annual return up to the date of furnishing of the complete annual return i.e. Form GSTR-9 and Form GSTR-9C.
Who Benefits from This Waiver?
- Small and Medium Enterprises (SMEs): SMEs often struggle with compliance due to resource constraints. This waiver helps them avoid excessive penalties.
- Startups: Newly established businesses may find it challenging to meet compliance requirements initially. The waiver offers them a chance to regularize their filings.
- Businesses Facing Financial Hardships: Companies that have faced disruptions due to economic downturns, pandemics, or operational issues can benefit from the waiver.
- Taxpayers with Past Due Filings: Those who have pending annual returns from previous tax periods can clear their backlog without incurring heavy late fees.
Consequences of Not Filing GSTR-9C by March 31, 2025
If a GST-registered person fails to file their GSTR-9C return by the final deadline of March 31, 2025, after having filed their GSTR-1 and GSTR-3B returns with proper reconciliation against GSTR-2A and GSTR-2B, the GST department may take stringent actions. During GST return scrutinies, audits, inspections, or searches, the department may initiate proceedings for any discrepancies found in outward supplies, tax liabilities, and Input Tax Credit (ITC) claims related to purchases under the Reverse Charge Mechanism (RCM).
Conclusion
The GST late fee waiver notification is a welcome relief for taxpayers struggling with compliance issues. It provides a valuable opportunity for businesses to regularize their annual filings without the burden of hefty penalties. Taxpayers should seize this opportunity, ensure timely compliance, and avoid future delays. Keeping track of such notifications and adhering to deadlines will help businesses maintain a smooth tax compliance process and avoid unnecessary financial strain.