Recovery of Late Fees of GSTR-1, Goods and Services Tax - GST

[Soumya Chattopadhyay]

Sir,

Please guide whether Late Fees under GSTR-1 can be directly recoverable under GST.

Posts / Replies

[KASTURI SETHI]

(i) Late fee has been levied under Section 47 of CGST Act and its recovery is automatic through Common Portal System which has been enabled through Information Technology System.

(ii) The Common Portal System will not allow you to go ahead until and until late is paid except in those case where Govt.has waived late fee.

[Soumya Chattopadhyay]

Thanks for the reply sir.

The system hadn't charged Late fees i.r.o GSTR 1 from 17-18 to 20-21. Only when Section 37(4) was introduced, system started collecting Late fees of GSTR-1 through GSTR-3B. In my case, exemption notifications do not apply either. Also, there is no provision to demand through Section 73/74.

In this situation, What to do ?

[KASTURI SETHI]

Pl. go through all the following notifications :-

GSTR-1 Return — Reduction of late fee in case of delayed filing of FORM GSTR-1

In exercise of the powers conferred by section 128 of the Central Goods and Services Tax Act, 2017 (12 of 2017) (hereafter in this notification referred to as the said Act), the Central Government, on the recommendations of the Council, hereby waives the amount of late fee payable by any registered person for failure to furnish the details of outward supplies for any month/quarter in FORM GSTR-1 by the due date under section 47 of the said Act, which is in excess of an amount of twenty-five rupees for every day during which such failure continues:

Provided that where there are no outward supplies in any month/quarter, the amount of late fee payable by such registered person for failure to furnish the said details by the due date under section 47 of the said Act shall stand waived to the extent which is in excess of an amount of ten rupees for every day during which such failure continues.

[Notification No. 4/2018-C.T., dated 23-1-2018].

Amended by 75/2018-C.T. dated 31-12-2018

Amended by 74/2019-C.T. dated 26-12-2019

Amended by 4/2020-C.T. dated 10-01-2020

Amended by 33/2020-C.T. dated 03-04-2020

Amended by 53/2020-C.T. dated 24-06-2020

Amended by 20/2021-C.T. dated 01-06-2021

[Soumya Chattopadhyay]

Thank you for your reply, sir. Most humbly I would like to point out my issue with regards to the Notifications cited by you.

Notification Number	Relief Given to taxpayer
75/2018 – Central Tax	Amount of late fee payable under section 47 of the said Act shall stand waived for the registered persons who failed to furnish the details of outward supplies in FORM GSTR-1 for the months/quarters from July, 2017 to September, 2018 by the due date but furnishes the said details in FORM GSTR-1 between the period from 22nd December, 2018 to 31st March, 2019.
74/2019 – Central Tax	Amount of late fee payable under section 47 of the said Act shall stand waived for the registered persons who failed to furnish the details of outward supplies in FORM GSTR-1 for the months/quarters from July, 2017 to November, 2019 by the due date but furnishes the said details in FORM GSTR-1 between the period from 19th December, 2019 to 10th January, 2020
04/2020 – Central Tax	Benefit of Notification 74/2019 extended till 17th January, 2020.
33/2020 – Central Tax	Conditional relief in lieu of Covid for the months March, 2020, April, 2020 and May, 2020.
53/2020-Central Tax	Conditional relief of Covid extended.
20/2021-Central Tax	Conditional relief of 2nd wave of Covid.

My case is different from all of this. The RTP filed their GSTR-1 of July, 2017 on August, 2023 and system had allowed this. No late fees were paid in this case by the RTP.

With Regards to the provisions of Sec 73/74, Late fees cannot be demanded either.

Therefore, my question was whether Section 79 can be invoked directly in this case Sir for recovery of highest late fees of Rs. 5000+5000.

[KASTURI SETHI]

Madam,

Section 79 is applicable only if the amount due is admitted by the registered person in GSTR-1 return but has not been paid while filing GSTR-3B return. In other words, Section 79 does not need determination of the amount due. When return is filed late, then the factum of late filing cannot be challenged. It tantamounts to admittance of the offence. The slab rate of 'Late fee' is already levied under Section 47 i.e. fixed/determined. . Thus recovery of late fee can be made under Section 79 direct i.e. without issue of SCN under Section 73 or 78.

Recovery (of the amount due) in Section 79 means an amount determined in a manner known to law- Madras High Court in the case of VN Mehta & Company - 2019 (11) TMI 766 - MADRAS HIGH COURT.

Disclaimer : These are my personal views for education purposes only and not meant for any court proceedings.

[navnath padwal]

there is one confusion in this connection .

for interest on late payment as per section 50 of act, the officer can issue show casue under 73 and rule 142.

section 73 (1) : Where it appears to the proper officer that

any tax has not been paid or short paid or

erroneously refunded, or

where input tax credit has been wrongly availed or utilised

for the reason other than of fraud to evade tax, he shall serve notice .......... requiring him to show cause as to why he should not pay the amount specified in the notice along with interest payable thereon under section 50 and a penalty leviable under the provisions of this Act or the rules made thereunder.

further section 75 (12) OF ACT SAYS

(12) Notwithstanding anything contained in section 73 or section 74, where any amount of self-assessed tax in accordance with a return furnished under section 39 remains unpaid, either wholly or partly, or any amount of interest payable on such tax remains unpaid, the same shall be recovered under the provisions of section 79.

NOW , you will see late fee is not included in 73 nor in section 75(12) of act .

SO , CAN OFFICER ISSUE SHOW CAUSE OR DEMAND NOTICE ASKING LATE FEE ?

[KASTURI SETHI]

In my reply dated 30.11.23 at serial no.5, in the last line of first paragraph, the words, 'Section 73 or 78' is to be read as "Section 73 or 74"..

[KASTURI SETHI]

Sh.Navnath Padwal Ji,

Q..CAN OFFICER ISSUE SHOW CAUSE OR DEMAND NOTICE ASKING LATE FEE ?

Ans. Sections 73, 74 and 75 do not provide for recovery of late fee. Section 47 is meant for recovery of late fee. The words, 'shall pay' mentioned in Section 47(1) & (2) signify that a registered person who delays the filing of GST returns is statutorily bound to pay late fee.The word, 'shall' signify mandatory nature.

(ii) If the registered person avoids to pay late fee by any means, late fee can be recovered from that person under Section 79 without issuance of SCN.

(iii) If Common Portal System demands late fee that is within the purview of the CGST Act inasmuch as Common Portal System has been enforced under Section 146 of CGST Act. Otherwise also the person who does not deposit late fee, shall not be allowed to proceed.

(iv) Late fee is entirely different from fine, penalty and interest. Late fee tantamounts to a penal action but not the amount of penalty.

Disclaimer : These are my personal views for education purposes only and not meant for any court proceedings.