Late fees under Section 47(1) cannot be imposed for delayed GSTR-9C filing as portal lacks payment support

The Kerala HC ruled that late fees under Section 47(1) of CGST/SGST Act cannot be imposed for delayed filing of GSTR-9C returns. The court noted that the GST portal does not support late fee payment for GSTR-9C filings, only for GSTR-9. Following amendments by Finance Act 2021, GSTR-9C became a self-certified reconciliation statement rather than requiring CA/CMA certification. The court found notices demanding late fees for belated GSTR-9C filing unjust and unsustainable, particularly for returns filed before the amnesty scheme commenced on 01.04.2023. However, taxpayers cannot claim refunds of late fees already paid exceeding Rs. 10,000. The writ petitions were allowed with these directions.

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Issues Involved:

1. Applicability of late fee for filing GSTR-9C.
2. Interpretation and applicability of the Amnesty Scheme.
3. Compliance requirements under the amended CGST/SGST Act and Rules.

Issue-wise Detailed Analysis:

1. Applicability of Late Fee for Filing GSTR-9C:

The core issue pertains to whether a late fee is applicable for the belated filing of the GSTR-9C reconciliation statement. The petitioner argued that under Section 47(2) of the CGST/SGST Act, a late fee is leviable only for the late filing of the annual return in FORM GSTR-9, not for the GSTR-9C reconciliation statement. The respondent, however, calculated the late fee based on the date of filing GSTR-9C, treating it as an integral part of the annual return filing process. The court noted that the GST portal does not support the payment of a late fee for late filing of GSTR-9C, indicating that such a fee is not applicable for GSTR-9C. The judgment concluded that notices demanding late fees for GSTR-9C were unjust and unsustainable.

2. Interpretation and Applicability of the Amnesty Scheme:

The petitioner sought relief under the Amnesty Scheme, which waived late fees in excess of Rs. 10,000 for non-filers of GSTR-9 returns for specific financial years. The petitioner had filed the returns before the commencement of the Amnesty Scheme, arguing that they should benefit from the scheme. The respondent contended that the Amnesty Scheme applied only to those who had not filed returns before 01.04.2023. The court observed that the government's notifications under the Amnesty Scheme waived late fees for non-filers, indicating a broader intent to alleviate compliance burdens. The judgment favored the petitioner's interpretation, allowing them the benefits of the Amnesty Scheme.

3. Compliance Requirements under the Amended CGST/SGST Act and Rules:

The judgment examined the compliance requirements under the amended provisions of the CGST/SGST Act and Rules. It highlighted the significant amendments brought by the Finance Act, 2021, effective from 01.08.2021, which included the omission of Section 35(5) and the substitution of Section 44. These amendments altered the filing requirements for GSTR-9C, making it a self-certified reconciliation statement for taxpayers with a turnover exceeding Rs. Five Crores. The court clarified that while Rule 80 mandates GSTR-9C for certain taxpayers, the late fee provisions do not extend to GSTR-9C, reinforcing the judgment's stance against the imposition of late fees for GSTR-9C.

Conclusion:

The judgment allowed the writ petitions, ruling that the notices demanding late fees for the delay in filing GSTR-9C were unjust and unsustainable. The court directed that the petitioners would not be entitled to claim a refund for any late fee already paid over Rs. 10,000, aligning with the Amnesty Scheme's provisions. The decision underscores the importance of correctly interpreting statutory provisions and government notifications to ensure fair compliance burdens on taxpayers.

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