Late Fee for Annual Returns

[Kaustubh Karandikar]

During audit by the GST authorities, late fee had been charged for Return GSTR – 9 and GSTR – 9C separately. Is Late Fee applicable for GSTR – 9C also? What is the correct position of law and what should be our defence?

[Padmanathan KV]

Sir,
I am assuming this is for years 2017-18 to 2019-20. During the said period, late fee is applicable only for GSTR-9 and not for GSTR-9C.

Section 47(2) reads as under:

(2) Any registered person who fails to furnish the return required under section 44 by the due date shall be liable to pay a late fee of one hundred rupees for every day during which such failure continues subject to a maximum of an amount calculated at a quarter per cent. of his turnover in the State or Union territory.

The return specified under section 44 is GSTR-9. Therefore, late fee will not apply for GSTR-9C

[Kaustubh Karandikar]

Thanks Mr. Padmanabhan for your kind reply. However, if you read the wordings of Section 44 it says, Every registered person, other than an Input Service Distributor, a person paying tax under section 51 or section 52, a casual taxable person and a non-resident taxable person shall furnish an annual return which may include a self-certified reconciliation statement, reconciling the value of supplies declared in the return furnished for the financial year, with the audited annual financial statement for every financial year electronically, within such time and in such form and in such manner as may be prescribed:. Therefore, it also includes self-certified reconciliation statement which is nothing but Return 9C. Your views please.

[Padmanathan KV]

Sir,

Isnt this wording post amendment by FA 2021? Before Amendment late fee is applicable only for GSTR-9.

even after the amendment in my opinion two views are possible. View A is that late fee is only for "return" and it is independent of "statement". View B is where Turnover exceeds 5 Crores, "return" will be complete only if it is accompanied by "Statement".

[Kaustubh Karandikar]

Mr. Padmanathan, thanks for your quick response and what you said right, prior to amendment of finance act, the wordings was, Every registered person, other than an Input Service Distributor, a person paying tax under section 51 or section 52, a casual taxable person and a non-resident taxable person, shall furnish an annual return for every financial year electronically in such form and manner as may be prescribed on or before the thirty-first day of December following the end of such financial year:. Accodingly, we can take a stand that during the relevant period late fee was not applicable for GSTR - 9C. Thanks for your valuable inputs.

[Amit Agrawal]

Besides other legal arguments, one may use Section 126 to defend itself for non-levy of penalty (or - without prejudice - for requesting penalty of minor amount), specially if Form GSTR-9C (if applicable) got filed subsequently.

These are ex facie views of mine and the same should not be construed as professional advice / suggestion.

[Amit Agrawal]

In my view, late fee is only for delayed filing of return (i.e. Form GSTR-9) (both for pre & past amendment in year 2021).

For non-filing / delayed filing of reconciliation statement (i.e. Form GSTR-9C), there is no late fee prescribed (both for pre & past amendment in year 2021). Of-course, general penalty u/s 125 can be levied for non-filing / delayed filing of reconciliation statement, which is subject to Section 126.

These are ex facie views of mine and the same should not be construed as professional advice / suggestion.

[Kaustubh Karandikar]

Amit Sir, thanks for your kind advice. In my view the amended Section 44 reads as "Every registered person, other than an Input Service Distributor, a person paying tax under section 51 or section 52, a casual taxable person and a non-resident taxable person shall furnish an annual return which may include a self-certified reconciliation statement, reconciling the value of supplies declared in the return furnished for the financial year, with the audited annual financial statement for every financial year electronically, within such time and in such form and in such manner as may be prescribed?. Therefore, it includes self-certified reconciliation statement and hence will be applicable to 9C also. Your kind views please.

[Amit Agrawal]

Dear Shri Kaustubh Karandikar Ji,

Kindly allow me to explain my reasoning behind earlier-shared views:

Sub-rule (3) of rule 80 of the CGST Rules, 2017 reads as follows:

"Every registered person, other than those referred to in the second proviso to section 44, an Input Service Distributor, a person paying tax under section 51 or section 52, a casual taxable person and a non[1]resident taxable person, whose aggregate turnover during a financial year exceeds five crore rupees, shall also furnish a self-certified reconciliation statement as specified under section 44 in FORM GSTR-9C along with the annual return referred to in sub-rule (1), on or before the thirty-first day of December following the end of such financial year, electronically through the common portal either directly or through a Facilitation Centre notified by the Commissioner.]"

while amended Section 44 states about '....an annual return which may include a self-certified reconciliation statement ....', the fact remains that there is no annual return prescribed which includes a self-certified reconciliation statement therein. Above reproduced rule 80 (3) requires furnishing a self-certified reconciliation statement as specified under section 44 in FORM GSTR-9C along with the annual return referred to in sub-rule (1)

And late fee prescribed u/s 47 is for delayed / non-filing of return specified u/s 44. and return specified u/s 44 is only 'Form GSTR-9' (& Not the Form GSTR-9C) as per Rule 80 (1) of the CGST Rules, 2017 and same reads as follows:

"Every registered person, other than those referred to in the second proviso to section 44, an Input Service Distributor, a person paying tax under section 51 or section 52, a casual taxable person and a non-resident taxable person, shall furnish an annual return for every financial year as specified under section 44 electronically in FORM GSTR-9 on or before the thirty-first day of December following the end of such financial year through the common portal either directly or through a Facilitation Centre notified by the Commissioner:

Provided that a person paying tax under section 10 shall furnish the annual return in FORM GSTR-9A."

These are ex facie views of mine and the same should not be construed as professional advice / suggestion. And I respect contrary views.

[Kaustubh Karandikar]

Thanks Amit ji for your detailed counter argument and i am inclined to get convinced on your views.

AI Summary

Late fee applicability for annual GST returns: clarifies treatment of GSTR 9 versus GSTR 9C after amendments.
The core operative issue is whether GST late fee applies to Form GSTR 9C or only to Form GSTR 9. Prior to the 2021 amendment late fee was treated as applicable solely to GSTR 9. Post amendment wording that the annual return "may include a self certified reconciliation statement" produced two views: late fee confined to the statutory "return" (GSTR 9), or late fee extending to GSTR 9C where the reconciliation statement is mandatory and completes the return. Rule provisions prescribing FORM GSTR 9 and requiring GSTR 9C "along with" the annual return support the view that late fee targets GSTR 9, while non filing of GSTR 9C attracts general penalty subject to mitigation.