GSTR-1 Late Fee Collection Post Expiry of SCN Due Date under Section 73

[PrateekKumar Khemka]

With the due date for issuing SCNs under Section 73 of the CGST Act, 2017 having expired for FY 2018-19 to FY 2020-21, can the department still demand late fees for delayed GSTR-1 filings for these periods?

Key considerations:

1. Limitation Under Section 73 – The prescribed three-year time limit for issuing notices has lapsed. Can a demand for late fees under Section 47 still be enforced beyond this period?
2. Notification No. 74/2019-Central Tax, dated 26.12.2019 – Whether taxpayers who filed GSTR-1 within the extended due date (i.e., before 17.01.2020) can claim shelter under this notification for waiver or non-applicability of late fees?
3. Legal Position & Precedents – Has any CBIC clarification or judicial ruling addressed whether late fees can be demanded after the statutory time limit under Section 73 has expired?

Seeking expert opinion on whether GSTR-1 late fees for FY 2018-19 to FY 2020-21 can still be legally demanded post-expiry of the SCN limitation period and if relief can be claimed under Notification No. 74/2019.

[Deepak Kumar]

1. Late fee is prescribed under Sec 47. Since its a fine, no time limit is required to demand this. Hence both the Section 73 and 74 are irrelevant here. It's a confirmed demand. Department can issue notice.

2. If return is filled in that scheme window, benefits should be extended. Because these waiver notification were issued to motivate the trade to file the return. If return is not filled in that waiver window, department may not consider this notification then. Though it's not fair for those too, who have filled the return belatedly but before this notification.

3. Did not come across so far..still if it is there, will be very helpful.

[KASTURI SETHI]

Late fee is not penalty.Sections 73 and 74 talk of tax, interest and penalty. Both these Sections do not talk of late fee. You are statutorily bound to pay late fee if returns filed late and if not waived by way of Notification/circular etc.

[Shilpi Jain]

Even assuming time limit is not prescribed under the law, the authorities do not have infinite time to demand the late fee. In my view it should be contested. However, in majority of the cases the amount is so small that people don't contest since it involves more cost than the demand itself.

You can take a call accordingly.

[KASTURI SETHI]

Dear Querist,

Have you gone through all the Notifications waiving late fee for delay in in filing GSTR-1 returns?

Notification No. 4/2018-C.T., dated 23-1-2018], 75/2018-C.T. dated 31-12-2018, 74/2019-C.T. dated 26-12-2019, 4/2020-C.T. dated 10-01-2020, 33/2020-C.T. dated 03-04-2020, 53/2020-C.T. dated 24-06-2020, 20/2021-C.T. dated 01-06-2021.

AI Summary

Late fee enforceability in GST filings: authority to demand may persist despite SCN limitation, subject to waiver notifications. Debate centers on whether statutory late fees for delayed GSTR-1 filings remain enforceable after the limitation for issuing show-cause notices has expired. One position treats the late fee as an independent statutory fine not constrained by show-cause notice limitation, permitting continued demands; another notes taxpayers are liable unless waiver notifications apply and that delayed enforcement may be contestable in principle. Waiver notifications protect taxpayers who filed within specified windows, while those outside such windows lack guaranteed relief, and authoritative clarifications or rulings addressing post-limitation late-fee demands are not cited in the discussion.