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In terms of Rule 61 of the CGST Rules, every registered person other than ISD shall furnish a return in FORM GSTR-3B, electronically on or before the twentieth day of the month succeeding such month.
In many States, the GST Authorities are levying penalty of Rs. 50,000/- under Section 125 even for the delay of one day in filing GSTR-3B.
Comments of the experts on this issue.
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Does the penalty amount under Section 125 and Section 47[1] clash each other culminating in double penalty for the same offence?
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Dear Sir,
.'Late fee' and 'penalty' both are different concepts.
Dear Srji
Considering your simple and strong reply distinguishing the inherent concept between “late fee and “penalty”, levy of penalty under Section 125 for late filing of GSTR-3B is justifiable by the authorities.
Thus the taxpayers have to be diligent to comply the statutory time limit to avoid such heavy penalty.
Shri Sadanand Bulbuleji,
In my considered view, there is a clear distinction between late fees and penalty under the GST regime. The late fee for delayed filing of returns is specifically prescribed under Section 47 of the CGST Act, 2017. Therefore, invocation of Section 125 for the same cause appears to be contrary to the legislative intent and may be considered ultra vires the statute.
Section 125 is a residual provision empowering the imposition of a general penalty where no express penalty is provided for a contravention. It is pertinent to note that late fee is a distinct statutory charge with a fixed quantum, while penalty implies an element of discretion and gravity of the offence. Hence, applying Section 125 in instances where late fees are already stipulated under Section 47 may not be legally tenable.
Furthermore, Section 125 uses the expression “any person,” which in my opinion, is meant to cover individuals or entities not registered under GST despite crossing the prescribed threshold. For instance, during an investigation or search, if an unregistered person is found conducting taxable business beyond the threshold, a penalty under Section 125 may be justifiably invoked for non-compliance.
Additionally, from a jurisprudential standpoint, multiple penalties for the same offence are not sustainable unless expressly mandated by the statute. Imposing both late fees and penalty for the same lapse would, therefore, not only be duplicative but also contrary to the principle of natural justice.
I welcome insights from fellow professionals to validate or correct my understanding, if necessary.
Thanks
Dear Jani Sir
While welcoming your thoughts, I respectfully differ on the issue of application of Section 125 to unregistered persons alone. It can be applied even for the registered persons for technical and unintentional omissions without an element of tax evasion. In my cases, I have got huge penalty levied under Section 129 reduced to nominal penalty under Section 125 after convincing the bonafide transactions to the State Commissioner. In fact, penalty under Section 125 is generic in nature. However the officer should be prudent enough to apply it in genuine cases without mechanically resorting to drastic and unbearable penalties.
Shri Sadanand Bulbuleji Sir,
Thank you for your valuable insight. I do agree with your view that the term “any person” under the CGST Act encompasses both registered and unregistered persons.
My intent was to point out the inconsistent usage of the terms “registered person” and “any person” across various sections of the Act. This distinction seems deliberate, but I am still trying to fully understand the rationale behind it. It appears that where the law intends to specifically impose obligations or liabilities on entities holding a GST registration, it uses the term “registered person.” In contrast, “any person” may have been used in a broader context to include individuals such as Directors, Partners, or Proprietors, particularly in scenarios where the firm or company is a legal entity, while these individuals are natural persons.
One possible interpretation is that the use of “any person” is meant to expand the scope of liability or accountability, especially in cases involving non-compliance, fraud, or concealment, where natural persons behind a legal entity may be held responsible.
That said, I am still exploring this aspect and haven't reached a firm conclusion yet. I would greatly appreciate further insights or interpretations from fellow professionals and legal experts on this nuanced subject.
Thanks with Regards
Dear Jani Sir
I welcome your sincere gesture. It inspires others to sail in the similar boat to widen the horizons of learning and sharing the knowledge selflessly.
Sh.Sadanand Bulbule Ji,
Sir, If we study the legal position in pre-GST era, the late fee for delayed filing of return or non-filing of return and penalty both were being imposed upon the offender separately under Central Excise Rule 12 (6) and Rule 27 respectively. Rule 12 (6) talks of 'an amount'' and contains the word, 'shall'.
The same is the legal position in post GST regime. Rather, it is clearer than the earlier one. Section 47 contains the words, ''late fee" instead of "an amount'' existed in Rule 12 (6) of CE Rules, 2002.
Compare the language of both
RULE 27. General penalty. — A breach of these rules shall, where no other penalty is provided herein or in the Act, be punishable with a penalty which may extend to five thousand rupees and with confiscation of the goods in respect of which the offence is committed.
SECTION 125. General penalty. —Any person, who contravenes any of the provisions of this Act or any rules made thereunder for which no penalty is separately provided for in this Act, shall be liable to a penalty which may extend to twenty-five thousand rupees.
Thus I am of the firm view that in GST regime late fee and penalty both are imposable/leviable upon the offender by the Adjudicating Authority. It is not double/twice punishment for the same offence. Both Sections operate independent of each other.
Disclaimer : These are my personal views.
Dear Sirji
Thank you so much for your comparative legal position to buttress the levy of both late fee under Section 47 and penalty under Section 125 for late filing of GSTR-3B, even for the delay of one day.
Hope this position alerts the taxpayers to promptly file GSTR-3B within the stipulated time to keep away themselves from huge penalty besides late fee as well.
Sh. Sadanand Bulbule Ji,
Sir, I am highly thankful to you for your ratification of my reply.
I had to read old Central Excise Manuals pertaining to pre-2015 period and post-2015 period in order to confirm the intent of legislature on the issue.
For academic information, I wish to reproduce Explanation to Section 49 of the CGST Act:
Explanation.––For the purposes of this section,–
(a) XXXX
(b) the expression,–
(i) “tax dues” means the tax payable under this Act and does not include interest, fee and penalty; and
(ii) “other dues” means interest, penalty, fee or any other amount payable under this Act or the rules made thereunder.
So the amount of late fee levied under Section 47 and penalty levied under Section 125 for belated filing of GSTR-3B falls under the category of "other dues" for the purpose of recovery.
Dear Sir,
Your additional information is in the fitness of things.
Dear Sirji
I have consciously posted the Explanation to Section 49 to remind both taxpayers and tax authorities that, ITC can be used to set off output tax payment including for pre-deposit under Section 107[6] & 112[8]. Some FAAs are still suffering from the hangover that pre-deposit under Section 107[6] should also be paid out of “ Electronic Cash Ledger”. This is absolutely wrong.
In simple words, liability of late fee, interest and penalty falling under “other dues” should be paid out of “Electronic Cash Ledger” only.
The distinction between "late fee" under Section 47 and "penalty" under Section 125 of the CGST Act is legally significant and must be clearly understood. Section 47 specifically provides for a statutory late fee for failure to furnish returns like GSTR-3B within the prescribed time. It prescribes a fixed charge per day of delay, capped to a maximum amount, and operates automatically on occurrence of delay, without the need for any adjudication. In contrast, Section 125 is a general penal provision invoked in cases where no specific penalty is prescribed for contravention of provisions under the Act or Rules. It involves discretion, subjectivity, and usually follows a process involving issuance of notice, opportunity of hearing, and adjudication. Hence, both provisions serve different purposes and are not duplicative or overlapping.
In practice, authorities in some States have been levying penalties under Section 125 even for a one-day delay in GSTR-3B filing, over and above the statutory late fee under Section 47. While legally both can coexist, it is important that the invocation of Section 125 is exercised judiciously. The principle laid down in several decisions, including that of the A.P. High Court, emphasizes that a penalty cannot be levied arbitrarily or without observing the principles of natural justice. The intent of the legislature, as evident from the language of Section 125 and the jurisprudence carried forward from the Central Excise regime, is that such general penalties are applicable only when there is a clear breach not addressed by a specific provision, and not merely as an additional charge for the same default.
Moreover, the Explanation to Section 49 of the CGST Act further clarifies that late fee, interest, and penalty fall under the category of "other dues" and are distinct from "tax dues." This means that while ITC can be used to pay tax dues, "other dues" like late fees and penalties must necessarily be discharged through the Electronic Cash Ledger. This understanding becomes even more critical when dealing with pre-deposit under appeal provisions under Section 107 (6) and Section 112(8), where some officers continue to mistakenly demand cash payment. The statute, however, makes it clear that ITC can be used for tax but not for penalties or late fees. Hence, clarity on these distinctions is essential to prevent misuse of provisions and to ensure fair compliance.
I am highly grateful to both experts, Sh.Sadanand Bulbule, Sir and M/s. Yagay And Sun, Sirs for making the meaning and message of all the terms crystal clear.
Dear Experts,
I seek your valuable insights to help bring clarity and finality to my understanding on the following issues related to return filing, late fees, and penalty under the CGST Act, 2017:
GSTR-3B is to be furnished in accordance with Section 39, read with Rule 61 of the CGST Rules. Where there is a delay in furnishing the return, the statute provides an express provision for the imposition of late fees under Section 47.
My query is: Once the return is furnished along with payment of late fees, can it be said that the requirement of Section 39 has been complied with?
Can a return filed after the due date—but with the applicable late fee under Section 47 paid—be regarded as a valid return under the Act? Is there any legal deficiency in such a return that would justify further penal action?
When the law clearly lays down specific consequences (i.e., late fee) for delay in filing returns, can a proper officer still invoke general penalty provisions such as Section 125 for the same act of delay? Would such an action be considered redundant or inconsistent with the scheme of the Act?
If the taxpayer furnishes the return along with the statutorily prescribed late fee, how can this act still be construed as a contravention of the Act or Rules? Further, which specific provision of the CGST Act or Rules would be considered as having been contravened in such a case?
I believe these points warrant a thoughtful analysis, especially from the standpoint of avoiding double jeopardy—imposing both late fees and penalty for the same lapse.
I look forward to your expert opinions and interpretations to help strengthen the understanding on this matter.
Thanking you in advance.
With warm regards,
My post at Sl.No.13 is in line with the following judgement on payment of tax dues including pre-deposit out of ITC ledger:
2025 (5) TMI 1614 - SC ORDER UNION OF INDIA & ANR. VERSUS M/S YASHO INDUSTRIES LTD
Mandate of pre-deposit - Challenge to impugned Letter, directing payment through Electronic Cash Ledger, insofar as it has been issued arbitrarily and in violation of Article 14 of the Constitution - compliance with Section 107(6)(b) of the CGST Act using the Electronic Credit Ledger.
HELD THAT:- It is brought to the notice before the Court that the Rule 96(10) of the CGST has been deleted in the year 2024.
We find that the impugned order passed by the High Court [2024 (10) TMI 1608 - GUJARAT HIGH COURT] would not call for any interference. Hence, the Special Leave Petition is dismissed.
No.- SLP(C) No. 14841 / 2025 Diary No(s). 17547/2025
Dated.- May 19, 2025
Fee / fine are monetary punishment and therefore penal in nature. The default of delayed filing is regularized by paying prescribed late fee. In fact, filing return along with late fee does not amount of violation, rather is in compliance with the prescribed procedure. In the case of TVL. JAINSONS CASTORS & INDUSTRIAL PRODUCTS, REP. BY ITS AUTHORIZED REPRESENTATIVES, K.V. SRINIVASAMURTHY VERSUS THE ASSISTANT COMMISSIONER (ST), CHENNAI [2025 (2) TMI 1000 - MADRAS HIGH COURT] the court held that general penalty is not applicable in case late fee is paid.
Sh.Shyam Naik Ji,
Very useful judgement in favour of tax payers. Thank you for posting here.
Dear all
I welcome the relevant judgement quoted by Sri. Shyam Naik ji. My thanks to him.
However with due respect to it, what I understand is the said judgement remains silent about the distinction between the concept of late fee under Section 47 and penalty under Section 125. It says once the late fee is paid under Section 47, again the levy of general penalty of Rs. 50,000/- under Section 125 is not correct. This ruling would have been more powerful had there been sufficient reasons to reach out to that conclusion. Anyway everyone must respect the judicial rulings. Surprisingly many officers are still levying both late fee and general penalty as well.
In the present discussion, critical efforts are made to reveal the distinction between these two segments. My this post is for academic purpose only to know the clear intent of the legislation on these concepts.
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