In the recent past, tweets have been noticed by the Government on the issue of waiver of late fee applicable on non-filing of GSTR 3B returns. The demands are largely for the waiver of late fee for the returns which were required to be filed from the beginning of Goods & Services Tax (GST) i.e. August, 2017.

It may be noted that for helping the small businesses having turnover less than ₹ 5 crore in the current situation arising out of COVID-19, Finance Minister Smt. Nirmala Sitharaman had already announced extension of GST returns of February, March, April and May 2020 till June 2020. No late fee will be charged for this period.

The current requests for waiver of late fee pertain to the old period (August 2017 to January 2020). It may be appreciated that the late fee is imposed to ensure that the taxpayers file return in time and pay taxes on the amount collected from buyers and due to the Government. This is a step to ensure that a certain discipline is maintained regarding compliance. Honest and compliant taxpayers would be discriminated negatively in the absence of such a provision.

In GST, all decisions are taken by the Centre and the State with the approval of the GST Council. It would not be possible or desirable for the Central Government to unilaterally take a view on this issue and therefore, the trade is informed that the issue of late fee would be taken up for discussion in the next GST Council meeting.

Late fee waiver under GST to be considered; change requires multilateral approval and aims to preserve filing discipline. Waiver of late fee for historical non-filing of GSTR-3B returns is under consideration; the fee exists to ensure timely filing and protect compliant taxpayers. Recent pandemic-related late fees were waived for a limited period, but older liabilities are not addressed. Any change to the historical late fee requires multilateral approval and will be placed on the agenda of the GST Council for discussion.