Delayed submission of Reconciliation Statement in GSTR-9C – Late Fee/Penalty not leviable

Goods and Services Tax (GST) is a comprehensive indirect tax levied on the supply of goods and services in India. Every registered taxpayer under GST is required to file an annual return in the form of GSTR-9 and a reconciliation statement in the form of GSTR-9C.

GSTR-9C is a reconciliation statement that reconciles the data declared in GSTR-9 with the audited annual financial statements of the taxpayer. It is mandatory for taxpayers having an annual turnover of more than Rs. 2 crore to file GSTR-9C. The due date for filing GSTR-9C is the same as GSTR-9, i.e., 31st December of the subsequent financial year.

Delay in filing GSTR-9C attracts late fees and penalties. However, the Central Board of Indirect Taxes and Customs (CBIC) has issued a notification on 31st December 2020, stating that late fees and penalties will not be leviable for delayed submission of GSTR-9C for the financial years 2017-18 and 2018-19.

Reasons for Delay in Filing GSTR-9C

There can be various reasons why a taxpayer may not be able to file GSTR-9C on time. Some of the common reasons are:

1. Lack of understanding of the reconciliation process

2. Incomplete or incorrect data in the financial statements

3. Lack of coordination between the taxpayer and the auditor

4. Technical glitches on the GST portal

Impact of Late Fees and Penalties

Until the notification issued on 31st December 2020, delayed submission of GSTR-9C attracted late fees and penalties. The late fees were Rs. 200 per day (Rs. 100 under CGST and Rs. 100 under SGST/UTGST) subject to a maximum of 0.25% of the taxpayer's turnover in the relevant state or union territory. The penalty for late filing was Rs. 25 per day (Rs. 10 under CGST and Rs. 10 under SGST/UTGST and Rs. 5 under IGST) subject to a maximum of Rs. 5,000.

These penalties and late fees could have a significant impact on the taxpayer's finances, especially for small and medium businesses.

CBIC Notification on Late Fees and Penalties

The CBIC has issued a notification on 31st December 2020, stating that late fees and penalties will not be leviable for delayed submission of GSTR-9C for the financial years 2017-18 and 2018-19. This means that taxpayers who were unable to file GSTR-9C for these financial years will not have to pay any late fees or penalties.

The notification has been issued under Section 128 of the Central Goods and Services Tax (CGST) Act, which gives the government the power to waive any penalty or late fee for genuine reasons. The CBIC has stated that the reason for the waiver of late fees and penalties is the difficulties faced by taxpayers due to the COVID-19 pandemic and the consequent lockdown.

Conclusion

Delayed submission of GSTR-9C can attract late fees and penalties, which can have a significant impact on the taxpayer's finances. However, the CBIC has issued a notification waiving late fees and penalties for delayed submission of GSTR-9C for the financial years 2017-18 and 2018-19. This waiver has been issued keeping in mind the difficulties faced by taxpayers due to the COVID-19 pandemic and the consequent lockdown. It is advisable for taxpayers to file their GSTR-9C on time to avoid any penalties or late fees in the future.