Govt have no power to refund fee received on late filing of GSTR-3B

The Goods and Services Tax (GST) introduced by the Indian government has been a subject of debate and controversy since its inception. One of the issues is the late filing of the GSTR-3B. The GSTR-3B is a return that a registered dealer is required to file under GST law. It is a monthly summary of the transactions that have taken place during the month. The return must be filed by the 20th of the following month.

In case a registered dealer fails to file the GSTR-3B by the due date, he or she is liable to pay a late fee of INR 50 per day, subject to a maximum of INR 5000. The late fee is required to be paid along with the tax liability in the return.

However, there have been instances where the registered dealer has paid the late fee but has not filed the return. In such cases, the question arises as to whether the government has the power to refund the fee paid by the dealer.

The answer is no. The government does not have the power to refund the fee paid by the dealer in case of late filing of the GSTR-3B. This has been clarified by the Appellate Authority for Advance Ruling (AAAR) in the case of M/s. Clay Craft India Pvt. Ltd.

The AAAR held that the late fee paid by the dealer is a penalty and not a tax. Therefore, the provisions of the Central Goods and Services Tax Act, 2017, which provide for the refund of tax, do not apply to the late fee.

The AAAR further held that the government has no power to refund the penalty paid by the dealer. The late fee is a penalty for non-compliance and is intended to deter the registered dealer from committing the same mistake in the future.

While the decision of the AAAR is binding only on the parties to the case, it has provided clarity on the issue of the refund of late fee. The decision has far-reaching implications for registered dealers who fail to file the GSTR-3B on time.

The AAAR has made it clear that the late fee is a penalty and not a tax. This means that the government does not have the power to refund the fee paid by the dealer. The decision has ended the confusion that prevailed among registered dealers regarding the refund of late fee.

It is important for registered dealers to file the GSTR-3B on time to avoid the payment of late fee. The late fee not only adds to the financial burden of the dealer but also affects the compliance rating of the dealer.

In conclusion, the government has no power to refund the fee paid by the dealer in case of late filing of the GSTR-3B. The decision of the AAAR has provided clarity on the issue and has put an end to the confusion that prevailed among registered dealers. It is important for registered dealers to file the return on time to avoid the payment of late fee and maintain a good compliance rating.