GST Late Fee Waiver for Annual Returns and Reconciliation Statements

GST Late Fee Waiver: What You Need to Know

The Central Government, under Notification No. 08/2025 – CENTRAL TAX dated 23rd January 2025, has announced a GST late fee waiver for specific annual returns and reconciliation statements. This move comes as a relief for businesses that missed filing their GSTR-9 (annual return) and GSTR-9C (reconciliation statement) for financial years 2017-18 to 2022-23. Here’s an in-depth analysis of the notification and how businesses can benefit.

What Does the Notification Say?

The Ministry of Finance, exercising powers under Section 128 of the CGST Act, 2017, has waived late fees for delayed filing of FORM GSTR-9C, provided the following conditions are met:

1. Eligibility:
   • The waiver applies to registered persons who failed to submit the reconciliation statement (FORM GSTR-9C) along with the annual return (FORM GSTR-9).
2. Timeframe for Filing:
   • Eligible taxpayers must file the pending GSTR-9C on or before 31st March 2025.
3. Waiver Scope:
   • Late fees exceeding the prescribed amount under Section 47 of the CGST Act are waived.
4. Refund Clause:
   • No refund will be granted for late fees already paid.

Why Is This Waiver Significant?

The waiver provides much-needed relief to businesses grappling with past GST compliance challenges. For years, many taxpayers faced financial penalties for delayed filings, especially for earlier financial years. By extending this amnesty, the government is encouraging taxpayers to comply with pending filings while fostering a culture of better compliance.

Case Law Insights

Several recent rulings emphasize the importance of timely GST filings. One notable example is the Madhya Pradesh High Court’s judgment addressing technical glitches and undue penalties in GST compliance. The court highlighted that taxpayers should not face undue hardships for procedural lapses, aligning with the spirit of this late fee waiver.

Implications for Businesses

1. Reduced Financial Burden: Businesses can save substantial amounts on late fees by filing pending GSTR-9C returns before the deadline.
2. Improved Compliance Track Record: Filing overdue returns demonstrates a proactive approach, reducing future compliance risks.
3. No Refund Policy: Businesses should note that previously paid late fees are non-refundable under this scheme.

What Should You Do?

To leverage this opportunity:

1. Verify Pending Returns: Check if any GSTR-9 or GSTR-9C filings are overdue for FY 2017-18 to 2022-23.
2. File by 31st March 2025: Submit your pending returns within the stipulated timeline to benefit from the waiver.
3. Seek Professional Guidance: Consult a tax expert to ensure accurate filing and avoid errors that could lead to penalties.

Key Takeaways

• The GST late fee waiver is a golden opportunity for businesses to resolve past non-compliance.
• Act promptly to file pending GSTR-9C returns before 31st March 2025.
• Professional assistance can ensure seamless compliance and avoid future risks.