Kerala High Court in its recent judgement held that the demand for a late fee for belated GSTR 9 C is not valid as the Central Goods and Service Tax ( CGST ) notification waived it and allowed the refund of the late fee paid. The court held that the petitioners will not be entitled to claim a refund of the late fee which has already been paid by them over and above Rs.10,000/-.
Anishia Chandrakanth, the petitioner is a proprietorship concern dealer under the CGST / SGST Act, 2017 and the Rules made thereunder. The petitioner is engaged in the trading of paint, cement, aluminium sheets hardware etc. The petitioner has been filing his proper returns and paying the tax dues thereon. However, the petitioner did not file his returns within the prescribed time limit under the Statute. As per Section 44(1) r/w Rule 80 of the CGST / SGST Act, the annual return Form GSTR-9 is to be filed before 31st December following the end of such financial year.
The Government realising the difficulties in initial stage of implementation of GST regime particularly Rule 80 of the GST Rules, 2017, and prevailing of Covid -19 pandemic, extended the last date to file the returns for the financial years 2017-2018, 2018-2019 and 2019-2020 by the notification No.6/2020-CT dated 03.02.2020, 80/2020-CT dated 28.10.2020 and 4/2021-CT dated 28.02.2021 respectively.
The petitioner has been issued a show cause notice dated 29.03.2023, for calculating the number of days of delay in filing annual returns. The respondent had proposed to demand a late fee of Rs. 2,93,600/- under Section 47(1) of the CGST / SGST Act, after adjusting the late fee of Rs. 57,600/paid by the petitioner.
A corrigendum dated 13.04.2023 was issued by the respondent stating that under Section 47(1) referred to in the show cause notice dated 29.03.2023, it should be read as Section 47(2) of the GST Act. The petitioner had submitted a reply dated 25.04.2023, pointing out the detailed objections to the proposals in the above notice and requested to drop the same by the reply dated 25.04.2023.
The petitioner submitted that a registered person is liable to pay the late fee under Section 47(2) only when he fails to furnish the return in FORM GSTR-9 under Section 44 of the CGST / SGST Act. GSTR-9C is only a reconciliation statement to be filed along with the annual return and FORM GSTR-9C is not a return as contemplated under Section 44 of the CGST / SGST Act. Late fee is leviable up to the late filing of the GSTR 9 return and not the GSTR-9C reconciliation statement.
The respondent, however, did not agree with the objections raised by the petitioner and passed the order in originally confirming the demand for a late fee of Rs. 2,93,600/- (Rs.1,46,800/- under CGST Act and Rs.1,46,800/under the SGST Act) under Section 47(2) of the CGST / SGST Act, for the delay in filing of returns prescribed under Section 44(2) of the CGST / SGST Act for the period from 2017-2018, 2019-2020. An amount of Rs. 57,600/- has been paid by the petitioner towards the late fee was appropriated against the demand confirmed.
Counsel for the petitioner has submitted that the Government has issued Notification No.7/2023-CT dated 31.03.2023, providing for an Amnesty Scheme concerning the non-filers of GSTR-9 returns in exercise of the powers conferred under Section 128 of the CGST / SGST Act on the recommendation of the GST council, whereby, for non-filers of the returns for the financial years 2017-2018 to 2021-2022, time for filing the returns in GSTR-9 and 9C was initially provided upto 30.06.2023. By the subsequent notification No.25/2023, i.e., 30.06.2023, it was extended up to 17.07.2023. Under the said Amnesty Scheme, the late fee over Rs.10,000/- to be paid under Section 47 of CGST / SGST Act, concerning the returns for the financial years 2017-2018 to 2019-2020 has been waived.
The petitioner had filed the annual return for the said year as early as in the years 2020-2021 and before the commencement of the Amnesty Scheme, i.e., on or before the commencement of the Amnesty Scheme with effect from 01.04.2022
GSTR-9C is an annual GST Reconciliation statement that reconciles the figures reported in the GSTR-9 annual return with the audited financial statements of the taxpayer. Form GSTR-9C was earlier applicable to registered persons with more than Rs. Two Crores as annual turnover in a particular financial year, but, with effect from 01.08.2021, now it is applicable for turnover exceeding Rupees Five Crores.
The GST portal enables to charging of late fees for GSTR-9 only. Annual return GSTR-9 filed without 9C may be deficient attracting a general penalty. However, a late fee cannot be made applicable for regularising the GSTR9 by filing GSTR9C.
Justice Dinesh Kumar Singh observed that when the Government itself waived the late fee under the aforesaid two notifications Nos.7/2023 dated 31.03.2023 and 25/2023 dated 17.07.2023 more than Rs.10,000/-, in case of non-filers there appears to be no justification in continuing with the notices for non-payment of late fee for belated GSTR 9C, that too filed by the taxpayers before 01.04.2023, the date on which one-time amnesty commences.
While allowing the petition, the court held that the petitioners will not be entitled to claim a refund of the late fee which has already been paid by them over and above Rs.10,000/-.
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