News Analysis

Tax-payers cheer waiver of late fee on filing GSTR-3B

Satya Sontanam BL Research Bureau | Updated on January 08, 2018

“The late fee levied even on late filing of ‘NIL’ returns (where no tax is payable) was a pain point for the economic agents of the country.”

The CBEC provided some relief to GST tax payers on Tuesday, waiving the late fee levied on the GSTR 3B returns filed for the months of August and September.

This move followed a large outcry by taxpayers who were slapped with late filing fee, even if they had no intention to delay return filing.

GSTR-3B is a provisional return introduced by CBEC that allows tax payers to provisionally calculate the tax liability and pay to the exchequer.

Imposition of the late fee was viewed as unfair given that tax payers were still struggling to transition to the new tax regime with the slow GSTN and the complex tax laws.

“The late fee levied even on late filing of ‘NIL’ returns (where no tax is payable) was a pain point for the economic agents of the country,” says Aditya Singhania, DGM GST of Taxmann. He points out this leeway can be used by the almost 30 lakh tax payers who have not filed their GST returns for any period, so far.

The late fee already paid for August and September will be credited to the tax payer’s cash ledger in the GST portal; split between the CGST and SGST balances in the GST portal.

The credit that will be reflected in the ledger could be utilised for the future tax liabilities. So, the tax payers with nil tax liability have to wait until the tax liability occurs to utilise the credited amount.

Preetam Batra, a practising Chartered Accountant, says that this is a cash blockage for such assesses as the government is not transferring the waived amount to their linked bank accounts.

It also needs to be noted that only late fee has been waived till now while interest charges for late payment of tax, which is 18 per cent of the amount due, is still applicable.

Batra says, the interest amount will be appearing in the GSTR-3, which calculates the actual tax liability.

Another Chartered Accountant Rajan Raichura said, “While this is a welcome step, we would like the government to relax the late fee provisions for other returns also; the GSTR 1 and 2 for ease implementation of GST in initial stages”.

However, according to Pratik Jain, Leader - Indirect Tax PWC, the government may not consider waiver for subsequent months as it is currently ironing out the issues with the GSTN. He advises businessmen to file the returns on time.

Published on October 24, 2017

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