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WHETHER PENALTY WILL BE LEIVABLE U/S 125 OF THE CGST ACT,2017 AT THE TIME OF DEPARTMENTAL AUDIT (U/S 65 OF CGST ACT,2017) FOR LATE FILLING OF GSTR-9C

Answer: No, because

Background

  • After enacting GST in 2017 filing of GSTR-9C (Reconciliation statement & Certification) is compulsory whose aggregate turnover exceeding 2 crores in F.Y 2017-2018 and for F.Y 2018-2019, F.Y 2019-2020,F.Y 2020-21 whose aggregate turnover exceeding 5 crores.
  • But before filling of GSTR-9C first we have to file GSTR-9 for the relevant period. Some of the figures in GSTR -9 will get captured in GSTR-9C in some columns that means GSTR -9C is a sub set of GSTR -9. Without filing of GSTR -9 we cannot move forward to GSTR -9C.
  • The late fees for not filing the GSTR 9 within the due date is Rs 100 per day, per act. That means late fees of Rs 100 under CGST and Rs 100 under SGST will be applicable in case of delay.
  • Thus, the total liability is Rs 200 per day of default. This is subject to a maximum of 0.25% of the taxpayer's turnover in the relevant state or union territory. However, there is no late fee on IGST yet.
  • While we are paying penalty for GSTR-9C for late filling u/s 125 of CGST Act during audit which is already suffered in the GSTR-9 in the form of late fees and also GSTR-9C is subset of GSTR-9. Levying penalty for Gstr - 9c which is unconstitutional.
Penalty for late filling of GSTR 9C

Following Figures in GSTR-9C has to be taken from GSTR-9

System generated summary based on GSTR 9 filed shall have the following fields In GSTR 9C

Headings

Table for GSTR-9C

Deriving table of GSTR-9

Turnover as declared in annual return

Table 5Q

Table 5N+Table(10-11)

Taxable Turnover as per liability declared in Annual return

Table 7F

Table (4N-4G) +Table (10-11)

Total amount of taxes paid as declared in Annual return

Table 9Q

Table 9 +Table 10- Table 11

ITC claimed in Annual return

Table 12E

Table 7J

ITC claimed in Annual return

Table 14S

Table 7J

 
  • Late fees and penalty are complimentary to each other, in case of late fees is levied
  • A person fails to furnish details of outward or inward supplies, monthly return or final return by the due date - The GST penalty for late filing is INR 100 for every day during which the failure continues, subject to a maximum of INR 5,000
  • A person fails to furnish the annual return by the due date - The GST late filing penalty is INR 100 for every day during which the failure continues, subject to a maximum of quarter percent of the person's turnover in the state where he is registered
  • In case of penalty is levied for a violation or breach of law. Late fees and penalty will be leviable for both of the offences one is for breach of timing as specified in the law and another is for breaching of law.
  • Where as in section 125 is general penalty provision where any breach any act is not covered by any of the provisions from Section 122,123,124 & 126 to 138 then general penalty will attract means 'etc' provision. It may be levied from re 1 to Rs 25000 under each head of CGST and SGST.

Legal background

  • GST is enacted by the 101st constitutional Amendment.
  • Where as in the same Constitution there in Part iii (Right to freedom) in clause 2 of article 20 in Constitution of India which explains as follows: 'No person shall be prosecuted and punished for the same offence more than once'
  • Means that for a single offence there should not more than single punishment.
 

Conclusion

Penalty levying for GSTR-9C for late filing u/s 125 of CGST Act is unconstitutional and unfair where late fees has already been collected by the government for GSTR -9, since GSTR-9C is part and parcel of GSTR-9, as without filing GSTR-9 we cannot file GSTR-9C.

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