Late Fees paid or GST Returns

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This query is : Resolved

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This discussion clarifies whether late fees paid for GST returns can be debited to the Profit & Loss account and disallowed when computing Income from PGBP. The consensus is that late fees, paid for compliance with the Act, are generally allowable as a deduction under Section 37. This is because they are not for an offence or prohibited by law. However, penalties paid would be disallowed.

Piyush

Piyush (Querist)
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04 March 2021 Late fees paid for Filing GST returns debited to Profit & Loss Account, Whether to disallow while computing Income from PGBP ?

Ganeshbabu K

Ganeshbabu K (Expert)
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05 March 2021 Late fee is not paid for a purpose which is an offence or prohibited. In fact, late fees are paid for the purpose of the compliance with the Act. Hence, it will be allowed under Section 37 as it is is not an offence or prohibited under any law.

Refer Section 43B
Any tax, duty, cess or fee paid under any law in force is allowed as a deduction when it is paid- this includes GST, customs duty or any other taxes or cesses paid.