In a relief for taxpayers required to deduct tax at source (TDS) under section 51 of the Central Goods and Services Tax (CGST) Act, 2017, the Central Board of Indirect Taxes and Customs (CBIC) has issued Notification No. 23/2024, dated October 8, 2024. This notification waives the late fee for delays in filing FORM GSTR-7 from June 2021 onwards, with certain limits and conditions, and is set to come into effect on November 1, 2024.
Key Highlights of the Notification
- Late Fee Cap: For delays in filing GSTR-7, the late fee is capped at ₹25 per day, subject to a maximum of ₹1,000.
- Full Waiver for Nil TDS: If no tax was deducted at source (TDS) during a month, the late fee is fully waived for that period.
- Applicability: This waiver applies to registered persons who are obligated to deduct TDS under section 51 of the CGST Act and who have delayed filing their GSTR-7 returns from June 2021 onwards.
- Legal Basis: The waiver is issued under section 128 of the CGST Act, which grants the government the authority to reduce or waive the late fee for non-compliance with tax filing deadlines.
Late Fee Details
- The maximum late fee for delayed filing is limited to ₹1,000, reducing the burden on TDS filers who might have faced significant late fees in the past.
- For months where no tax was deducted, the complete waiver ensures that businesses are not penalized unnecessarily for zero TDS activity.
Effective Date
This notification will come into force on November 1, 2024, providing taxpayers with ample time to comply and benefit from the late fee waiver if applicable.
Impact on Businesses
The waiver is expected to bring substantial relief to businesses that were facing hefty penalties for delayed filing of GSTR-7. This includes public sector units, government departments, and other registered entities required to deduct tax at source. By capping the late fee and offering full waivers in certain cases, the CBIC aims to encourage timely compliance and reduce the financial strain on taxpayers.
Compliance Reminder
Registered persons required to deduct TDS should ensure timely filing of FORM GSTR-7 to avoid penalties and take advantage of the waiver for past delays. It is advisable to consult with tax professionals to ensure compliance with the updated provisions.
Official copy of the notification has been attached
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