GSTR 3B Late Fees Penalty Waived off by Modi Govt for August and September

After the roll out of new tax system – GST, Modi led BJP Government has been facing a lot of heat from the industry on the compliance requirements that traders are finding difficult to meet.  Today, the government has announced that for the August and September GSTR 3B returns, the late fee that has been charged to the assesses, would be refunded in their accounts.

“To facilitate taxpayers, late fee on filing of GSTR-3B for Aug & Sept has been waived. Late fee paid will be credited back to taxpayer ledger.” Finance Minister Arun Jaitley tweeted.

What is GSTR 3B?

GSTR 3B is a monthly return for the tax payer that has the summarized information on their sales, purchases for the particular month. This return needs to be filed by 20^th of every month for business done in previous month.

The late fee was also waived off the July month as it was the first month of GST in place and a lot of businesses didn’t have the clarity, readiness and faced issued related to GST system.

Low compliance for GSTR-3B

Since July till September, it has been observed that the majority of the GSTR-3B returns filed are after the due date.

However, returns filed by due date has been improving after a slew of steps taken by the GST council to help Small-Medium enterprises and exporters.

As per the data from GSTN (GST Network),

Month	Returns filed By Due Date (in Lacs)	Returns filed After Due Date (in Lacs)	Total Returns Filed
July	33.98	21.89	55.87
August	28.46	22.91	51.37
September*	39.4	2.6	42

*Data for September is updated till 23^rd October.

Businesses had been demanding to waive off the penalties on GSTR-3B filing as they were finding challenges with GST portal and slowdown of the system and at the same time the MSE are still not used to filing returns online awaiting for more help from the government on the process and system.

A fine of Rs. 100 per day for CGST & SGST under the current law

As per the present GST law, a fine of Rs. 100 per day is levied in case of late filling and the payment of taxes. This fine is levied for both central GST and state GST individually making it Rs. 200 per day in case the tax payer has missed the deadline.

Along with the fine, an interest of 18% per annum is also charged to the tax payer on the late payment of the dues.

This move by the Modi government would not just give relief but also promote the SMEs to file returns by giving them more time and gradually be tax compliant.

It is still with the government to fix the issues faced by the businesses on the portal, late refunds and technical issues while filing returns to actually reap the benefits of the new system in form of a wider tax payer base.