NO PENALTY UNDER SETION 125 OF GST FOR DELAY IN SUBMITTING FORM GSTR-9C

Are there two different types of annual returns under Section 44 (1) of GST Act ? NO. There is only one Annual Return Form GSTR-9.

As per section 44 (1) “Every registered person, other than an Input Service Distributor, a person paying tax under section 51 or section 52, a casual taxable person and a non-resident taxable person shall furnish an annual return which may include a self-certified reconciliation statement reconciling the value of supplies declared in the return furnished for the financial year, with the audited annual financial statement for every financial year electronically, within such time and in such form and in such manner as may be prescribed:”

As per Rule 80 (3) “Every registered person, other than those referred to in the second proviso to section 44, an Input Service Distributor, a person paying tax under section 51 or section 52, a casual taxable person and a non-resident taxable person, whose aggregate turnover during a financial year exceeds five crore rupees, shall also furnish a self-certified reconciliation statement as specified under section 44 in FORM GSTR-9C along with the annual return referred to in sub-rule (1), on or before the thirty-first day of December following the end of such financial year, electronically through the common portal either directly or through a Facilitation Centre notified by the Commissioner.”

Therefore, Form GSTR-9C is not an independent statutory form, obligated to file under the law. It is only a self-certified reconciliation statement which is included with Annual return under Section 44(1) of GST Act. And any assesse having aggregate turnover below Rs 5.00 crore in a financial year need not Furnish Form GSTR 9C. It is only a statement reconciling turnovers reported under income tax Department and Goods and Services tax. There is no impact of tax liability on assesse and not permitted to pay any tax or to claim Input tax based on Form GSTR 9C. Hence Form GSTR 9C cannot be considered as an independent statutory form like Form GSTR 9.

IS IT CORRECT TO LEVY PENALTY WHEN THERE IS ONLY LATE FEE IS APPLICABLE.

As per section 47(2) “Any registered person who fails to furnish the return required under section 44 by the due date shall be liable to pay a late fee of one hundred rupees for every day during which such failure continues subject to a maximum of an amount calculated at a quarter per cent of his turnover in the State or Union territory.

Section 125 – GENERAL PENALTY:: Any person, who contravenes any of the provisions of this Act or any rules made thereunder for which no penalty is separately provided for in this Act, shall be liable to a penalty which may extend To twenty-five thousand rupees.

So it is very clear that the late fee is applicable for delay in submitting Form GSTR 9 only, and there is no separate late fee for delay in submitting Form GSTR 9C. With regards to liability to pay General Penalty for delay in submitting of Form GSTR 9C, it is not correct to levy PENALTY, since Form GSTR 9C is included in the Annual Return Form GSTR 9. And the General Penalty under Section 125 can be levied only in circumstance where there is contravenes of any PROVISIONS of the act or rule.  Hence General Penalty may not be applicable for delay in submitting GSTR 9C which is an attachment to annual return Form GSTR 9.

IS THERE ANY BREACH IN DELAY IN FURNISHING GSTR-9C

Section 126 (1) “No officer under this Act shall impose any penalty for minor breaches of tax regulations or procedural requirements and in particular, any omission or mistake in documentation which is easily rectifiable and made without fraudulent intent or gross negligence.”

Section 126 (4) “The officer under this Act shall while imposing penalty in an order for a breach of any law, regulation or procedural requirement, specify the nature of the breach and the applicable law, regulation or procedure under which the amount of penalty for the breach has been specified.”

Thus, to impose penalty under Section 125, there must be breach of law with Fraudulent intention. Delay in submitting Form GSTR-9C which is an attachment to Form GSTR 9 should not be treated as breach of Law with fraudulent intention. Hence no penalty can be levied under Sections 125 on delay in furnishing GSTR 9C

DOES THE ACT PERMIT DOUBLE PUNISHMENT FOR SINGLE OMMISSION

According to Section 47(2) “Any registered person who fails to furnish the return required under section 44 by the due date shall be liable to pay a late fee of one hundred rupees for every day during which such failure continues.”

Therefore the Section 47(2) deals with the delay in submitting GSTR 9 and GSTR 9C. It mandates only late fee, but not any other like penalty or interest. So when there is a specific punishment for delay in filing GSTR 9 and GSTR 9C an annual return specified under section 44, how can a separate penalty be levied for the same in circumstance where there is delay in filing either GSTR 9 or GSTSR 9C, when GSTR 9C is a self-certified reconciliation statement, which is included in annual return in Form GSTR 9. This is also against the Article 20(2) of Indian Constitution.

Article 20 of The Constitution of India 1949

20. Protection in respect of conviction for offences

(1) No person shall be convicted of any offence except for violation of the law in force at the time of the commission of the act charged as an offence, nor be subjected to a penalty greater than that which might have been inflicted under the law in force at the time of the commission of the offence

(2) No person shall be prosecuted and punished for the same offence more than once

Hence in our opinion, no penalty can be levied for delay in filing GSTR-9C.

What Penalty for delay in filing GSTR 9C.

As we explained in above paras, general penalty under Section 125 is not applicable for delay in filing GSTR 9C. But a specific penalty is prescribed for delay in filing information under Section 123 read with Section 150 of GST act.

Section 150 – Obligation to furnish information return

(1) Any person, being— (a) a taxable person;  (3) Where a person who is required to furnish information return has not furnished the same within the time specified in sub-section (1) or sub-section (2), the said authority may serve upon him a notice requiring furnishing of such information return within a period not exceeding ninety days from the date of service of the notice and such person shall furnish the information return.

Section 123 – Penalty for failure to furnish information return.

If a person who is required to furnish an information return under section 150 fails to do so within the period specified in the notice issued under sub-section (3) thereof, the proper officer may direct that such person shall be liable to pay a penalty of one hundred rupees for each day of the period during which the failure to furnish such return continues:

Provided that the penalty imposed under this section shall not exceed five thousand rupees.

OUR OPINION.

Therefore we conclude our opinion that, No penalty is leviable for delay in filing Form GSTR-9C to a tax payer, having aggregate turnover of Rs 5.00 Crore and above, when there is a specific late fee under Sec 47(2) applicable for delay in filing Annual Return prescribed under Section 44 (1) read with rule 80 (3) of GST Act. And if at all the penalty to be proposed for delay in filing GSTR 9C, it shall be Rupees FIVE THOUSAND only as per the Section 123 read with section 150 (1) & (3) of GST Act but not under Section 125 of GST Act.

Disclaimer: Views and Opinions expressed in this article are the personal views of the authors. This article, the view and opinions expressed therein do not construe any suggestion or a professional or legal advice.