Gujarat High Court in Favour of GSTR-3B Late Fee Refund

In the matter of AAP&Co vs Union of India, the Hon’ble Gujarat High Court granted interim relief in writ challenging imposition of late fee for late filing of GSTR-3B under Section 47 of the CGST Act.

The writ petition represented by M/s AAP&Co., before the Hon’ble Gujarat High Court on behalf of thirty-one applicants, praying for issuing order or direction and to declare the imposition of the late fee on GSTR-3B as illegal, ultra vires and without any authority of law.

Notification No.76/2018 dated 31.12.2018, grants waiver of late fee only when the return was filed between the 22nd of December 2018 to the 31st of March 2019. The petitioner petitioned to issue an order granting the complete waiver of late fee for the returns filed till the 21st of December 2018.

The petitioner also prays to issue a direction to respondent authorities to refund the late fees collected for late filing of Form GSTR 3B for return period July 2017 to September 2018, filed till 21st of December 2018.

The petitioner contends that Section 47 of the CGST Act talks about failure to file the returns under Section 37 or Section 38, or returns under Section 39 or Section 45 by the due date.

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Section 37 corresponds to GSTR-1, Section 38 corresponds to GSTR-2, Section 39 corresponds to GSTR-3, 4, 5, 6, 7, 8 and Section 45 corresponds to GSTR-10. He also submits that the GSTR-3B can not be read in Section 39.

The petitioner also requests that the levy of late fees by virtue of the power under Section 47 of the Act is something else which this court will have to look into and adjudicate.

The Hon’ble Gujarat High Court in Special Civil Application No. 14624 of 2019 dated 28th of August 2019 held that the writ applicants have been able to make a strong prima facie case to have an interim order and the Hon’ble Court has granted the interim order.

The CBIC has already waived off of late fee for late filing of GSTR-3B for the months of July, August and September 2017 through Notifications 28/2017 and 50/2017. The late fee has been reduced from Rs.100 to Rs.25 through notification 76/2018 with retrospective effect from July 2017.

It was also notified in 76/2018 that the late fee waived for the return period July 2017 to September 2018 filed between 22nd of December 2018 to 31st March 2019.

This can be understood as reduced late fee of Rs.25 has to be charged for the taxpayers, who filed returns for the period July 2017 to September 2018 filed between 1st of July 2017 to 21st of December 2018. This is an inappropriate way of treating the taxpayers. The petitioner request for the refund of late fee of Rs.25 is valid.

The reason for charging late fee is only because they have filed GSTR-3B earlier to 22nd of December 2018 i.e, before the notification date. The petitioner is right in requesting for modification of the notification 76/2018. The petitioner is also correct in claiming the refund, as the taxpayers have suffered by the inappropriate charge of late fee of Rs.25.

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