GSTR-9C Reconciliation
Statements Exempt from Late Fees - Kerala High Court
By Yogesh Verma (CS/LLB) / 2 min read / GST Case Law
Case Analysis: Anishia Chandrakanth vs. The Superintendent, Central
Tax & Central Excise, Audit Circle
Court:
High Court of Kerala, Ernakulam
Case Number: WP(C)
No. 30644 of 2023
Date of Order: April
9, 2024
Judge:
The Honorable Mr. Justice Dinesh Kumar Singh
Summary of the Case
This case involved
multiple writ petitions where the petitioners contested the demand for
additional late fees on GSTR-9C reconciliation statements filed after the due
date of their GSTR-9 annual returns. The petitioners argued that, under the
CGST Act, GSTR-9C is merely a reconciliation statement rather than an annual
return, and thus, late fees should not apply to it. They highlighted the
provisions of the Amnesty Scheme issued through recent notifications, which
limited the late fee chargeable on belated filings to ₹10,000. After reviewing
these arguments, the High Court of Kerala ruled in favor of the petitioners,
determining that the late fee demand on GSTR-9C filings was unjustified and
unsustainable.
Facts of the Case
- The petitioner, Anishia Chandrakanth,
a registered taxpayer under the CGST/SGST Acts, is engaged in trading
goods like paint, cement, and hardware materials and files GST returns
regularly.
- For the fiscal years 2017-18,
2018-19, and 2019-20, the petitioner filed GSTR-9 annual returns after the
due date and paid a late fee as per Section 47(2) of the CGST Act.
- Subsequently, the respondent demanded
further late fees, basing the calculations on the dates of filing GSTR-9C
reconciliation statements, which were filed later than GSTR-9. The
petitioner contested this demand, arguing that only GSTR-9 filings should
attract late fees, not GSTR-9C.
- The petitioner pointed out that the
Central Government, through Notification No. 7/2023 and further amendment
via Notification No. 25/2023, had introduced an Amnesty Scheme. This
scheme capped late fees for delayed GSTR-9 filings to a maximum of ₹10,000
for specific financial years if filed within a prescribed period.
Submissions
by the Petitioner
- The petitioner's arguments primarily
revolved around two main points:
- Nature of GSTR-9C:
The petitioner argued that GSTR-9C is merely a reconciliation statement,
not an annual return under Section 44 of the CGST Act, and thus should
not attract any late fees. The late fee provisions under Section 47(1)
apply specifically to returns, not reconciliation statements.
- Applicability of the Amnesty Scheme:
- According to the petitioner,
Notification No. 7/2023 introduced the Amnesty Scheme, waiving late fees
beyond ₹10,000 for annual return delays across financial years 2017-18
to 2021-22.
- Since the petitioner filed GSTR-9
before the Amnesty Scheme's start date (April 1, 2023), the respondent’s
demand for late fees on GSTR-9C should be invalid under this scheme.
- Request to Quash Demands:
The petitioner requested that the court quash the respondent’s demand,
arguing it was unjust and an excessive interpretation of the late fee
rules under the CGST Act.
Submissions by the
Respondent
- The respondent's submission was
centered on justifying the late fee demands:
- Requirement of GSTR-9C with GSTR-9:
The respondent argued that GSTR-9 and GSTR-9C are interlinked, meaning
that the annual return (GSTR-9) is incomplete without the GSTR-9C
reconciliation statement. Therefore, if GSTR-9C was filed after the due
date, it justified the imposition of additional late fees.
- Non-Applicability of Amnesty Scheme
to Pre-Scheme Filers:
- The respondent pointed out that the
Amnesty Scheme was designed to benefit only those who filed GSTR-9
between April 1, 2023, and August 31, 2023. Since the petitioner had
already filed GSTR-9 before April 1, 2023, they argued the scheme did
not apply to the petitioner’s case.
- Intent of the Late Fee Provisions:
The respondent asserted that the late fee provisions in Section 47 of the
CGST Act were intended to ensure timely compliance. Any delays, even in
GSTR-9C, should attract penalties to enforce timely submission.
Findings and Judgment of
the Court
- Key Findings:
- The court reviewed both parties'
submissions and examined the relevant sections and rules under the CGST
Act, especially those governing the applicability of late fees and the
nature of GSTR-9C.
- Distinct Nature of GSTR-9 and
GSTR-9C: The court clarified that GSTR-9 is
an annual return under Section 44 of the CGST Act, whereas GSTR-9C is
merely a reconciliation statement. The GST portal also restricts late fee
payments exclusively to GSTR-9, not GSTR-9C, indicating that late fees
were not intended for GSTR-9C.
- Amnesty Scheme Interpretation:
The court found the Amnesty Scheme was designed to alleviate the burden
of high late fees for returns between FY 2017-18 to 2021-22, imposing a
cap of ₹10,000 if filed during the scheme period. It reasoned that
penalizing pre-scheme filings contradicted the scheme’s purpose.
- Unjust Demand of Late Fees for
GSTR-9C: The court held that continuing to
impose late fees on pre-scheme GSTR-9C filings was unjustified,
especially since these forms were merely supplementary statements and not
annual returns per the CGST Act’s intention.
- Judgment:
- The court ruled in favor of the
petitioner, setting aside the respondent’s demands for late fees on
GSTR-9C filings. The court concluded that the petitioner should not be
subjected to late fees for reconciliation statements filed before the
Amnesty Scheme's effective date. However, it was clarified that any late
fees already paid in excess of ₹10,000 were not refundable.
Conclusion
The court’s decision
underscored that GSTR-9C reconciliation statements are not equivalent to annual
returns and, therefore, should not attract late fees under the provisions of
the CGST Act. By invoking the Amnesty Scheme, the court emphasized the scheme’s
intent to provide relief and capped late fees across specified financial years,
deeming additional demands on pre-scheme filings as inconsistent with the
scheme's purpose.
Disclaimer: All the Information is based on the notification, circular and order issued by the Govt. authority and judgement delivered by the court or the authority information is strictly for educational purposes and on the basis of our best understanding of laws & not binding on anyone.
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