Government in Confusion Over Waiving GST Return Penalty

It is worth noting that from starting of the GST era, many of the businessmen who had never filed even a single return of GST were exempted from paying any penalty recently made confusion and partiality views on the government by the businessman who had deposited late filing penalty earlier.

Recently, the Indian government has waived penalty fees for the businesses registered under the Goods and Services Tax (GST) regime. Now, the businesses have started regretting as they paid the returns with penalty charges by following the legal norms. In view of the GST Council 32nd Meeting that is to be scheduled on January 10, 2019. Now, the traders are seeking that the government should return the penalty amount to them those have paid the returns with penalty fees.

As previously, the government had returned the late penalty amount to the businesses after few days of the announcement of late fee waiver. But due to the high amount the government has not taken any decision till now. The matter is becoming a critical day- by day and organization are ready to take the matter to the court. Furthermore, they are waiting for the next GST Council Meeting.

Sudhir Haakhandi, GST Consultant stated that till December 21 taxpayers who have filed the tax returns with late penalties are feeling looted as they followed the proper legal rules. We can calculate the estimated amount of late penalty as the government was charging Rs 50 per day (Rs 25 for CGST and Rs 25 for SGST) for the GSTR-3B as penalty fee. The maximum limit amount is Rs 10,000 and it remains same for GSTR-1 returns.

The penalty fee for GSTR-3B return is Rs 10,000 if in case the traders have been delayed for more than 200 days then he paid Rs 10,000 as a penalty fee for filing the tax returns. Till September 2018, taxpayers were to file15 returns.

If in case taxpayers have been delayed for 5 returns for more than 200 days then he is entitled to pay up to Rs 50,000 as penalty charges. People who had not paid any returns until now and submitted the returns before December 21 with late fees, in this case, the penalty fee can go up to Rs 1 Lakh. Although, these types of cases are very low and most of the traders have filled the returns 20-25 days later than the specific timeline.

But there are thousands of people who paid the Rs 30,000 to 40, 000 as late fee. The traders are very angry with this and saying that there is discrimination in the legal norms. If the government does not return the penalty amount to the traders then the people would not have faith in the legal norms.

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CA Ramesh Batra stated that after this matter the relations between professionals and taxpayers have started demolishing. People who filed the returns by paying penalty before December 21 the client are asking questions to them why the returns were filed when the government has planned to waive it.

Currently, the people are waiting for the next GST Council Meeting, however, many of the organizations have written a letter to the Finance Minister, Arun Jaitley regarding that government should return the penalty amount to the traders.