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CA Intermediate · Taxation · Returns

Anand Textiles, Surat, a normal taxpayer, did not file its GSTR-3B for a month in which it had nil tax liability and nil outward supplies. Which of the following is correct regarding late fee under section 47 of the CGST Act, 2017?

Late fee under section 47 is charged per day of delay even for a nil return, but at a lower notified rate and cap than the rate for returns showing tax liability. Nil status does not exempt the filer, and no interest arises because no tax is payable.

  1. ALate fee is payable for each day of delay, at a lower reduced rate for a nil return than for a return with liabilityCorrect
  2. BNo late fee is payable since the return is nil
  3. CLate fee is payable at the same rate as for a return with tax liability
  4. DOnly interest at 18% is payable on the nil tax

Explanation

Late fee is levied per day of default from the due date until the return is filed. For nil returns, a lower per-day amount, subject to a lower cap, is notified compared with returns showing tax liability. Thus a nil return is not exempt from late fee, nor charged at the full rate. Interest cannot arise as no tax is payable.

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