Punjab Government Modifies Goods and Services Tax Late Fee Waiver for GSTR-3B Returns

The Government of Punjab, Department of Excise and Taxation (Excise and Taxation Branch-II), issued Notification No. S.O. 39/P.A.5/2017/S.128/Amd./2023 on May 8, 2023. This instrument, a notification, was enacted in exercise of the powers conferred by section 128 of the Punjab Goods and Services Tax Act, 2017 (Punjab Act No.5 of 2017), following recommendations from the Council. The notification introduces significant amendments to the existing Notification No. S.O.61/P.A.5/2017/S.128/Amd./2019, dated May 9, 2019, primarily concerning the waiver of late fees for delayed filing of FORM GSTR-3B returns. The changes affect registered persons (taxpayers) under the Punjab Goods and Services Tax Act, 2017, and are deemed to have come into force retrospectively on and with effect from June 1, 2021.

The amendments include a substitution in the eighth proviso, effective from May 20, 2021, which revises the period for which late fees were waived for GSTR-3B returns for specific months. For taxpayers with an aggregate turnover exceeding rupees five crores in the preceding financial year, the late fee was waived for fifteen days from the due date for returns pertaining to March, April, and May 2021. For taxpayers with an aggregate turnover (total annual sales) of up to rupees five crores, the waiver period was sixty days for March 2021, forty-five days for April 2021, and thirty days for May 2021. Furthermore, the notification inserts new provisos, effective from June 1, 2021, to address late fee liabilities for past and future periods. For registered persons who failed to furnish their GSTR-3B returns for the months or quarters from July 2017 to April 2021 by the due date, but subsequently filed them between June 1, 2021, and August 31, 2021, the total amount of late fee under section 47 of the Act was waived in excess of five hundred rupees. A further concession was provided where the total amount of state tax payable in such a return was nil, in which case the late fee was waived in excess of two hundred and fifty rupees for the same period and filing window.

The legislative intent behind these amendments is to rationalize the imposition of late fees and provide relief to taxpayers, thereby encouraging compliance with Goods and Services Tax (GST) filing requirements. The earlier statutory framework, while imposing late fees for delayed returns under section 47 of the Punjab Goods and Services Tax Act, 2017, did not always account for the practical difficulties faced by taxpayers, particularly during specific periods. The retrospective application of these waivers addresses statutory gaps and issues that may have led to excessive late fee burdens for taxpayers who regularized their filings within the specified windows. The legislation provided: “Provided also that the total amount of late fee payable under section 47 of the said Act for the tax period June, 2021 onwards or quarter ending June, 2021 onwards, as the case may be, shall stand waived which is in excess of an amount as specified in column (3) of the Table given below, for the class of registered persons mentioned in the corresponding entry in column (2) of the said Table, who fail to furnish the returns in FORM GSTR-3B by the due date, namely:” This core provision establishes a revised, ongoing mechanism for capping late fees for GSTR-3B returns from June 2021 onwards. Under this new structure, for registered persons whose total amount of state tax payable in the return is nil, the late fee is capped at two hundred and fifty rupees. For those with an aggregate turnover of up to rupees 1.5 crores in the preceding financial year, the cap is one thousand rupees, provided they are not covered under the nil tax category. Taxpayers with an aggregate turnover exceeding rupees 1.5 crores but up to rupees 5 crores in the preceding financial year, and not falling under the nil tax category, will have their late fee capped at two thousand five hundred rupees. These amendments introduce new obligations for taxpayers to adhere to the specified filing timelines to benefit from the reduced late fee caps, while simultaneously offering a more lenient enforcement mechanism for delayed filings. The policy rationale aims to balance revenue collection with taxpayer facilitation, ensuring that penalties are proportionate and do not unduly burden businesses.

Keywords: Punjab GST, GSTR-3B, Late Fee Waiver, Goods and Services Tax, Tax Compliance, Punjab Excise and Taxation, Retrospective Amendment, Taxpayer Relief Geo Tags: India, Punjab District: Not Applicable