Understanding The Late Fee Applicability for FORM GSTR-9C: Insights from Circular No. 246/03/2025-GST

The Central Board Of Indirect Taxes and Customs (CBIC) has released Circular No. 246/03/2025-GST dated 30th January 2025, to clarify the applicability of late fees under Section 47 of the CGST Act for delays in filing FORM GSTR-9C (Reconciliation Statement) along with FORM GSTR-9 (Annual Return). This clarification helps to ensure uniformity and consistency of interpretation and implementation of the provision of law.

Background: Filing Requirements of FORM GSTR-9C

Before 1st August 2021, the CGST Act (Sec 44(2)) required taxpayers with an aggregate turnover exceeding ₹2 crore to have their accounts audited and file FORM GSTR-9C, which had to be certified by a Chartered Accountant or Cost Accountant. The requirement for audit certification was removed after the amendment to Section 44 of the CGST Act, effective 1st August 2021. Instead, taxpayers with an annual turnover greater than ₹5 crore must now self-certify FORM GSTR-9C and file it along with their annual return in FORM GSTR-9. For those taxpayers with an annual turnover of up to ₹5 crores, it is only FORM GSTR-9 that needs to be filed.

Key Clarifications Provided in the Circular

1. Annual Return Includes Both GSTR-9 and GSTR-9C (If Applicable)

It has been clarified in the Circular that as per Section 44 of the CGST Act, annual return filing requirement will be deemed completed:

• Where GSTR-9C has to be filed in addition to GSTR-9 by taxpayers with a turnover exceeding ₹5 crore.
• Where GSTR-9 has to be filed by taxpayers with a turnover of up to ₹5 crores.

If GSTR-9 has been appropriately filed but GSTR-9C has not been filed, the annual return will still be deemed incomplete until GSTR-9C is provided.

2. Late Fee Applicability of Delay in the Filing of the GSTR-9C:

Under Section 47(2) of the CGST Act, a late fee is applicable for failure to furnish the annual return by the due date. Since the annual return includes both GSTR-9 and GSTR-9C (for taxpayers above ₹5 crore), the circular clarifies that:

• Late fee is not separately charged for GSTR-9 and GSTR-9C.
• Late fee is computed from the due date of the annual return until the date the complete return (GSTR-9 + GSTR-9C, if applicable) is furnished.
• If GSTR-9 is filed on time but GSTR-9C is delayed, late fee will be calculated until GSTR-9C is submitted.

3. Relief from additional Late Fee for Previous Years:

The circular also refers to Notification No. 08/2025-Central Tax dated 23rd January 2025, which provides relief for past delays.

• If GSTR-9C is filed by 31st March 2025 (for any Financial Year upto FY 2022-23), no additional late fee will apply beyond what was payable for GSTR-9.
• No refund of late fees already paid will be given.

Implications:

1. Timely Filing: Both GSTR-9 and GSTR-9C (if applicable) must not be delayed as the late fee is to be avoided.

2. Correct Computation of Late Fee: The late fee shall be a single component and calculated from the due date of the annual return to the time it would have been finally covered.

3. Relief for Past Delays: If the business has not filed GSTR-9C for the earlier financial years (up to FY 2022-23), then an additional late fee will not apply if it is done before March 31, 2025.

Conclusion:

The clarification of the circular No. 246/03/2025-GST issued by the CBIC shall ensure uniformity in application regarding late fees applying to GSTR-9C. This resolves the confusion regarding separate late fees for GSTR-9 and GSTR-9C.