Didn’t file GSTR-3B by due date? Here’s what at risk

GSTR-3B deadline ended on November 20: File it immediately to avoid loss of pending input tax credit & cancellation of GST registration

The deadline for filing GSTR-3B was November 20, 2024, for all GST registered taxpayers except in the state of Maharashtra and Jharkhand where the deadline is November 21, 2024. GSTR-3B is a simplified return that is essentially a summary of outward supplies, inward supplies subject to reverse charge mechanism (RCM), calculation of eligible input tax credit (ITC) and others. It serves as a self-declaration for registered GST taxpayers and complements the GSTR-1 and GSTR-2 forms by summarising GST liabilities for a specific tax period.

What can happen if you fail to file GSTR-3B by the deadline

Missing the GSTR-3B return filing deadline results in penalties and interest being levied on (Goods and Services Tax) GST registered taxpayers. The maximum amount of late fee can vary based on the type of return and the taxpayer's turnover.

Chartered Accountant Abhishek Soni, co-founder, Tax2Win explains the penalty and interest which needs to be paid if GSTR-3B is filed after the deadline:

1. Late Filing Penalty
Nil Return: Rs 20 per day (Rs 10 under CGST and Rs 10 under SGST).
Normal Return: Rs 50 per day (Rs 25 under CGST and Rs 25 under SGST).

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2. Interest on Tax Dues
In addition to the late fee, an 18% annual interest is charged on any outstanding tax amount from the due date until the payment date.

However, there is a limit for the maximum amount of late fee that the GST department can collect for late filing of the return. The table below shows this:

Soni highlights that any mistakes or omissions made in previous filings for FY 2023-24 cannot be corrected after November 30, 2024. "Late fees continue until the return is filed, with interest at 18% on outstanding tax dues. Further non-filing for two consecutive tax periods restricts e-way bill generation."

GST registration can be cancelled if GST returns are not filed

Siddharth Chandrashekhar, Advocate & Panel Counsel for CBIC & CBDT says: "If an assessee skips filing monthly GST returns for six straight months, the GST department won't sit idly by. They can issue a show cause notice (SCN) and launch proceedings, demanding answers for the non-compliance. Ignore them further, and the department can cancel your GST registration on a suo moto basis. Deadlines aren't just dates-they're lifelines."

Chartered Accountant Akhil Pachori agrees with Chandrashekhar and cautions that GST registration may even be cancelled if composition scheme registered GST taxpayers don't file the GST return including GSTR-3B for two tax periods. "The department initiates action if a composition scheme taxpayer does not file GST returns for two consecutive tax periods. If the taxpayer still does not file his/her pending GST returns, then the department may take a strict action against the taxpayer by starting the process for cancellation of GST registration. Hence in my opinion every GST registered taxpayer should file their mandatory returns on time."

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The buyer loses pending input tax credit for FY 2023-24 if GSTR-3B is not filed by November 30, 2024

November 30, 2024, is the last date to claim any pending input tax credit for the last financial year i.e. 2023-24 through filing GSTR-3B.

According to Soni, if a GST-registered taxpayer does not file GSTR-3B by November 30, 2024 (by paying the penalty), they will lose the opportunity to claim any pending input tax credit (ITC) for FY 2023-24.

"This includes any unclaimed ITC or amendments to previous filings. Without the ability to claim ITC, the buyer cannot offset their output tax liability, resulting in a higher tax burden. Therefore, it is crucial to meet this deadline to ensure that ITC benefits are not lost," says Soni.

This story originally appeared on: India Times - Author:Faqs of Insurances