Understanding Notification No. 2/2023-Central Tax: Waiver of Late Fees for GSTR-4

Simplified Explanation of Notification No. 2/2023-Central Tax

Purpose: This notification amends the existing provisions related to the waiver of late fees for late filing of GST returns in FORM GSTR-4.

Key Points:

1. Late Fee Waiver:
   • Applicability:
     • This waiver applies to registered persons who failed to file their GSTR-4 returns by the due date for specific periods:
       • Quarters from July 2017 to March 2019.
       • Financial years from 2019-20 to 2021-22.
     • New Provisions:
       • Late Fee Waiver Amount:
         • For these returns filed between April 1, 2023, and June 30, 2023:
           • The late fee payable will be fully waived if the total central tax payable in the return is nil.
           • If there is a central tax payable, the late fee will be waived up to a maximum of ₹250.

2. Example:

Scenario 1:

• Business Details:
  • A registered business failed to file their GSTR-4 for Q2 of 2018-19, which was due on August 31, 2018.
  • They file the GSTR-4 return between April 1, 2023, and June 30, 2023.
• Outcome:
  • If the central tax payable is nil:
    • The entire late fee is waived. They will not need to pay any late fee.
  • If the central tax payable is more than nil:
    • They will need to pay the late fee only up to ₹ Any late fee amount exceeding ₹250 will be waived.

Scenario 2:

• Business Details:
  • Another business failed to file their GSTR-4 for FY 2019-20, which was due on July 31, 2020.
  • They file the GSTR-4 return between April 1, 2023, and June 30, 2023.
• Outcome:
  • If the central tax payable is nil:
    • The entire late fee is waived.
  • If the central tax payable is more than nil:
    • The late fee is capped at ₹ They do not need to pay more than ₹250 as late fee.