Notification No. 20/2021 – Central Tax (Late Fee Cap for GSTR-1)

Notification No. 20/2021 – Central Tax dated 01 June 2021, issued under Section 128 of the CGST Act, 2017, provides a partial waiver of late fee leviable under Section 47 for delayed furnishing of FORM GSTR-1. The relief is granted by prescribing a maximum cap on late fee payable, and any late fee beyond such limit stands waived.

The notification amends Notification No. 4/2018 – Central Tax by insertion of an additional proviso specifying the maximum late fee payable for delayed filing of GSTR-1.

Statutory Basis and Scope

• Issued under Section 128 (power to waive late fee wholly or partly).
• Applies to late fee leviable under Section 47 of the CGST Act.
• Applicable only to FORM GSTR-1 (statement of outward supplies).
• Relief provided by introducing a maximum cap on late fee, not by complete waiver.

Applicability

• Applicable from tax period June 2021 onwards.
• For quarterly filers (QRMP), applicable from quarter ending June 2021 onwards.
• Covers FY 2021-22 and all subsequent periods.
• Prospective in operation.
• Not applicable to periods prior to June 2021.

Late Fee Cap Prescribed

(Corresponding SGST notification provides identical limits; total late fee equals CGST + SGST.)

How the Late Fee Cap Operates

• GSTR-1 is not furnished by the due date prescribed under Rule 59.
• Late fee begins to accrue under Section 47 for each day of delay.
• The late fee payable for that return cannot exceed the prescribed cap.
• Once the cap is reached, no further late fee accrues for that return.
• The cap applies separately for each tax period (each GSTR-1 return).

Important Clarification

• The cap is not annual or cumulative.
• It applies independently to each delayed GSTR-1 return.
• If multiple periods are filed late, the cap applies separately to each period.

Limitations

• Does not provide complete waiver of late fee.
• Does not modify due dates prescribed under Rule 59.
• Does not grant COVID-based or force-majeure relief.
• No sunset clause; the capped late-fee regime continues to apply till date, subject to amendment or rescission.

Statutory Effect

For GSTR-1 returns from June 2021 onwards, late fee under Section 47 is payable only up to the maximum amount prescribed in Notification No. 20/2021-CT, and any late fee beyond such limit stands waived under Section 128.