GST

GSTR-3A Notice for Defaulters of GST Return Filing

As notified by the Central Board of Indirect Taxes and Customs (CBIC), the registered taxpayers under the GST regime are required to file monthly, quarterly, or annual returns, as the case may be. This is a mandatory requirement that has been imposed on the taxpayers, and the effective implementation of these regulations requires stern actions against the defaulters. Thus, non-compliance attracts consequences in the form of a notice the concerned tax authorities served on the defaulting taxpayers, along with late fees or penalties. This notice has been mandated by the law in the form of GSTR-3A to be served to ensure the fiscal liability’s compliance and discharge. In this article, we will delve into the issues concerning the notice of GSTR-3A and try to understand the circumstances under which this notice may be served on the taxpayer and what are the consequences of not complying with the said notice.

GSTR-3A

First, Let us clarify that GSTR-3A is not a form of return but a notice. The non-compliance of the regulations concerning filing returns by registered taxpayers attracts certain consequences, and one such major consequence is the notice of GSTR-3A. Thus, the notice of GSTR-3A is issued to a taxpayer who has failed to file his GST Return for a period.

Under the GST regime, registered taxpayers have been classified into various categories, as per which they are required to file their returns using different prescribed forms. These forms are to be filed within the stipulated periods. Delay in filing or non-filing of these returns will attract late fees, penalties, and a notice of GSTR-3A.

Thus, GSTR-3A is a form of notice that is issued by the government or the concerned authorities on the defaulters for non-filing of GST Returns.

Classification of Notice of GSTR-3A

Notice of GSTR-3A can be classified under the following two categories:

• Notice to file Pending GST Return: Under the first category, the concerned official allows the defaulting taxpayer to file any pending GST Returns with penalty or interest. Apart from this, no further communication is made to the defaulter on behalf of the authorities, and once the return is filed, the notice stands withdrawn.
• Notice of Cancellation of GST Registration: Suppose the defaulting taxpayer has still not complied with the direction of the notice issued within the stipulated time period. In that case, a further notice in the Form of GST-REG-17 may be issued by the concerned department demanding to show cause as to why his Registration should not be cancelled.

Serving of GSTR-3A Notice

The concerned tax authorities issue a notice under GSTR-3A to the taxpayers who have failed to file the following returns:

• GSTR-3B: Summary of sale and purchase
• GSTR-4:Composition Dealer
• GSTR-5:  Non-Resident Taxpayer
• GSTR-6: Input Service Distributor (ISD)
• GSTR-7:TDS Deductor
• GSTR-8:TCS collector
• GSTR-9:Annual Return
• GSTR-10: Final Return

Statutory Provision

The notice of GSTR-3A finds a mention in the Central Goods and Services Act, 2017 (CGST Act). Section 46 Of the CGST Act 2017 provides for a “Notice to return defaulters”. The statutory provision reads as follows:

“Where a registered person fails to furnish a return under section 39 or section 44 or section 45, a notice shall be issued requiring him to furnish such return within fifteen days in such form and manner as may be prescribed.”

Duty of Taxpayer After Receiving GSTR-3A Notice

Therefore, as per the provision stated above, when a notice under GSTR-3A is served on a defaulting taxpayer, he is required to file the GST return, along with the late fee and penalty, within 15 days from the date of issue of such notice.

Can the GST return be filed after the expiry of 15 days?

A question arises: Where the defaulting taxpayer has failed to file the return even after 15 days of the issue of notice, can he still be allowed to file the return? There is a provision for the defaulting taxpayer to file a return even after the expiry of the 15 days but before the application of section 62 of the CGST Act, 2017. In that case, the notice will be deemed to be withdrawn.

Consequences of not filing a return even after the Issuance of Notice

Suppose the defaulting taxpayer fails to file the GST return within the stipulated time, even after the issuance of notice under GSTR-3A. In that case, the prescribed authority may proceed to undertake any of the following actions:

• Assessment of non-filer of returns: Section 62 of the CGST Act 2017 will be attracted, under which the concerned assessing officer will evaluate the tax liability on the basis of the limited information available to the concerned authority and by applying the best judgment assessment method.
• Penalty: In addition to the tax so assessed by the authorities, a penalty of Rs. 10,000/- or 10% of the tax due, whichever is higher, will be applied to the defaulting taxpayer.
• No subsequent filing of Returns: If the defaulter does not file any GST Return, then he or she will not be allowed to file any other subsequent return.
• Cancellation of Registration: In extreme scenarios, where the defaulting taxpayer fails to file GST returns for an incessant period of 6 months (or in the case of a composite taxpayer, failure to file a return is for three quarters), then it may also lead to the cancellation of the defaulting taxpayer’s GST Registration.
• Initiation of Prosecution: If the defaulter still fails to file the respective GST Return, then the department may initiate prosecution against the defaulter. Therefore, it becomes imperative for every taxpayer to comply with the GST norms in order to avoid any legal consequences.

Applicable Penalty & Late Fees

Interest	An Interest @ 18% per annum has to be paid by the defaulter, which must be calculated on the amount of outstanding tax to be paid and from the next day of filing till the date of payment.
Late Fees	The late fee for filing a return is Rs. 200/day (Rs. 100/- under CGST and Rs. 100/- under SGST), however, subject to a maximum of Rs. 5000/-. In the case of annual returns, the maximum late fee is subject to 0.25% of the turnover in the state.

Steps to Download Form GSTR-3A

In order to view and download the form GSTR-3A, the taxpayer may undertake the following actions:

• Log in to your GST Portal¹ by providing your credentials.
• Navigate to “Services” and click on “User Services”.
• Next, click “View Notices and Orders” and Download to generate the Form GSTR-3A Notice.

Format of GSTR-3A

In accordance with Rule 48 of the CGST, Form GSTR-3A is issued as a notice to the taxpayers defaulting on the return under Section 42 of the CGST Act, 2017 and the defaulters of return filing whose registration has been cancelled under Section 46 of the CGST Act, 2017.

Draft Format

The format of GSTR-3A is as follows:

No Business Transaction

The registered taxpayers have been mandated to file GST Returns even if there has been no business transaction or the business has stopped. In such a scenario, the taxpayer is also required to file the pending GST returns, especially on receiving the notice under GSTR-3A.

Case of Inoperative Business

In case the business is no longer in operation, the registered taxpayer shall file the pending return for the relevant period and then may apply for cancellation of registration.

Case of NIL Transactions

In case the business has recorded no transaction during a particular period, then such a business shall file a NIL Return and may apply to discontinue the GST Compliance.

Conclusion

The GST return is an essential component of the new tax regime as it contains the particulars of the income generated on which the registered taxpayer is obligated to file tax to the government. The due date and the type of return to be filed vary on the basis of the type of taxpayer. The non-conformity of the regulations concerning the filing of returns by registered taxpayers attracts certain consequences, and one such major consequence is the notice of GSTR-3A. The notice of GSTR-3A is issued to a taxpayer who failed to file his GST Return for a period, failing which he may be liable to pecuniary penalties and adverse consequences. Therefore, a taxpayer should file his GST returns for the month or the quarter, whatever the case may be, even if there have been no business transactions recorded during that particular period, in order to avoid any serious legal consequences, including pecuniary penalties. However, if you still find yourself caught in the web of intricate web taxation, you may take expert advice or hire professional help.

If you wish to know more about GST Returns, you may contact Enterslice.

FAQs:

1. https://www.gst.gov.in/