Notification No. 21/2021 – Central Tax: GSTR-4 Late Fee Relief

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Notification No. 21/2021 – Central Tax: Seeks to rationalize late fee for delay in filing of return in FORM GSTR-4.

[To be published in the Gazette of India, Extraordinary, Part II, Section 3, Sub- section (i)]

G.S.R (E).— In exercise of the powers conferred by section 128 of the Central Goods and Services Tax Act, 2017 (12 of 2017) (hereafter in this notification referred to as the said Act), the Government, on the recommendations of the Council, hereby makes the following further amendments in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 73/2017– Central Tax, dated the 29^th December, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 1600(E), dated the 29^th December, 2017, namely: —

In the said notification, after the fourth proviso, the following proviso shall be inserted, namely: —

“Provided also that the total amount of late fee payable under section 47 of the said Act for financial year 2021-22 onwards, by the registered persons who fail to furnish the return in FORM GSTR-4 by the due date, shall stand waived -

which is in excess of two hundred and fifty rupees where the total amount of central tax payable in the said return is nil;

which is in excess of one thousand rupees for the registered persons other than those covered under clause (i).”.

(Rajeev Ranjan)
Under Secretary to the Government of India

Note: The principal notification No. 73/2017– Central Tax, dated the 29^th December, 2017 was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub- section (i) vide number G.S.R. 1600(E), dated the 29^th December, 2017 and was last amended vide notification number 93/2020 – Central Tax, dated the 22^nd December, 2020, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 785(E), dated the 22^nd December, 2020.

📚 Frequently Asked Questions (FAQs): Notification No. 21/2021 – Central Tax

Q1: What is Notification No. 21/2021 – Central Tax about?

Answer:
Notification No. 21/2021 – Central Tax rationalizes the late fee for filing FORM GSTR-4, which is the annual return for taxpayers under the GST Composition Scheme. The change aims to reduce compliance burden on small businesses.

Q2: Who needs to file GSTR-4?

Answer:
GSTR-4 is filed by composition taxpayers, i.e., small businesses and service providers who have opted for the GST Composition Scheme. This scheme offers simplified tax compliance with lower rates of tax but requires an annual return.

Q3: What is the new late fee structure under Notification No. 21/2021 – Central Tax?

Answer:
The notification rationalizes late fees as follows:
₹25 per day of delay (CGST + SGST/UTGST = ₹50)
Maximum cap = 0.02% of turnover in the State/UT, subject to ₹1,000 per return

Q4: How does this differ from the old late fee provisions?

Answer:
Earlier, the late fee had no rationalized cap, which often burdened small taxpayers with heavy penalties. With this notification, the fee is capped, ensuring fairness.

Q5: From which period does this rationalized fee apply?

Answer:
The revised late fee applies for GSTR-4 filings from the financial year 2021-22 onwards.

Q6: Why is this rationalization important for small businesses?

Answer:
✅ It prevents excessive penalties.
✅ Encourages compliance.
✅ Supports MSMEs by reducing financial stress.
This aligns with government efforts to ease GST filing for smaller taxpayers.

Q7: What happens if a composition taxpayer still delays filing GSTR-4?

Answer:
The taxpayer must pay the rationalized late fee as notified. While it is reduced, repeated delays may attract notices or cancellation of GST registration.

Q8: How can composition taxpayers avoid late fees in the future?

Answer:
Mark due dates in compliance calendars.
Take help from GST professionals.
Use digital tools or reminders for timely filing.
Outsource GST tasks to experts for hassle-free compliance.

Q9: Are there similar notifications for other returns?

Answer:
Yes. For example:
Notification No. 22/2021 rationalized late fees for GSTR-7.
Notification No. 20/2021 rationalized late fees for GSTR-3B and GSTR-1.

Q10: Where can businesses find expert help in managing GST compliance?

Answer:
Businesses can rely on Finodha’s services for:
GST Compliance
GST Return Filing
MSME Registration
Private Limited Company Registration
Setup Business

🔑 Summary

Notification No. 21/2021 – Central Tax rationalizes the late fee for GSTR-4 filings. Now, composition taxpayers will pay ₹25/day up to a maximum of 0.02% of turnover or ₹1,000, whichever is lower. This change reduces the burden on small businesses, ensuring fair compliance and promoting ease of doing business under GST.