Notification No. 22/2021 – Central Tax: Late Fee Rationalized

Want to File ITR, GST Returns & Pvt. Ltd. Registration

Notification No. 22/2021 – Central Tax: Seeks to rationalize late fee for delay in filing of return in FORM GSTR-7.

[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 waives the amount of late fee payable under section 47 of the said Act by any registered person, required to deduct tax at source under the provisions of section 51 of the said Act, for failure to furnish the return in FORM GSTR-7 for the month of June, 2021 onwards, by the due date, which is in excess of an amount of twenty-five rupees for every day during which such failure continues:

Provided that the total amount of late fee payable under section 47 of the said Act by such registered person for failure to furnish the return in FORM GSTR-7 for the month of June, 2021 onwards, by the due date, shall stand waived which is in excess of an amount of one thousand rupees.

(Rajeev Ranjan)
Under Secretary to the Government of India

📚 Frequently Asked Questions (FAQs): Notification No. 22/2021 – Central Tax

Q1: What is Notification No. 22/2021 – Central Tax about?

Answer:
Notification No. 22/2021 – Central Tax, issued on 1st June 2021, rationalizes the late fee for taxpayers filing FORM GSTR-7. It sets a cap of ₹25 per day of delay, subject to a maximum of ₹1,000 per return
notfctn-22-central-tax-english-….

Q2: Who is affected by this notification?

Answer:
This notification applies to registered persons required to deduct tax at source (TDS) under section 51 of the CGST Act, 2017. Such persons file GSTR-7 and often faced higher late fees before this rationalization.

Q3: What is GSTR-7 and why is it important?

Answer:
GSTR-7 is a monthly return filed by TDS deductors under GST. It captures details of tax deducted, liability to the government, and issuance of TDS certificates. Timely filing ensures smooth GST compliance and avoids penalties. Learn more about GST compliance here.

Q4: How has the late fee structure changed under Notification No. 22/2021 – Central Tax?

Answer:
Earlier, the late fee under section 47 of the CGST Act was higher. Post this notification:
Late fee = ₹25/day for each day of delay.
Maximum late fee = ₹1,000 per return (June 2021 onwards).

Q5: From when is the rationalized late fee applicable?

Answer:
The reduced late fee structure applies to GSTR-7 filings for June 2021 onwards.

Q6: How does this benefit taxpayers?

Answer:
Benefits include:
Reduced compliance cost 💰
Relief for TDS deductors struggling with high late fees
Encouragement to stay GST-compliant without fear of excessive penalties

Q7: Does this mean there is no late fee at all?

Answer:
No ❌. The late fee is not completely waived. Taxpayers will still pay ₹25/day of delay, but total liability is capped at ₹1,000 per return.

Q8: How can businesses ensure timely GSTR-7 filing to avoid late fees?

Answer:
Businesses can:
Maintain proper tax deduction records
Use professional help from GST experts
Automate compliance through software tools
Set reminders for return filing due dates

Q9: Can late fee still be waived under special circumstances?

Answer:
Yes ✅. In extraordinary cases like COVID-19 lockdowns, the government has provided amnesty schemes and additional relaxations through other notifications (e.g., Notification No. 33/2021 on GSTR-3B Amnesty).