Important Keyword: Notification No. 89/2020 – Central Tax, GST penalty waiver 2020, Section 125 CGST Act, Section 128 CGST Act, e-invoicing penalty relief, QR code GST compliance, GST penalty exemption March 2021, Notification 14/2020 compliance, GST Council 2020 updates, Finodha GST Compliance Services,
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[F. No-CBEC-20/16/38/2020-GST]
Government of India
Ministry of Finance
(Department of Revenue)
Central Board of Indirect Taxes and Customs
New Delhi, the 29th November, 2020
Notification No. 89/2020 – Central Tax: Seeks to waive penalty payable for noncompliance of the provisions of notification No.14/2020-Central Tax, dated the 21st March, 2020.
[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 penalty payable by any registered person under section 125 of the said Act for non- compliance of the provisions of notification No.14/2020 – Central Tax, dated the 21st March, 2020, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 197(E), dated the 21st March, 2020, between the period from the 01st day of December, 2020 to the 31st day of March, 2021, subject to the condition that the said person complies with the provisions of the said notification from the 01st day of April, 2021.
(Pramod Kumar)
Director,
Government of India
📚 Frequently Asked Questions (FAQs): Notification No. 89/2020 – Central Tax
Q1: What is Notification No. 89/2020 – Central Tax about?
Answer:
Notification No. 89/2020 – Central Tax waives penalties under Section 125 of the CGST Act for non-compliance with Notification No. 14/2020 – Central Tax between 1st December 2020 and 31st March 2021.
This means if a taxpayer failed to follow the conditions laid out in Notification 14/2020 during that period, no penalty will be charged, provided compliance is completed by 1st April 2021.
Q2: What is Notification No. 14/2020 – Central Tax?
Answer:
Notification No. 14/2020 – Central Tax, dated 21st March 2020, introduced provisions related to the implementation of e-invoicing and QR code requirements for specific classes of registered persons.
Many businesses faced technical challenges in adapting to this system, hence the government later issued Notification No. 89/2020 to waive penalties for temporary non-compliance.
Q3: What is the time period covered under this penalty waiver?
Answer:
The waiver covers the period from 1st December 2020 to 31st March 2021.
If compliance under Notification 14/2020 was not fulfilled during this period, the penalty is waived as long as the taxpayer complies by 1st April 2021.
Q4: Which section of the CGST Act gives power to waive penalties?
Answer:
The waiver has been granted under Section 128 of the CGST Act, 2017, which allows the Central Government, on the recommendation of the GST Council, to reduce or waive any penalty payable under the Act.
Q5: What kind of penalties are waived under this notification?
Answer:
The penalties waived are those payable under Section 125 of the CGST Act, which imposes a general penalty up to ₹25,000 for contravention of GST provisions not specifically covered under other penalty sections.
Q6: What are the conditions to avail the penalty waiver under Notification No. 89/2020?
Answer:
To benefit from the waiver:
✅ The taxpayer must comply with the requirements of Notification No. 14/2020 by 1st April 2021.
✅ Non-compliance should have occurred only during 1st Dec 2020 – 31st Mar 2021.
✅ The taxpayer should be registered under GST and not under cancellation or suspension during the said period.
Q7: What is the objective behind this notification?
Answer:
The government issued this notification to:
Provide relief to taxpayers struggling with new e-invoicing and QR code compliance,
Encourage timely rectification without punitive measures, and
Maintain continuity of business during COVID-19 recovery.
💡 It reflects the government’s supportive approach to GST compliance rather than immediate penal action.
Q8: What happens if a taxpayer still fails to comply by 1st April 2021?
Answer:
If the taxpayer doesn’t comply with Notification 14/2020 even after 31st March 2021, the penalty under Section 125 becomes applicable from 1st April 2021 onward.
Hence, prompt compliance before this date was crucial to avoid fines.
Q9: Which types of taxpayers benefit from this notification?
Answer:
The benefit applies to all registered taxpayers who were required to follow e-invoicing or QR code-related provisions under Notification 14/2020 but couldn’t comply due to:
Technical challenges in e-invoicing software,
Lack of system readiness, or
Pandemic-related disruptions.
Q10: Does this notification provide any late fee waiver?
Answer:
No, this notification specifically waives penalties, not late fees.
However, related relief notifications like No. 52/2020 – Central Tax provided late fee relaxations for other returns during the pandemic.
Q11: How is this notification linked to the e-invoicing system?
Answer:
Notification No. 14/2020 dealt with QR code and e-invoicing mandates for certain businesses.
Notification No. 89/2020 indirectly supports those businesses by waiving penalties for initial non-compliance, allowing them time to align their systems with GST e-invoicing.
📄 Need e-invoicing setup help? Visit Finodha GST Compliance Services.
Q12: What is Section 125 of the CGST Act?
Answer:
Section 125 is a general penalty clause that covers contraventions where no specific penalty is provided.
It empowers authorities to levy up to ₹25,000 for non-compliance with GST notifications or rules — which is exactly the type of penalty waived under this notification.
Q13: How does this notification impact small and medium enterprises (SMEs)?
Answer:
SMEs that struggled to implement QR codes or e-invoicing systems benefited significantly.
It prevented unnecessary fines while giving them sufficient time to upgrade to GST-compliant invoicing tools.
Finodha offers affordable GST setup services for MSMEs looking to modernize their systems.
Q14: How can businesses ensure compliance after this waiver?
Answer:
To stay compliant:
✅ Implement e-invoicing and QR code systems properly.
✅ Verify GSTIN and invoice formats regularly.
✅ File GSTR-1 and GSTR-3B returns accurately.
✅ Conduct internal GST audits before deadlines.
🚀 Simplify your compliance with Finodha GST Return Filing.
Q15: Does this notification apply automatically or require an application?
Answer:
The waiver is automatic — businesses do not need to apply separately.
If you met the compliance condition (by 1st April 2021), no penalty under Section 125 would be levied.
🏁 Conclusion
Notification No. 89/2020 – Central Tax is a significant relief measure aimed at supporting businesses struggling with the implementation of e-invoicing and QR code requirements during the pandemic period.
By waiving penalties for temporary non-compliance, it promoted voluntary compliance and smoother GST system adoption.
💡 Ensure your GST systems are compliant with all current notifications. Start your GST Return Filing today with Finodha.
Download PDF: Notification No. 89/2020 – Central Tax
More Information: https://taxinformation.cbic.gov.in/
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