To,
The [Designation],
[Office/Department Name],
[Office Address]

Subject: Reply to Notice for Imposing Penalty for Non-Filing of Annual Return for Finance Year …………….. under Section 125 of the CGST Act, 2017

Dear Sir/Madam,

I am writing in response to the notice issued by your esteemed office Dated ………… regarding the imposition of penalty for the non-filing of the annual return for the financial year ………………………. under Section 125 of the CGST Act, 2017.

Upon thorough review of the notice and relevant provisions of the CGST Act, 2017, particularly Section 125, I wish to bring to your attention that Section 47 of the CGST Act specifically provides for the levy of late fees for failure to furnish returns within the prescribed time.

As per Section 47(2) any registered person who fails to furnish the return required under section 44 by the due date shall be liable to pay a late fee of one hundred rupees for every day during which such failure continues subject to a maximum of an amount calculated at a quarter per cent. of his turnover in the State or Union territory. Further, by Notification No. 07/2023–Central Tax Dated ………….. it is notified that Registered persons having an Aggregate turnover of up to five crore rupees in the relevant financial year who fail to furnish the return by the due date shall pay Twenty-five rupees per day, subject to a maximum of an amount calculated at 0.02 per cent. of turnover in the State or Union territory.

Section 125 of the CGST Act pertains to “General penalty” and does not explicitly cover the non-filing of annual returns. Therefore, it is my understanding that the penalty cannot be imposed under Section 125 for the non-filing of the annual return.

Furthermore, considering the specific provision under Section 47 for the levy of late fees, it is respectfully submitted that any penalty imposed for non-filing of the annual return should be in accordance with the provisions of Section 47.

I would like to request your kind reconsideration of the imposition of penalty under Section 125 and urge the department to levy late fees, if applicable, in accordance with the provisions of Section 47 of the CGST Act.

I assure you of my commitment to comply with all GST regulations and to ensure timely filing of returns in the future.

Thank you for your attention to this matter. I remain at your disposal for any further clarification or information you may require.

Yours Sincerely,

For M/s. [Your Company Name]
[Authorized Signatory’s Name]
[Designation]
Mobile: ………………………….
E-mail: ………………………….
Date: …………………..
Place: ………………….