Finance Ministry extends Due date for GST Amnesty Scheme

What is the GST Amnesty Scheme?

The GST Amnesty Scheme was first notified to cover periods from July 2017 up to September 2018. A one-time extension to the time limit was provided then. Taxpayers could file these pending returns on or before 31st March 2019.

CBIC implemented the GST Amnesty Scheme for the second time through a notification dated 1st June 2021. It applies to all the pending GSTR-3B returns of previous tax periods between July 2017 and April 2021.

Benefits of GST Amnesty Scheme

• The taxpayers cannot file a particular tax period’s GSTR-3B without filing the previous ones. Moreover, suppose the taxpayer hasn’t filed GSTR-3B for six consecutive tax periods or three consecutive quarters.

• In that case, they may stand the risk of GST cancellation. It can impact their business as clients, or GST registered customers may refrain from dealing with you or cancel contracts making GSTR-3B substantial compliance for the smooth running of the company. 

• The taxpayers will benefit from this relief as they need not pay hefty late fees, which otherwise discourage them from filing any pending GSTR-3B return. 

• Further, it helps taxpayers restore their business after being severely affected by lockdowns and weak economic conditions due to the pandemic.

• The taxpayers will get a concession in the late fee payable under the GST Amnesty Scheme. The maximum late fee is restricted to Rs.1,000 per return (i.e. Rs.500 under CGST and 500 under SGST) for GSTR-3B with any tax liability other than a nil GSTR-3B filing. 

• On the other hand, the maximum late fee payable for a nil GSTR-3B is fixed at Rs.500 per return (i.e. Rs.250 each under CGST and SGST). In other words, the late fee payable for such a return will be lower than the following two amounts. These are the total late fees as calculated under the Act for every day of delay and the maximum late fee as mentioned above.

Consider the following example:

Now, suppose ABC Pvt Ltd hasn’t filed the GSTR-3B of January 2021 due by 20th February 2021 but now wants to file on 2nd August 2021. A late fee as per the Act would have been Rs. 8,150 for 163 days of delay at Rs.50 per day of delay for GSTR-3B with tax liability. But maximum late fee under the scheme is restricted to Rs.1,000 for the return of GSTR-3B for January 2021. So Now, ABC Pvt Ltd is liable to pay a late fee of Rs.1,000 for filing such a return, the tax liability, and the applicable interest under the Act.

GST Amnesty Scheme Due Date Extension

The Finance Ministry has extended the last date for availing the Goods and Services Tax (GST) amnesty scheme where taxpayers pay a reduced fee for late filing of monthly returns, till November 30, 2021.

Earlier the last date for submitting GST returns with reduced late fees was August 31, 2021. 

The Government had provided relief to the taxpayers by reducing or waiving the late fees for non-furnishing Form GSTR-3B for the tax periods from July 2017 to April 2021, if the returns for these tax periods are furnished between June 1, 2021, to August 31, 2021.

The Finance Ministry said that the extension was given on the basis of several representations received from establishments, who requested more time to do the needful.

The due date of filing the application for revocation of cancellation of registration has been extended till September 30, 2021. The actual date for it was August 31, 2021. The extension however would be applicable only in those cases where registrations have been canceled under clause (b) or clause (c) of sub-section (2) of section 29 of the CGST Act.

The extension of the closing date of the late fee amnesty scheme and extension of time limit for filing of an application for revocation of cancellation of registration will benefit a large number of taxpayers, especially small taxpayers, who could not file their returns in time due to various reasons, mainly because of difficulties caused by Covid-19 pandemic, and whose registrations were canceled due to the same.