To provide relief to businesses wriggling with the economic impact due to Covid-19, the central government has provided the extension in GST return filing. To give effect to the same, the central government has issued certain notifications. However, from the perusal of the same, it appears that the government intends to provide relief only to certain class of registered person while the remaining registered persons still has to comply the return requirements irrespective of the lockdowns and other disruption caused by the epidemic. The central government vide Notification No. 32/2020-Central tax dt. 03.04.2020 has waived off the late fees w.r.t. GSTR-1 for the month of March, 2020 to May, 2020 and for the Quarter ending on March, 2020 if the registered person files the said return by 30.6.2020. Similarly, vide Notification No. 32/2020- Central Tax dt. 03.04.2020 the late fees for GSTR-3B of February, 2020 to April, 2020 has also been waived, if the same is filed upto the following dates:

Registered Person Having the Turnover in the Preceding Financial Year Months Dates
More than Rs. 5 crores February, 2020 to April, 2020 24.06.2020
Rs. 1.5 crores  to Rs. 5 crores February and March, 2020 29.06.2020
April,2020 30.06.2020
Up to Rs. 1.5 crore February, 2020 30.06.2020
March, 2020 03.07.2020
April, 2020 06.07.2020

Though, the government has provided complete waiver of late fees, however the story is not the same in case of interest. The central government has issued Notification No. 31/2020- Central Tax dt. 03.04.2020 to provide relief from interest due to delay in payment of GST. As per the said notification, no interest shall be levied if the turnover of the person in preceding financial year is upto Rs. 5 crores and he files GSTR-3B on or before the aforesaid dates. However, if the turnover of the registered person is more than Rs. 5 crores, in the preceeding financial year then the exemption from interest on delayed payment is only up to 15 days from the due date and thereafter the interest has to be paid. The rate of interest in the said case has been reduced from the original rate of 18 per cent to 9 per cent p.a. It is further important to note that the benefit of reduced rate of interest is available only if the GSTR-3B for February, 2020 to April, 2020 is filed on or before 24.06.2020. In light of the said notification, it appears that if a registered person whose turnover in preceding financial year exceeds 5 crores wants to avail the exemption from interest then he has to file the GSTR-3B on or before the following dates:

For February, 2020 : 04.04.2020 (15 days from 20.03.2020)
For March, 2020 : 05.05.2020 (15 days from 20.04.2020)
For April, 2020 : 04.06.2020 (15 days from 20.05.2020)

Also please note that for May, 2020, the central government has extended the due dates for filing GSTR-3B. Therefore, no interest or late fee would be charged if the GSTR-3B for May,2020 is filed on or before the said due dates. The extended due dates are as follows:

Registered Persons Having Turnover in Preceding Financial Year States Due Dates
More than 5 crores All 27.06.2020
Up to 5 crores Chhattisgarh, Madhya Pradesh, Gujarat, Maharashtra, Karnataka, Goa, Kerala, Tamil Nadu, Telangana, Andhra Pradesh, the Union territories of Daman and Diu and Dadra and Nagar Haveli, Puducherry, Andaman and Nicobar Islands or Lakshadweep 12.07.2020
Himachal Pradesh, Punjab, Uttarakhand, Haryana, Rajasthan, Uttar Pradesh, Bihar, Sikkim, Arunachal Pradesh, Nagaland, Manipur, Mizoram, Tripura, Meghalaya, Assam, West Bengal, Jharkhand or Odisha, the Union territories of Jammu and Kashmir, Ladakh, Chandigarh or Delhi 14.07.2020

Unlike the erstwhile regime of Indirect Taxes, under GST regime, the tax payment cannot be done without filing GSTR-3B. So, even if the government has waived off the late fees on filing of GSTR-3B beyond the due date, the registered persons would still be compelled to file the same within the prescribed timelines to save the interest cost for the period February, 2020 to April, 2020.Therefore, the extension in times lines for filing the GST returns is merely a hoax.

Conclusion

Any person who is falling under specified category has to identify whether his cost of capital is more then 9%, if yes, then only this option of deferring the payment of tax is viable and that to for a limited period.

Written by  :CA Palash Sharma, Associate at Chir Amrit Legal LLP

Mentored by: Rahul Lakhwani, Advocate, Partner at Chir Amrit Legal LLP

For any queries, kindly contact at: 9560888924, rahul@chiramritlaw.com

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