Introduction:

1. In the wake of coronavirus and observation of lockdown all over the world, businesses have affected the way they used to carry their business. In India, particularly, the cashflows of the corporates are badly affected due to the slowdown of the overall economy due to humongous changes of laws in various areas which has badly affected certain sectors. When the Industry expects the Government to provide some relief in particular, on GST front, the Government has provided some reliefs which are discussed here asunder.

2. Accordingly, in this insight we have shared our views on certain clarifications which the Government has issued by way of Notifications & circular which has is in line with the ordinance passed by the President of India and relaxation announced by the Hon’ble Finance Minister.

Extension of due dates on the filing of GSTR-3B & Waiver of Interest, Late Fees:

3. The Government has not extended due dates for filing returns except for few cases. However, the Government has prescribed[1] waiver of interest and late fees in different cases whereas encapsulated here as under:

Summary of due dates of filing of GSTR-3B, late fees & interest for the period from

February 2020 to May 2020

Category Tax Period Original Due Date Revised Due Dates Revised Late fee Revised rate of Interest  

 

Ref

T/o > Rs 5 crores Feb-20 20.03.20 20.03.20 NIL Till     04.04.20 – Nil

After 04.04.20 – 9%

 

 

 

Note ii

Mar-20 20.04.20 20.04.20 NIL Till     04.05.20 – Nil

After 04.05.20 – 9%

Apr-20 20.05.20 20.05.20 NIL Till     04.06.20 – Nil

After 04.06.20 – 9%

May-20 20.06.20 Note iii 50 18%
T/o between
Rs. 1.5 crores to 5 crores
Feb-20 22.03.20 29.06.20 NIL After 29.06.20 – 18%  

 

 

Note i

Mar-20 22.04.20 29.06.20 NIL After 29.06.20 – 18%
Apr-20 22.05.20 30.06.20 NIL After 30.06.20 – 18%
May-20 22.06.20 Note iii 50 18%
T/o < Rs. 1.5 crores Feb-20 22.03.20 30.06.20 NIL After 30.06.20 – 18%
Mar-20 22.04.20 03.07.20 NIL After 03.07.20 – 18%
Apr-20 22.05.20 06.07.20 NIL After 06.07.20 – 18%
May-20 22.06.20 Note iii 50 18%

Notes:

i. In the case of Taxpayer having turnover of more than Rs. 1.5 Crore but less than Rs. 5 Crore and turnover of less than Rs. 1.5 Crore the reduced rate of interest and late fees shall be applicable if the returns for the said period are filed within respective due dates.

ii. In case of Taxpayer having turnover of more than Rs. 5 Crore, the reduced rate of interest, late fees and moratorium of 15 days shall be only applicable if the taxpayer files the returns for the said period by 24.06.2020. However, in case the taxpayer fails to file the same within the said date then he shall be liable to pay interest @ 18% p.a. 

iii. Subject to the above extension of time limit to pay GST and file returns in form GSTR 3B from February 2020 to April 2020 as given above, the Government has extended[2] the time limit for filing of Form GSTR 3B for May 2020 as well for taxpayer whose aggregate turnover is below Rs. 5 Crores. The extension has been given in the table below for May 2020:

S.N. Turnover States Due Date
1 T/o < Rs 5 Crores Principal place of business is in the States of 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
2 Principal place of business is in the States of 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
3 T/o > Rs 5 Crores All States 27.06.2020

Waiver of Late Fees on GSTR-1:

4. Late fee is payable for delayed filing of GSTR-1 which has been completely waived[3] for the tax period March, 2020 till May, 2020 with a condition that the said returns shall be filed by 30.06.2020.

KSAA Analysis

5. The relief provided by way of reduced interest on the filing of GSTR-3B and waiver of late fees for filing of GSTR-1 may seem to be very beneficial such class of person whose turnover is below Rs 5 Crore. However, it may be challenging for MSME and large corporates.

6. The sudden slowdown has led to poor payment cycles, slow production and contribution towards social well-being will bring tough times for corporates as it would bring cash flow issues. However, the extension of due dates was also not an option as it will stop the entire economy. However, coming future is going to be tough for corporates and we hope that the department may not resort to coercive means for recovering GST dues i.e. tax portion.

7. As per the circular mentioned above, illustration for interest liability in case of a delayed payment of GST for taxpayers with turnover above Rs 5 Crores for March 2020:

Sr No Date of  filing  GSTR-3B No. of days  of delay Whether  condition  for reduced interest is fulfilled? Interest Rate Late Fees for GSTR 3B and GSTR 1
1 02.05.2020 11 Yes NIL NIL
2 20.05.2020 30 Yes Zero interest for 15 days + interest rate @9% p.a. for 15 days NIL
3 20.06.2020 61 Yes Zero interest for 15 days + interest rate @9% p.a. for 46 days NIL
4 24.06.2020 65 Yes Zero interest for 15 days + interest rate @9% p.a. for 50 days NIL
5 30.06.2020 71 No Interest rate @18% p.a. for 71 days (i.e. no benefit of reduced interest) Late Fees for 71 days for GSTR 3B
6 01.07.2020 72 No Interest rate @18% p.a. for 72 days (i.e. no benefit of reduced interest) Late Fees for 72 days for GSTR 3B & GSTR-1[4]

Availment of ITC as per GSTR 2A:

8. A welcome move by way of providing relaxation[5] to the taxpayers while availing ITC for the months from February 2020 to August 2020. Accordingly, a proviso has been inserted to provide that the said restriction of availment up to 10% of unmatched ITC [Unmatched ITC = ITC as per books – ITC as per 2A] shall not apply to ITC availed in FORM GSTR-3B for the tax period of February 2020 to August, 2020. However, the cumulative effect of the same would be provided in FORM GSTR-3B for the tax period of September, 2020.

Illustration:

GSTR-3B filing summary along with ITC details of M/s. A Ltd for the period February 2020 to September 2020 is tabulated here as under:

Return Period GSTR 2A ITC as per Books GSTR 3B Excess/(Short) Availed
Feb, 2020 100 120 120 20
Mar, 2020 150 170 170 20
April, 2020 130 140 140 10
May, 2020 100 90 90 (10)
June, 2020 120 125 125 5
July, 2020 130 140 140 10
August, 2020 100 150 150 50
Total 830 935 935 105
September, 2020 120 150 15 (105)
Total 950   950

In the above illustration, before the said notification, A Ltd. was availing ITC of those invoices which matched with GSTR-2A. However, after the notification, A Ltd. has availed full ITC in GSTR 3B as per its books from Feb, 2020 to August, 2020. Further, when it is supposed to file GSTR 3B for September, 2020 it has availed Rs. 15 only even though the ITC of Rs. 120 is matched with GSTR 2A. This is because, as per the said notification in September, 2020 A Ltd. should avail ITC of only those invoices right from Feb, 2020 till September, 2020 which is reflected in GSTR-2A.

KSAA Analysis

9. This means that, the restriction of availing ITC matching with GSTR 2A is kept in abeyance till the returns for September, 2020 is filed. The said notification when read with circular states that, while filing GSTR 3B for September, 2020 a reconciliation of GSTR 2A with the ITC for February, 2020 to September, 2020 shall be done and accordingly ITC needs to be availed. This may be kept in mind, that with this amendment, where ITC is taken in excess of GSTR-2A, no reversal of such excess ITC shall be done for the said period.

10. GSTR-3B returns for September 2020 would be very crucial as the instant tax period will carry due dates for many aspects which are elaborated hereunder-

√ Amendments/Addition of invoices pertaining to FY 2019-20

√ Debit notes & Credit notes pertaining to FY 2019-20

√ ITC availment for the period pertaining to FY 2019 -20

√ Reconciliation of GSTR-2A with GSTR-3B for the period from Feb 2020 to August 2020

To add to the burden of the taxpayers, the due dates for GST Audit for the FY 2018-19 is 30.06.2020 which in our opinion may be extended if status quo over existing affairs is not assumed till 30th April 2020.  We expect there may be further amendments since there are too many deadlines for the taxpayers on one single tax period especially where there is no clarity when the world will be able to come out of this pandemic.

The moratorium for Legal, Procedural compliances by taxpayers including the extension of E-way Bills:

11. The Government has prescribed[6] that in the following cases, the time limit shall be extended upto 30.06.2020:

(a) completion of any proceeding or passing of any order or issuance of any notice, intimation, notification, sanction or approval or such other action, by whatever name called, by any authority, commission or tribunal, by whatever name called, under the provisions of the Acts stated above; or

(b) filing of any appeal, reply or application or furnishing of any report, document, return (ISD return, TDS returns, TCS returns and Non-Resident Taxable person), statement or such other record, by whatever name called, under the provisions of the Acts stated above;

12. The above extension of time-limit shall not be applicable for filing of returns, principles of issue of invoice, search & seizure, arrest provisions, E-way bills under GST.

13. Further, in case of E-Way bills issued for movement of goods where the expiry of E-Way bill is during 20.03.2020 to 15.04.2020, the validity of e-way bills shall be deemed to be extended upto 30.04.2020[7].

Moratorium for Composition Dealer:

14. Every composition dealer under the Rule 3 of the CGST Rules is required to intimate on the GST portal in Form GST CMP 02 that he opts for composition scheme for that particular Financial Year. He is required to intimate prior to the beginning of the Financial Year. The government has prescribed[8] that for the FY 2020-21, he can intimate upto 30th June 2020 in Form CMP 02. Further, he is also been allowed to file a statement of stock held as on 31.03.2020 in Form ITC 03 upto 31.07.2020 for the purpose of reversal of ITC.

15. Certain class of persons were qualified as composition dealer wherein they were required to pay tax under FORM GST CMP 08 and were required to file FORM GSTR-4. For the quarter ending 31st March, 2020 the tax should be paid[9] till 7th July 2020 & FORM GSTR-4 should be filed till 15th July 2020.

16. In case of any clarification/queries, please feel free to contact the undersign:

CA. Kevin Shah Adv. Deep Shah CA. Rovin Kothari
kevin.shah@ksaa.co.in deep.shah@ksaa.co.in rovin.kothari@ksaa.co.in

————————

[1] Notification No. 31/2020-CT dated 03.04.2020 & Notification 32/2020-CT dated 03.04.2020

[2] Notification No 36/2020 –CT dated 03.04.2020

[3] Notification 33/2020-CT dated 03.04.2020

[4] Circular 136/06/2020-GST dated 03.04.2020 [Q.3, Q.4, Q.5 & Q.6]

[5] Proviso inserted to Rule 36(4) by way of Notification 30/2020 dated 03.04.2020 read with Circular 136/06/2020-GST dated 03.04.2020  [Q.7]

[6] Notification 35/2020 –CT dated 03.04.2020  read with Circular 136/06/2020-GST[Q.9, Q.10 & Q.11]

[7] Circular 136/06/2020-GST dated 03.04.2020 [Q.8]

[8] Notification 30/2020 –CT dated 03.04.2020

[9] Notification 34/2020 –CT dated 03.04.2020 read with Circular 136/06/2020 dated 03.04.2020 [Q.1]

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