In 43rd GST Council Meeting held on 28th May 2021, Government has came up with amnesty scheme as well as scheme of rationalization of Late fees to provide relief to taxpayers if they file their GST return beyond the due date. This article covers the relief provided by the government with regard to old GST returns (from July 2017 to Apr 2021) as well as coming GST returns (May 2021 onwards).
1.Amnesty Scheme to provide relief to taxpayers regarding late fee for pending returns
To provide relief to the taxpayers, late fee for non-furnishing FORM GSTR-3B for the tax periods from July, 2017 to April, 2021 has been reduced / waived as under: –
1. Late fee capped to a maximum of Rs 500/- (Rs. 250/- each for CGST & SGST) per return for taxpayers, who did not have any tax liability for the said tax periods;
2. Late fee capped to a maximum of Rs 1000/- (Rs. 500/- each for CGST & SGST) per return for other taxpayers;
The reduced rate of late fee would apply if GSTR-3B returns for these tax periods are furnished between 01.06.2021 to 31.08.2021.
If the return will be filed after 31.08.2021 then the old rate of Late fees i.e. maximum capping of Rs 10,000 will be applicable. It is pertinent to note that if the taxpayer has not made any outward supplies but has the tax liability arises due to reverse charge mechanism then the maximum capping of Late fees would be Rs 1,000 and not Rs 500.
2.Rationalization of late fee imposed under section 47 of the CGST Act:
To reduce burden of late fee on small taxpayers, the upper cap of late fee is being rationalized to align late fee with tax liability/ turnover of the taxpayers, as follows:
A) The late fee for delay in furnishing of FORM GSTR-3B and FORM GSTR-1 to be capped, per return, as below:
(i) For taxpayers having nil tax liability in GSTR-3B or nil outward supplies in GSTR-1, the late fee to be capped at Rs 500 (Rs 250 CGST + Rs 250 SGST)
(ii) For other taxpayers:
a) For taxpayers having Annual Aggregate Turnover (AATO) in preceding year upto Rs 1.5 crore, late fee to be capped to a maximum of Rs 2000 (1000 CGST+1000 SGST);
b) For taxpayers having AATO in preceding year between Rs 1.5 crore to Rs 5 crore, late fee to be capped to a maximum of Rs 5000 (2500 CGST+2500 SGST);
c) For taxpayers having AATO in preceding year above Rs 5 crores, late fee to be capped to a maximum of Rs 10000 (5000 CGST+5000 SGST).
B) The late fee for delay in furnishing of FORM GSTR-4 by composition taxpayers to be capped to Rs 500 (Rs 250 CGST + Rs 250 SGST) per return, if tax liability is nil in the return, and Rs 2000 (Rs 1000 CGST + Rs 1000 SGST) per return for others.
C) Late fee payable for delayed furnishing of FORM GSTR-7 to be reduced to Rs.50/- per day (Rs. 25 CGST + Rs 25 SGST) and to be capped to a maximum of Rs 2000/- (Rs. 1,000 CGST + Rs 1,000 SGST) per return.
All the above proposals to be made applicable for prospective tax periods.