Summary of GSTR 3B Compliance post the 40th GST Council Meeting (Due dates, Interest and Late fees)

The 40th GST Council meeting took place on 12^th June, 2020 via video conference, chaired by the Union Finance Minister Smt. Nirmala Sitharaman. Significant relief measures in terms of late fee and interest waivers were made. This is the first meeting that has taken place since the COVID-19 pandemic outbreak in India, and the resulting lockdown. In this article I summarize the key takeaways from this meeting. Do refer to the chart at the end for a quick and easy summary

To ease the burden on taxpayers, the Council has made the following recommendations

1) Reduction/Waiver in Late fees for non-furnishing of returns in Form GSTR 3B for the tax period July 2017 to Jan 2020 if such returns are furnished between 1st July 2020 and 30th September 2020.

a) Taxpayers with nil tax liability are not required to pay any late fee.

b) If there is any tax liability, late fees will be capped at Rs 500 per return (i.e. maximum late fees will be Rs 500 per return)

2) Further relief for small taxpayers (aggregate turnover up to Rs 5 crores) for late filing of returns in Form GSTR 3B for period Feb 2020 to July 2020.

a) For February, March and April 2020 tax periods:

Reduction in rate of interest for late furnishing of returns for the said months beyond specified dates (staggered up to 6^th July, 2020) from 18% p.a. to 9% p.a. provided such returns are furnished up to 30^th Sept, 2020.

Note: Interest is only payable if there is tax liability. If tax is paid up to specified dates (staggered up to 6th July, 2020) then there would be no Interest liability.

b) For May, June and July 2020 tax periods:

Waiver of late fees and interest for late furnishing of returns for the said months, provided such returns are filed up to 30^th Sept, 2020 (staggered dates to be notified soon). Thus, in other words, For May, June and July 2020, the due dates for filing returns have been extended up to 30th September 2020.

3) One-time extension for restoration of cancelled GST registration:

Period for filing application of revocation for cancelled GST registrations extended till 30th September 2020, in all cases where registrations have been cancelled till 12th June 2020. The original time limit, as per GST Act, was thirty days from the date of issue of the cancellation order.

4) Further, discussions on GST compensation to states and UTs, correction of inverted tax structure, rate rationalization of some goods were postponed to the next council meeting. A special one-agenda council meeting will be held in July 2020 only to discuss about GST compensation to states and ways to fund the same.

I have summarized the GSTR 3B Due dates and compliances in simple language as below

1) Taxpayers who could not file their GSTR 3B returns for any or all of the months between July 2017 and January 2020 can now file them between 1st July 2020 and 30th September 2020 after paying a reduced late fee of maximum Rs. 500 per return if they have tax liabilities. If there is no tax liability then no late fees will be payable.

2) Summary of GSTR 3B Compliance

(Please note that the due date for furnishing returns in form GSTR 3b remains unchanged; i.e. 20th day of the month succeeding such month)

Notes

1) In case the returns in FORM GSTR-3B for the said months are not furnished on or before 24th June, 2020 then there will be no benefit of reduced interest and interest at 18% p.a. shall be payable from the original due date of return i.e. 20^th day of the month succeeding such month, till the date on which the return is filed. In addition, regular late fee shall also be leviable for such delay.

Further, vide notification No. 33/2020- Central Tax, dated 03.04.2020, late fees have been waived for delay in furnishing the statement of outward supplies in FORM GSTR-1 for the tax periods March, 2020, April 2020, May, 2020 and quarter ending 31st March 2020 if the same are furnished on or before 30th June, 2020.