written by Khatabook | November 15, 2021

What is GST Amnesty Scheme? GSTR-3B Late Fee Relief, Benefits, Eligibility, and Last Date

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Amnesty schemes are special schemes which are released over time periodically by municipal departments. These schemes provide the opportunity to property tax defaulters so they can pay their dues with relaxations like rebates in tax interest and penalties. These waivers are mostly time-bound. In this article, we will focus on the GST amnesty o scheme, the GST amnesty  scheme 2021 extension latest news, the maximum late fees for GST 3b, the GST amnesty  scheme extension update and more.

Did you know? Initially, the GST Amnesty scheme 2021 was open on 31st August 2021 for eligible registered taxpayers.

What is the Amnesty Scheme Under GST? 

The amnesty scheme GST was introduced to include periods ranging from July 2017 to September 2018. A single extension was then provided for the time period. Taxpayers were allowed to file the pending returns before or on March 31, 2019. In 2020, tax professionals, as well as industry leaders, appealed to the Government for reconsidering opening the amnesty scheme for GST regarding the upsurge of the pandemic situation caused by Covid-19. The Govt responded to the request and reopened the scheme.

CBIC introduced the Amnesty Scheme via the GST amnesty scheme notification 2021 on June 1st, 2021. It includes all those GSTR-3b returns pending in the period ranging from July 2017 to April 2021. 

Also Read: A Complete Guide to Make an Online GST Bill Format in Word

How Long is the Amnesty Scheme GST 2021 Valid? 

The Central Tax issued a notification on August 29th, 2021 with notification no. 33/2021 regarding the duration of the validity of the GST scheme of amnesty, The scheme was extended till November 30th, 2021 which was earlier valid till August 31st, 2021. This indicates that the taxpayers with pending GSTR-3b during the time period from July 2017 to April 2021, are able to file those returns before or on November 30th, 2021 with a considerably reduced maximum late penalty. 

Earlier, as mentioned in the current Central Tax notification number 19/2021 of CBIC, published on June 1st, 2021, the amnesty scheme was valid from June 1st, 2021 to August 31st, 2021. A taxpayer who is in default for not filing GSTR-3b previous to the last dates for paying taxes in the period from the month of July 2017 ending on April 2021 can avail of the facility to file within the deadline mentioned on the online GST portal.

What are the Benefits of Availing the amnesty scheme GST 2021?

The taxpayers are not allowed to file the GSTR-3b of a tax period without properly filing the due previous ones. If a taxpayer misses filing a GSTR-3b for 6 tax periods consecutively or 3 consecutive quarters, the taxpayer’s GST registration can even get cancelled. This can hugely impact the business entity or cost clients and customers registered under GST, who rely upon GSTR-3b and regards it as an essential part of smooth business conduct. These customers can cancel contracts and stop business deals with the business whose GST registration got revoked.

The taxpayers can enjoy the benefit of the amnesty scheme as they are not required to pay the lump sum amount as delay fees, which can sometimes be the main discouragement against filling the GSTR-3b return. It is also beneficial as it restores the businesses of the taxpayers who were affected by the weak economic condition caused by the pandemic.

Delayed Fee Reduction of GST Late Fee Waiver Amnesty Scheme 

Under this scheme, the taxpayers receive a concession in the penalty or late fee to be paid. The maximum late fee to be imposed is restricted to ₹1,000 for every return (₹ 500 under SGST and ₹500 under CGST) for GSTR-3B with any kind of tax liability except for a nil GSTR-3b filing.

A maximum late fee for GST 3b is considered to be ₹500 per return indicating ₹250 under CGST and ₹250 under SGST. This ensures that the late fee to be paid for such a return is supposed to be lower than the next two amounts. These are the subtotal fees calculated under the Act for every delayed day and the maximum penalty as described above. 

For example, suppose ABC & Co has not still filed GSTR-3b for January 2021 which is due by 20th February 2021, yet wants to file GSTR-3B on 2nd August 2021. As mentioned in the act, the late fee could have been ₹8,150 for a total of 163 days of late or delay with tax liability. However, since the scheme predetermines the maximum amount of the late fee should be restricted to ₹1,000 for filing the GSTR-3b return for January 2021, ABC & Co will only have to pay ₹1,000 as a delay or late fee to file that return, applicable interest and tax liability as per the Act.

Also Read: All You Need to Know About Advance Ruling under GST from AAR

What Are the Challenges Under the Scheme? 

Even though the GST council amnesty scheme is aimed at extending help to the nil-filers or non-filers who intend to carry on with their business after rightfully declaring accurate GST information, it also involves hurdles. The challenges posed particularly by the GST Amnesty Scheme are as follows.

No Waiver on Due Interest 

People with tax liability and those who haven’t filed the GSTR-3B do not receive the relaxation in interest dues. However, the maximum late fee is waived if filed before 31st August 2021.

Non-admissibility of ITC 

Under the GST Amnesty Scheme, tax professionals seriously question the non-admissibility of ITC or input tax Credit. The amnesty scheme provides the opportunity to pay pending tax for previous periods but does not recognise the ITC claims of the same return of that previous financial year. The CGST Act talks about the time limit regarding ITC claims. The ITC on a debit note or a tax invoice in a financial year can easily be claimed by the previous two dates. The Government, however, extended the maximum time limit by penalty reduction for filing GSTR-3B of ongoing tax periods. But, since the time limit has not been pushed for claiming the ITC of those periods, it legally does not allow the taxpayer from reporting ITC at the time of filing of past GSTR-3B.

Revocation of cancelled GSTIN

Taxpayers are not allowed to file pending GSTR-3B returns without any active GST registration number. The CBIC recently issued on 29th August 2021 the Central Tax notification number 34/2021 and a press release. As per these recent releases, the time limit to apply to revoke the cancellation of GSTIN is extended till 30th September 2021, in case those GSTINs were cancelled within the time period of 1st March 2020 to 31st August 2021 for non-filing of GSTR-3b. 

No Relief to Filing GSTR-1 Late 

The scheme does not cover GSTR-1 returns. Therefore, there exists no late fee waiver to file pending GSTR-1 for the tax period same as GSTR-3B.

What is the Solution to These Issues? 

The taxpayers should receive full advantage of the GST Amnesty Scheme by taking care of these aspects. The Government needs to expand its scope to include GSTR-9, GSTR-1, and GSTR-10 and allow ITC of the previous periods where the time limit has already expired. Options to revise those returns will be a great addition to the facilities of the recipients of such Input Tax Credits. The Government need to close the legal gap by taking care of these oddities.

Conclusion:

Hopefully, this article has answered all your questions regarding the amnesty scheme GST, GST amnesty scheme 2020, GST amnesty scheme 2021 extension, GST amnesty scheme 2021 last date, GST amnesty scheme latest news and more. Follow Khatabook for the latest updates, news blogs, and articles related to micro, small and medium businesses (MSMEs), business tips, income tax, GST, salary, and accounting.

Follow Khatabook for the latest updates, news blogs, and articles related to micro, small and medium businesses (MSMEs), business tips, income tax, GST, salary, and accounting.

FAQs

Q: What does it mean by an amnesty scheme?

Ans:

Amnesty schemes are special schemes released periodically by municipal departments. These schemes facilitate property tax defaulters to clear their dues with extended relaxation, such as the reduced amount of tax penalties and interests. The waivers are time-bound.

Q: When does the GST registration of a taxpayer get cancelled?

Ans:

Suppose the taxpayer fails to file the return for a continuous period of 6 months for monthly filers or two quarters for quarterly filers; in that case, the GST registration is suspended and then further cancelled

Q: How do you avoid GST penalties?

Ans:

If you have made any GST sales or purchases, you should first file the returns till the month in which you have the last GST sales or purchase and then ask the Assessing Officer to cancel your GSTIN from that month so that you can save GST late fee penalty.

Q: Who is eligible for GST Amnesty Scheme?

Ans:

The lenient nil filers and non-filers of GST returns will have a one-time Amnesty scheme from the Government to deregister the Goods and Services Tax Council.

Q: Will the GST amnesty Scheme be extended?

Ans:

As per the latest Central Tax notification number 33/2021 issued on 29th August 2021, the validity of the GST Amnesty Scheme stands extended up to 30th November 2021 from the earlier deadline of 31st August 2021.

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The information, product and services provided on this website are provided on an “as is” and “as available” basis without any warranty or representation, express or implied. Khatabook Blogs are meant purely for educational discussion of financial products and services. Khatabook does not make a guarantee that the service will meet your requirements, or that it will be uninterrupted, timely and secure, and that errors, if any, will be corrected. The material and information contained herein is for general information purposes only. Consult a professional before relying on the information to make any legal, financial or business decisions. Use this information strictly at your own risk. Khatabook will not be liable for any false, inaccurate or incomplete information present on the website. Although every effort is made to ensure that the information contained in this website is updated, relevant and accurate, Khatabook makes no guarantees about the completeness, reliability, accuracy, suitability or availability with respect to the website or the information, product, services or related graphics contained on the website for any purpose. Khatabook will not be liable for the website being temporarily unavailable, due to any technical issues or otherwise, beyond its control and for any loss or damage suffered as a result of the use of or access to, or inability to use or access to this website whatsoever.

Disclaimer :
The information, product and services provided on this website are provided on an “as is” and “as available” basis without any warranty or representation, express or implied. Khatabook Blogs are meant purely for educational discussion of financial products and services. Khatabook does not make a guarantee that the service will meet your requirements, or that it will be uninterrupted, timely and secure, and that errors, if any, will be corrected. The material and information contained herein is for general information purposes only. Consult a professional before relying on the information to make any legal, financial or business decisions. Use this information strictly at your own risk. Khatabook will not be liable for any false, inaccurate or incomplete information present on the website. Although every effort is made to ensure that the information contained in this website is updated, relevant and accurate, Khatabook makes no guarantees about the completeness, reliability, accuracy, suitability or availability with respect to the website or the information, product, services or related graphics contained on the website for any purpose. Khatabook will not be liable for the website being temporarily unavailable, due to any technical issues or otherwise, beyond its control and for any loss or damage suffered as a result of the use of or access to, or inability to use or access to this website whatsoever.