The Government launched the Goods or Services Tax or GST amnesty scheme 2021 for the benefit of business organisations who have missed filing the returns due to unavoidable reasons. Due to the global pandemic known as COVID-19 and the conditions worldwide, taxpayers have not filed GSTR-3B returns. For all such taxpayers, the Government of India has established a GST amnesty scheme 2021, under which all the pending returns can be filed with a lower rate of interest or no interest. This scheme is beneficial for the taxpayers and provides relief in many ways for filing GSTR -3B returns for missed tax periods.
What is GST Amnesty Scheme 2021?
A person registered under GST law has to file the returns in any case, even whe n the return is NIL. The returns can be filed monthly or quarterly under the Normal scheme or Composition scheme. Every Input Service Distributor has to file monthly returns and provide the credit distributed details mandatorily. Th e person collecting tax and deducting tax has to file the tax collected at source and Tax Deducted at Source (TDS) returns monthly and provide the deducted and collected tax and any other specified amount in the returns.
A non-resident individual who also comes under the purview of a taxable person has to file the returns even for the no transaction period. However, suppose the taxable person is not able to file the return on time for various reasons. In that case, he is liable to pay penalty and interest for such period from the due date to the date of filing the return.
Important Information Regarding GST Amnesty Scheme 2021
- The people who missed filing GSTR-3B returns were provided relief under the GST amnesty scheme 2021.
- This scheme was initially introduced for the taxpayers to file the return covering the period of July 2017 - September 2018.
- The taxpayers and professionals had requested to reopen and notify the GST Amnesty scheme 2021 for the taxpayers due to Covid-19 pandemic circumstances.
- Considering the grave conditions, the GST Amnesty scheme 2021 was again introduced by CBIC vide its notification released on 1st June 2021.
- This notification stated that all the taxpayers who have failed to or missed filing the GSTR – 3B returns for the previous period, i.e. July 2017 - April 2021, can file the return with a GST return late fee (which is the reduced maximum payable) and levy of interest.
Validity of GST Amnesty Scheme
With its notification released on 1st June 2021, CBIC and GST Council have adhered to its recommendation in the 43rd meeting for the GST amnesty scheme 2021. The highlights of the same are as follows:
1. Taxpayers can file the pending GSTR-3B for any tax period, i.e. July 2017 - April 2021 up to 31st August 2021, with a relief for levy of maximum GST return late fee. This period is extended to 30th November vide notification No 33/2021 dated 29th August 2021. So, Taxpayers can file the returns for the previous tax period up to 30th November 2021.
2. The reduced maximum GST return late fee as notified by CBIC is as follows:
- The highest late fee per return for the GSTR-3B to be filed for the previous period is Rs. 250 each for CGST and SGST for Nil return for GSTR-3B.
- For all other taxpayers, the highest payable late fee per return for filing GSTR-3B is Rs 500 each for CGST and SGST.
3. For future tax periods also, the highest payable late fee is rationalised for filing the GSTR – 3B as mentioned below:
- For the Nil returns, the highest payable late fee levied will be charged at Rs. 250 each for CGST and SGST.
4. For all other returns, the highest payable late fee shall be levied as per the annual turnover as mentioned below:
Annual Turnover for the previous year
late fee charged (maximum)
Turnover up to Rs. 1.5 crore
Rs. 1000 each per return for CGST and SGST
Turnover between Rs. 1.5 crore and Rs. 5 crore
Rs. 2500 each per return for CGST and SGST
Turnover exceeding Rs. 5 crore
Rs. 5000 each per return for CGST and SGST
6. Up to 31st August 2021, the GST taxpayers who are Companies can also file the GST returns opting for EVC signatures.
On 26th August 2021, the CBIC and GST council further notified in the official gazette, starting from 1st September 2021, the taxpayers shall not be allowed to file GSTR-1 or use the new Invoice Furnishing Facility (IFF) if there are pending GSTR -3B for filing. This applies to the taxpayers who have GSTR-3B pending for filing till July 2021 for monthly filers and quarterly filers; it would be applicable for the quarter ending June 2021.
The updates notified in notification no. 33/2021 dated 29th August 2021 are mentioned below:
- The time limit to avail GST amnesty scheme 2021 for filing the pending GSTR – 3B returns for the tax period July 2017 - April 2021 is further extended to 30th November 2021.
- If any of the GST registration is cancelled under section 29(2) clause (b) or (c) of the CGST Act, then the same can be revoked up to 30th September 2021. The last date for the same should fall between the period 1st March 2020 to 31st August 2021. The same is notified by Notification No. 34/2021, dated 29th August 2021.
- The GST taxpayers having a legal identity as Company can file their returns opting for EVC and digital signature options up to 31st October 2021. Th is is notified by the Government through notification no. 32/2021 dated 29th August 2021.
Thus, any taxpayer who has failed to or missed filing the GSTR -3B returns can file the return with reduced Late filing fees within the given time frame on the GST portal.
Benefits of GST Amnesty scheme
Previously, if the returns were not filed on time, the following consequences had to be faced:
- The taxpayers under GST Act are not allowed to file the GST further returns unless the earlier period GSTR – 3B is filed.
- It levied heavy penalties in the form of Late fees and interest when such returns were filed.
- When the taxpayers under the GST Act do not file the GSTR-3B for three quarters or six consecutive months, the GST registration gets cancelled. This may affect the entity's business as the GST registered customers or other clients may not continue their contracts or not further have any business with the entity.
Many GST taxpayers have Nil returns to be filed and have not filed the returns due to ignorance or some other reason.
With the GST amnesty scheme 2021, such issues can be avoided. The GST amnesty scheme 2021 is beneficial for all such taxpayers in the following ways:
- The taxpayers who have not filed the returns in time due to various reasons and circumstances created due to the COVID-19 pandemic can now file the pending returns without any heavy financial burden on the business.
- The GST registration cancelled due to the non-filing of returns can be revoked, and the return filing regime can be streamlined for several taxpayers.
- The weak economic circumstances and effects of lockdown can be mitigated to a certain extent by this Governmental move to provide relief to the business class, especially the small businessmen.
- The taxpayers are encouraged to file the pending returns due to the relief provided in the GST return late fees.
- The registrations of many of the taxpayers have been cancelled due to the non-filing of returns which was mainly due to the outbreak in the country. The GST Amnesty scheme 2021 has been a significant relief to all such taxpayers.
- All the tax collected by the Government through such schemes also assists the Government in providing the public services to the masses at large.
- The additional tax collected by the Government is further utilised for the growth, maintenance, and development of the country and sustainability of the Government offices and organisations.
Eligibility for GST Amnesty Scheme 2021
The GST Amnesty Scheme 2021 can be availed by every taxpayer who falls under the following categories:
- Every registered taxpayer under The GST Act 2017 and is liable to pay tax under the same Act.
- Every taxpayer who has failed to or missed filing the return under the previous tax period July 2017 - April 2021.
- Every taxpayer registered under the GST Act and whose registration has been cancelled due to non-filing of returns within the specified time limit as declared from time to time.
- Any other registered taxpayer as notified by the Government from time to time.
Last Date for GST Amnesty Scheme 2021
The last date for eligible registered taxpayers to avail of the GST Amnesty Scheme 2021 is as mentioned below:
- Initially, the GST Amnesty scheme 2021 was open to 31st August 2021 for eligible registered taxpayers.
- This date has been extended to 30th November 2021 vide notification no 33/2021 dated 29th August 2021.
The Companies are allowed to use the option of EVC and digital signatures for filing the returns up to 31st October 2021.
Late fee reduction under GST Amnesty Scheme 2021
The taxpayers have been provided with exorbitant relief from the levy of late fees for filing pending GSTR-3B returns for the specified period. The maximum cap for the levy of late filing fees has been fixed and is restricted to Rs 500 per return for CGST and SGST for any taxpayer other than the Nil Filers. The Nil filers are restricted to Rs 250 each per return for CGST and SGST.
It implies the GST return late fees that shall be payable by the taxpayer would be lower of the two amounts. These amounts are the total amount leviable under the Act for the total period of delay per return and the maximum amount charged.
This is the most welcome relief provided by the Government to the taxpayers and has encouraged several entities to file the return. It has also benefited the Government, on the other hand, with tax collection and recovery from the organisations.
Also Read: GST Explained for Everyone
Issues and Challenges under GST Amnesty Scheme 2021
The scheme has done a commendable job for all the registered taxpayers and non-filers to streamline their business by declaring the GST data to the Government through the GST portal. However, there are some issues and challenges that persist in the scheme. Some of them are mentioned below:
1. Interest dues not relaxed
Only the late fee is rationalised for the returns to be filed before the specified time limit. There has been no waiver of interest for such returns that are filed. The interest rates recovered on such returns are also huge and may discourage the taxpayers from filing the returns.
The CGST Act has restricted the time limit for ITC claims, namely the input credit through the tax invoice and the debit notes issued. These can be claimed only until 30th September of t he following financial year or the annual return, whichever is filed earlier.
While taxpayers can file and pay the tax liability, the amnesty scheme is silent about the claim of the ITC credit. Admissibility of ITC is a concern that many taxpayers raise as many have a considerable amount to be claimed under ITC for the said period. Since the government's time limit for claiming ITC is not extended, the taxpayers have suffered the loss of claiming the ITC.
3. No relief for late fees on GSTR -1
The GSTR-1 late filing fees are not covered under the GST Amnesty scheme 2021. So any late fees charged on the filing of GSTR -1 pending for the same period has to be paid by the taxpayer.
4. Canceled registration
You need a register for GST for filing the GSTR-3B. The earlier notification released on 1st June 2021 was not clear about the GST revocation for the cancelled registration. However, the same has been clarified in the recent notification No. 34/2021 dated 29th August 2021.
The GST Amnesty Scheme 2021 is a benevolent move by the government to assist and encourage the taxpayers for filing the pending returns and streamline their business. The taxpayers should file the returns within the specified time frame and neutralise the financial consequences created due to the circumstances. The extension of the time limit should be taken as a second chance for the same. For more information regarding GST, accounting and business tips, download the Khatabook app today.