43rd Council meeting to announce GST Amnesty scheme for delayed GSTR

The Goods and Service Tax Council (GST Council) is expected to announce an amnesty scheme concerning late fees for GST return filing in its upcoming meeting on Friday, 28th May 2021. The scheme will provide significant assistance to small taxpayers and Small, Medium and Micro (SME) businesses in the country due to the epidemic.

The scheme is likely to cover pending GSTR-3B returns from the start of the GST on 1st July 2017 until April 2021. GSTR-3B is a summary return that contains all the monthly inward and outward supplies, input tax credit claimed, and tax liability that must be paid and filed by all the GST registered entities.

An official close to the development told Business Today that the Council would propose a late fee amnesty. “Taxpayers will have access to a compliance window to take advantage of the amnesty programme. The compliance window might start as early as 1st June and extend until 31st August 2021. The Council will make the final judgement on the proposal and compliance timelines.” stated an official.

The source further added that “Various sources have stated that taxpayers could not file returns owing to various reasons. We are in a situation where, even if in cases of nil GST returns, the late charge and interest have skyrocketed “.

According to the proposal, a fixed late fee of Rs 500 will be applied under the amnesty window for all taxpayers who have no tax liability to declare and must file a nil return. Additionally, taxpayers responsible for paying tax between July 2017 and April 2021 will be assessed with a late fee of Rs 1,000. It must be noted that to profit from the plan, taxpayers must file their returns between the compliance date set by the Council.

Surprisingly, an RTI request revealed that the government received nearly Rs.100 crore in late fees on GSTR-3B and other filings between 1st April 2019 and 30th April 2021. According to the RTI response, data on late fee collection for the period between the GST implementation date and March 2019 is unavailable.

Non-compliance with the GST regime is punishable by a significant penalty. A late fee of Rs 20 per day is paid in the case of nil return, while others must pay a late fee of Rs 50 per day per return. The late fee for each GST return is restricted at Rs 5,000 per month per Act.

For the past few months, one of the most common problems raised by taxpayers on social media has been the late charge. Small businesses even staged a nationwide protest on the topic of hefty late fees before this year’s Budget.

For any clarifications/feedback on the topic, please contact the writer at annapoorna.m@cleartax.in