CBIC issues Circular No. 3, Clarifies GST Compliance Extensions

Goods and Services Tax (GST) act, rules, and amendments thereof are placed in a sophisticated framework, mainly to guard and uphold the solemnity of the statute. 

On 3rd April 2020, the CBIC notified an extension for blanket-all GST compliance, except the filing of returns in GSTR-3B and GSTR-1, vide CGST notification number 35/2020. Businesses could file GSTR-1 and GSTR-3B without paying a late fee within specified dates as per other notifications. It was done to aid businesses affected by the lockdown imposed across India due to the COVID-19 pandemic.

The CGST notification number 35/2020 allows a taxpayer to complete any GST compliance, before 30th June 2020 without any penal charges, where it falls due between 20th March 2020 and 29th June 2020 (defined period). The compliance includes filing of returns, submission of records/forms, filing of appeals and replying to notices under the GST law. The CBIC had issued two circulars in April 2020 to clarify some issues about this notification.

For the third time, the CBIC has issued another CGST circular number 138/08/2020 on 6th May 2020. It further clarifies the applicability of the timeline extension notifications focussing on the Insolvency and Bankruptcy Code (IBC), the timeline extension allowed for merchant exports and the extension granted for the filing of form ITC-04.

The CBIC has explained that the filing of ITC-04 for the January-March 2020 quarter is extended to 30th June 2020 vide the CGST notification number 35/2020 dated 3rd April 2020 itself. The form was due by 25th April 2020 for the January-March 2020 quarter. ITC-04 is a form to be filed by the principal manufacturer giving out the details of items sent to or received from his job workers once in every quarter.

As per the circular, all the registered suppliers under GST, who sell to merchant exporters for exports, also get an additional time limit until 30th June 2020 to finish exporting vide the same notification. Such an extension is essential for suppliers to continue taking the benefit of charging a concessional GST rate of 0.1% on the transactions with merchant exporters. In case the time limit of 90 days to export the goods falls during the defined period, the last date gets extended up to 30th June 2020.

Also Read: COVID-19: CBIC Further Extends the Timelines for GST Compliance

Just before the notifications on GST relief measures were passed on 3rd April 2020, the CBIC had issued detailed procedures on 21st and 23rd March 2020 for the Interim Resolution Professionals (IRP). It laid down the GST compliance expected from them during the period of Corporate Insolvency Resolution Process (CIRP) with timelines. 

Doubts were raised about the applicability of the extended timeline to this specific compliance as well. Consequently, the CGST notification number 39/2020 was rolled out on 5th May 2020 granting an extension to this compliance too and the circular now addresses certain confusions surrounding it.

Firstly, the circular states that an IRP is required to obtain a new GST registration for the entity under CIRP within thirty days of his appointment or by 30th June 2020, whichever is later. Secondly, an IRP need not obtain a fresh GST registration for the entity under CIRP, in case the corporate debtor regularly filed GSTR-1 or GSTR-3B for all the tax periods before his appointment. 

Lastly, a new GST registration by IRP is required to be obtained only once, irrespective of changes done later to the appointment of IRP or Resolution Professional (RP). In case the IRP is not ratified, and a separate RP is appointed, it is sufficient for the RP to amend the authorised signatory details under the new GSTIN. However, if the past IRP fails to share the credentials with the appointed RP to allow amendments, the latter can approach the jurisdictional authority as the primary signatory.

The trade continues to face ambiguity in following the CGST notification number 35/2020 that extends the timeline for blanket-all GST compliance. Businesses are not still sure if particular compliance falls in the scope of the notification. But the notification outlines the exceptions such as the need to obtain GST registration once liable during the defined period, switching from composition scheme to regular in case the yearly turnover exceeds the threshold during the specified period, raising of invoices and e-way bills, etc. Hence, the rest of the compliances will most certainly be covered in its scope of extension.

CBIC must suitably issue a detailed guide by compiling all the GST compliances covered by the CGST notification number 35/2020 to hand-hold the trade community.

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