CBIC notifies new GST extensions amid COVID-19-led lockdown

In March 2020, our Union FM had announced several relief measures to cater to the taxpayers affected by India’s 21-day lockdown. A tax ordinance was passed on the 31st of March 2020 to give an immediate effect to these changes. After that, the Central Board of Indirect Taxes and Customs (CBIC) had to notify the GST extensions.

On the 3rd of April 2020, the CBIC issued new CGST notifications for the changes. Additionally, a detailed circular was issued to clarify any anomalies surrounding these notifications. In addition to the Union FM’s announcements, a new set of notifications have also been released for e-way bills and adjustment of the provisional ITC. 

Firstly, the validity of the e-way bills has been extended to the 30th of April 2020, where its validity period expires between the 20th of March 2020 and the 15th of April 2020. 

Secondly, the due date for submission of the form CMP-08 by the composition dealers for the January-March 2020 quarter is now pushed to the 7th of July 2020. Also, the return in form GSTR-4 for the FY 2019-20 has been extended till the 15th of July 2020 from the 30th of April 2020. 

All the composition taxpayers had to file the form CMP-02 for the FY 2020-21 to once again opt into the scheme. The requirement has been pushed from the 31st of March 2020 to the 30th of June 2020, as earlier highlighted by the FM. Accordingly, the form ITC-03 can now be filed by the 31st of July 2020.

In the next, we have the GSTR-3B due dates being shifted to June 2020 for all the return periods from February to April 2020. Although the due dates have not been extended, a late fee waiver provides a further time limit for the businesses. Also, the filing will be in a staggered manner based on the annual turnover recorded in the previous financial year, irrespective of the state/UT in which the taxpayers are registered.

The businesses with a turnover of more than Rs 5 crore can file the GSTR-3B for February, March and April 2020 before the 24th of June 2020 to avoid a late fee. They will not be charged any interest for the first fifteen days from the due date, irrespective of the payment. After that, a reduced interest rate at 9% per annum will be levied on the delayed GST payment where the GSTR-3B is filed before the newly specified due date.

Also Read: CBIC Clarifies on Utilisation of ITC in Case of Mergers & Acquisitions

Likewise, the taxpayers with a turnover between Rs 1.5 crore to Rs 5 crore can file the GSTR-3B for February and March 2020 before the 29th of June 2020 and for April 2020 before the 30th of June 2020, without late fee. The taxpayers with a turnover of up to Rs 1.5 crore need to file the GSTR-3B for February, March and April 2020 before the 30th of June, the 3rd of July and the 6th of July 2020 respectively, to avoid the late fee charge.

The GSTR-3B for May 2020 has also been extended to the 27th of June 2020 (for the taxpayers with turnover exceeding Rs 5 crore), the 12th of July 2020 and the 14th of July 2020 (for taxpayers with turnover of up to Rs 5 crore and belonging to two different class of the states/UTs respectively). 

While the GSTR-3B due date for February 2020 has been extended, it is imperative to note that the monthly filing of GSTR-1 for February 2020 has not received an extension. However, the GSTR-1 for the months’ March, April and May 2020 has been extended till the 30th of June 2020. The quarterly filers can sigh in relief as their GSTR-1 for the quarter ending on the 31st of March 2020 has also been extended till the 30th of June 2020.

In the fifth, we have an important update about the input tax credit (ITC) claims for the taxpayers. The rule 36(4) of the CGST Rules, 2017 allowed a taxpayer to claim a provisional ITC only to the extent of 10% of the eligible credit available in GSTR-2A while filing their GSTR-3B. A buyer could claim in total 110% of the eligible ITC as per GSTR-2A after making adjustments in his GSTR-3B. It involved adjusting the last month’s provisional credits with the actual invoices uploaded in the current month. 

The government has relaxed this requirement of adjusting on a month-to-month basis up to September 2020. Accordingly, the rule shall apply cumulatively for the months February, March, April, May, June, July and August 2020. The cumulative adjustment of ITC for all these months can be made in the GSTR-3B return of September 2020.

However, this will make reconciliation more tedious for the taxpayers, since the financial year 2019-20 ends on the 31st of March 2020. Currently, the CGST rule allows the businesses to claim ITC for FY 2019-20 up to the GSTR-3B filing for September 2020. However, a separate reconciliation must be made by them before filing the returns for April 2020 to enable a smoother shifting into the new financial year.

Lastly, all the other GST compliance falling due between the 20th of March 2020 and the 29th of June 2020 shall stand extended till the 30th of June 2020.

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