Since the implementation of GST in July 2017, there has been a significant amount of non-compliance owing to ambiguity in the GST regulations, constant modifications, a lack of understanding, and so on. Furthermore, non-filers opted not to comply due to the penalty and late charge applications. As a result, the GST Amnesty Scheme was created to encourage non-filers to come forward and submit their GST returns voluntarily by granting a one-time waiver of late costs.
The GST penalty waiver was first announced to span the period from July 2017 to September 2018. A one-time extension of the time restriction was granted at that time. Taxpayers may file these outstanding taxes on or before March 31, 2019. Due to the COVID epidemic, numerous tax experts and industry leaders requested the government to reinstate the GST amnesty plan for several months in early 2020. Finally, the government granted their plea.
CBIC introduced the GST late fee waiver for the second time on June 1, 2021, by a notification. It applies to all outstanding GSTR-3B returns for tax periods between July 2017 and April 2021.
According to the most recent Central Tax notice number 33/2021, published on the 29th of August 2021, the validity of the GST amnesty program has been extended until the 30th of November 2021, from the previous deadline of the 31st of August 2021. It implies that taxpayers with pending GSTR-3B returns between July 2017 and April 2021 can file them on or before November 30, 2021, with a lower maximum late charge.
Previously, the GST amnesty plan was applicable from 1st June 2021 to 31st August 2021, according to the CBIC’s latest Central Tax notice number 19/2021 published on 1st June 2021. Any taxpayer who has not submitted GSTR-3B by the required dates for tax periods beginning in July 2017 and ending in April 2021 may do so via the GST portal by that deadline.
| Taxpayer Category | Relaxations in Late Fee |
| 1. Taxpayer having nil tax liability (which is nil return).
2. Taxpayers that have aggregate turnover in preceding FY that is up to Rs. 1.5 crores. |
Rs. 500 and Rs. 250 for each; CGST & SGST for a return.
Rs. 2000 CGST and SGST. Rs. 1000 for each return. |
| 3. Taxpayers that have aggregate turnover in preceding FY between Rs. 1.5 crores and Rs. 5 crores. | Rs. 5000 CGST and SGST for each Rs. 2500 per return. |
| 4. Taxpayers that have the aggregate turnover in preceding Fy more than Rs. 5 crores. | Rs. 10000 and Rs. 5000 for CGST and SGST respectively. |
Although the scheme’s goal is to give relief to non-filers who wish to continue doing business by correctly disclosing GST data, it is not without challenges. The GST Amnesty Scheme was not without its problems and issues.
No Relief for Late Filing of GSTR-1 Under the Scheme: The scheme does not apply to the GSTR-1 return. As a result, there is no late fee waiver or relief for filing a pending GSTR-1 for the same tax period as the taxpayer wants to file a GSTR-3B.
Revocation of Cancelled GST Registration: On August 29, 2021, the CBIC published a press release as well as Central Tax Notification Number 34/2021. According to this, if GSTINs were cancelled between 1st March 2020 and 31st August 2021 due to non-filing of GSTR-3B [Section 29(2) clauses (b) and (c) of the CGST Act], the time limit to request for reversal of cancellation of GST registration has been extended till 30th September 2021.
There was no explanation until the 29th of August concerning GSTINs that had previously been terminated owing to non-filing of previous GSTR-3B reports about when and how they would be revoked or restored when the aggrieved taxpayer preferred an appeal.
No Relaxation on Interest Due: Those with tax liabilities who did not submit GSTR-3B are not eligible for interest relief. Only the maximum late charge is waived for submitting before August 31, 2021.
Non-Admissibility of Input Tax Credit: Certain tax professionals challenge the GST Amnesty Scheme’s inadmissibility of Input Tax Credit (ITC). Tax specialists are legitimately concerned about the admissibility of ITC under this system. Although the amnesty plan permits outstanding tax payments for earlier periods, it remains silent on ITC claims in the same return for the previous fiscal year. The CGST Act specifies the time restriction for filing ITC claims. The ITC on a tax invoice or debit note issued during the fiscal year must be claimed by the earliest of two dates. These are the deadlines for reporting GSTR-3B and the annual return in September of the year after the fiscal year.
Assume the due date for filing GSTR-3B for September 2020 was October 20th, 2020. The yearly return on Form GSTR-9 is due on December 31, 2020. Then, in the September GSTR-3B, the maximum time to claim ITC for FY 2019-20 was October 20th, 2020. The government extended the time limit by lowering the late charge for reporting GSTR-3B for previous tax months. It has, however, not extended the time restriction for claiming ITC for the same periods. As a result, it is illegal for a taxpayer to declare ITC while submitting GSTR-3B for the previous tax period. Under the amnesty plan, the beneficiary cannot claim such ITC.
Q1. What is Amnesty Scheme?
The Finance Ministry has extended the deadline for applying for the Goods and Services Tax (GST) amnesty plan, under which taxpayers pay a reduced penalty for late submission of monthly returns, until November 30, 2021. Previously, the deadline for filing GST returns with reduced late costs was August 31, 2021.
Q2. What is the benefit of the GST Amnesty Scheme?
Taxpayers cannot file a GSTR-3B for a certain tax period without first filing the preceding ones. Furthermore, assume that the taxpayer has not submitted GSTR-3B for six consecutive tax periods or three consecutive quarters. In that situation, they risk having their GST registration revoked. It may have an influence on their business since clients or GST registered customers may refuse to work with you or terminate contracts, making GSTR-3B significant compliance for the smooth operation of the firm.
Taxpayers would gain from this relief since they will not have to pay substantial late penalties, which would normally deter them from filing any pending GSTR-3B returns. Furthermore, it assists taxpayers in resuming operations after being badly harmed by lockdowns and poor economic conditions caused by the epidemic.
Q3. Who is eligible for the GST amnesty scheme?
The government would offer a one-time Amnesty program to lenient non-filers and zero filers of GST returns in order to deregister the GST (Goods and Services Tax) Council. The GST Amnesty Scheme has been extended till November 30th, 2021.
Q4. What is the penalty for not paying GST on time?
According to CGST regulation 22/2021 dated 1st June 2021, the late fee chargeable for GSTR-7 i.e. TDS filing under GST shall be a maximum of Rs. 2,000, but the late cost per day levied has been lowered from Rs. 200 to Rs. 50 per day of delay, per act, per return.
Q5. Is it possible to pay GST in installments?
If a taxpayer is unable to pay all GST dues (tax/interest/penalty) in one lump amount or by the due date, he may make an application with the Commissioner seeking payment in installments. Only a maximum of 24 installments is permitted, implying that the payment period might be prolonged for a maximum of two years.