Lockdown due to COVID-19 has had its impact on all businesses and consequently also on tax professionals. To provide relief in compliances, staggered dates for filing of GSTR 1 and GSTR 3B for the month of February, March, April and May 2020 were announced and notified vide notifications dated 3rd April 2020 under the Central Goods and Services Tax Act, 2017 (‘CGST Act’).
The lockdown hasn’t been lifted in many parts of the country yet and hence in the 40th GST Council meeting which was held on 12th June 2020, additional procedural reliefs have been recommended by the GST Council. These reliefs will be notified soon under the CGST Act.
Following are the recommendations:
1. Reduction in late fee
- No late fee for Form GSTR 3B for the period from July 2017 to January 2020 if there is no tax liability.
- Late fee capped at Rs. 500 per return if there is any tax liability. (Author’s view – This late fee would be capped at Rs. 500 for Central GST and Rs. 500 for State GST)
This would apply for all GSTR 3B returns furnished between 1st July 2020 to 30th September 2020.
2. Relief for small taxpayers
Small taxpayers = Aggregate turnover is up to Rs. 5 crores
- For the month of February, March and April 2020 the following due dates were announced earlier for small taxpayers.
Further to these due dates, it is now recommended by the council that if small taxpayers file their returns beyond these extended due dates, then interest will be charged at 9% p.a. instead of 18% p.a.
However, no clarification is provided in respect of late fees for the said period.
For the months of May, June and July 2020, waiver of late fees and interest will be provided if returns in Form GSTR 3B are furnished before September 2020. Staggered dates for filing these returns will be provided.
3. One time extension for seeking revocation of cancellation of registration
Where registrations have been cancelled till 12th June 2020 and taxpayers wish to restore their registrations, application for revocation of cancellation can be filed up to 30th September 2020.
The press release also says that certain clauses of the Finance Act, 2020 amending CGST Act 2017 and IGST Act, 2017 will be brought into force from 30th June 2020. Respective notifications are awaited.
Considering that a lot of businesses are yet to return to normal, these reliefs are necessary. Since these reliefs are provided to small taxpayers, it means, in case of large taxpayers the due dates will remain the same. Also, the late fees would continue at Rs. 50 per day and interest liability will continue at 18% p.a. for any delay in filings.