GST COMPLIANCES AMID COVID 2019 – RECENT DEVELOPMENTS

[Dr. Sanjiv Agarwal]

The entire world is reeling under severe pandemic, COVID 2019 or Corona virus and India too has been badly affected causing social disruption, economic shut down and health concerns. The economy is at a virtual standstill and entire nation is under lockdown since 25^th March, 2020 resulting in shutdown of all offices, shops, showrooms, factories and everything. All individuals are confined to their homes. This has resulted in inability to fulfill statutory obligations in relation to payment of taxes and filings, besides other corporate and other responsibilities.

Central Government has provided various relaxations on payment and in filing of returns which, inter alia include allowing delayed payment of taxes, lower or nil rate of interest, extension of due dates for payment of taxes and filing of returns etc.

The following tables provide the gist of relief / relaxation provided :

1. GSTR-3B Returns

S. No.	Return	Turnover	Period	Regular due date	Relief provided till	Interest	Late fee and penalty
1	GSTR-3B	Less than ₹ 1.5 crores	February	22ndor 24th of next month	30.06.2020	No Interest if returns have been furnished on or before the dates till which relief is provided	Not payable if return filed before the date till which relief is provided. However, in case, the same is filed after said dates, late fees and penalty shall be levied. The Government have not extended the due dates of filing of return but have only provided relief by waiving off penalty and late fees and reducing the interest rates.
			March		03.07.2020
			April		06.07.2020
2		More than ₹ 1.5 crore but up to ₹ 5 crores	February	22ndor 24th of next month	29.06.2020
			March
					30.06.2020
			April
3		More than ₹ 5 crores	February	20.03.2020	04.04.2020	No interest till 15 days from regular due date and @ 9%thereafter provided returns have been furnished till relief date
			March	20.04.2020	05.05.2020
			April	20.05.2020	04.06.2020

2. GSTR-1 Returns

Return	Turnover	Period	Regular due date	Relief provided till	Interest	Late fee and penalty
GSTR-1 (Monthly)	More than ₹ 1.5 crores	March	11.04.2020	30.06.202 0	Not applicable	Note payable if return filed before the date till which relief is provided. However, in case, the same is filed after said dates, late fees and penalty shall be levied. The Government have not extended the due dates of filing of return but have only provided relief by waiving off penalty and late fees and reducing the interest rates.
		April	11.05.2020
		May	11.06.2020
GSTR-1 (Quarterly)	Less than ₹ 1.5 crores	Jan-Mar	30.04.2020

(Source : Notification No. 31/2020-CT and 32/2020-CT dated 03.04.2020)

Following Illustration explains revised interest rate for taxpayers with aggregate turnover of more than ₹ 5 crores

S.No	Due Date of filing of return	Date of filing of GSTR 3B	No. of days of Delay	Whether condition for reduced interest fulfilled	Interest
1	20.04.2020	02.05.2020	11	Yes	No interest
2	20.04.2020	20.05.2020	30	Yes	Zero interest for 15 days + Interest @ 9% p.a for 15 days
3	20.04.2020	20.06.2020	61	Yes	Zero interest for 15 days + interest rate @ 9% p.a. for 46 days
4	20.04.2020	24.06.2020	65	Yes	Zero interest for 15 days + Interest @ 9% p.a for 50 days
5.	20.04.2020	30.06.2020	71	No	Interest @ 18% p.a for 71 days (i.e. no benefit of reduced interest)

(Source : Circular No.136/6/2020 –GST dated 03.04.2020)

3. Revised due dates for GSTR 3B return for the month of May, 2020

Due Dates	Turnover
27.06.2020	Taxpayers having an aggregate turnover of more than rupees 5 crores in the preceding financialyear
12.07.2020	Aggregate turnover upto ₹ 5crores States Covered – Chhattisgarh, MP, Gujarat, Maharashtra, Karnataka, Goa, Kerala, TN, Telangana, Andhra Pradesh, Daman &Diu and Dadra and Nagar Haveli, Puducherry, Andaman and Nicobar Island and Lakshadweep
14.07.2020	Aggregate Turnover upto₹ 5crores States Covered – HP, Punjab, Uttarakhand, Haryana, Rajasthan, UP, Bihar, Sikkim, Arunachal Pradesh, Nagaland, Manipur, Mizoram, Tripura, Meghalaya, Assam, WB, Jharkhand, Odisha, J&K, Ladakh, Chandigarh and Delhi

(Source: Notification No. 30/2020- Central Tax dated 03.04.2020)

4. Amendment in Rule 36(4) on ITC

 Rule 36(4) of CGST Rules, 2017 has been amended to the following effect:

Before amendment:

• The registered person shall be required to claim ITC to the extent of 110% of eligible ITC getting reflected in GSTR-2A of the tax period.
• Taxpayer was required to calculate the amount as per the above provision for every tax period before filing of GSTR-3B.

After amendment:

• Cumulative calculation of ITC allowed for period of February, March, April, May, June, July and August 2020. Therefore, for the returns furnished in said tax period, condition of Rule 36(4) not be applicable.
• GSTR 3B return for September, 2020 to be furnished after adjustment of cumulative ITC calculated for the said months.

(Source : Notification No. 35/2020-CT dated 03.04.2020)

5. Relief provided in respect of certain challenges faced by the registered persons in implementation of provisions of GST laws:

Cancellation of Goods and Services contract

The treatment under GST has been clarified in respect of certain transactions of supply of goods and services when when cancelled for any reason:

Nature of  Supply	Original Event	Document Issued	Trigger Event	Treatment under GST
Services	Advance Received	Tax Invoice issued before  supply           of service	Contract cancelled before supply of service	Credit note to be issued under section 34 of CGST Act, 2017 for reduction of tax liability. Details of such credit notes shall be declared in the return for the month during which such credit note has been  issued. There is no need to file a separate refund claim. Where there is no output liability against which a credit note can be adjusted, refund  claim allowable under  'Excess payment of tax, if any' through FORM GST RFD-01.
Services	Advance Received	Receipt voucher	Contract cancelled before supply of service	Issue refund voucher under GST. Refund claim to be filed by filing FORM GST RFD-01 under the category    'Refund   of excess payment of tax'
Goods	Goods supplied	Tax invoice	Goods returned	Credit note to be issued under section 34 of CGST Act, 2017 for reduction  of tax liability. Details of such credit notes shall be declared in the return for the month during which such credit note has been issued. There is no need to file a separate refund claim. Where there is no output liability against which a credit note can be adjusted, refund claim allowable under 'Excess payment of tax, if any' through FORM GST RFD-01.

Deferment of filing of refund claim if expiring on 31.03.2020

As per notification No. 35/2020-Central Tax dated 03.04.2020, where the timeline for refund compliances falls during the period from 20.03.2020 to 29.06.2020, the same stand extended till 30.06.2020.

6. Due Date extension of deposit of TDS

• The due date for furnishing of return in FORM GSTR-7 along with deposit of tax deducted during the period from 20.03.2020 to 29.06.2020 has been extended till 30.06.2020.
• No interest under section 50 of CGST Act, 2017 shall be leviable if tax deducted is deposited by 30.06.2020.

(Source : Circular No. 137/07/2020-GST dated 13.04.2020)

7. GST FORM PMT-09

Form GST PMT-09 has been made available on GST portal and it enables a taxpayer to make intra-head or inter-head transfer of amount available in Electronic Cash Ledger. A taxpayer can file GST PMT 09 for transfer of any amount of tax, interest, penalty, fee or others available under one (major or minor) head to another (major or minor) head in the Electronic Cash Ledger. Form GST PMT 09 provides flexibility to taxpayers to make multiple transfers from more than one Major/Minor head to another Major/Minor head if the amount is available in the Electronic CashLedger.

To file Form GST PMT-09, taxpayers are required to log in on GST portal with valid credentials and navigate to Services → Ledgers→ Electronic Cash Ledger → File GST PMT-09 for Transfer of Amount option. After Form GST PMT-09 is filed:

• ARN is generated on the successful filing of Form GST PMT-09.
• An SMS and an email is sent to the taxpayer on his registered mobile and email id.
• Electronic Cash ledger will get updated after successful filing of Form GST PMT- 09.
• Filed form GST PMT-09 will be available for view/download in PDF format.

(Source : Notification No.: 37/2020-Central Tax dated 28.04.2020)

8. Extension of validity of E-way bills 

CBIC had vide Notification No. 35/2020 dated 3rd April, 2020 extended the period of validity till 30th April, 2020 for e-way bill validity expires during the period 20th day of March, 2020 to 15th day of April, 2020.

Now CBIC has provided that where an e-way bill has been generated on or before the 24th day of March, 2020 and its period of validity expires during the period 20th day of March, 2020 to the 15th day of April, 2020, the validity period of such e-way bill shall be deemed to have been extended till the 31st day of May, 2020.

[Source: Notification No. 40/2020- Central Tax dated 05.05.2020]

1. Extension of due date of Annual Return & Reconciliation Statement for the FY 2018-19

The time limit for furnishing of the annual return in Form 9 and Reconciliation Statement in Form 9C specified under section 44 of the said Act read with rule 80 of the said rules, electronically through the common portal, for the financial year 2018-2019 has been further extended till the 30th September, 2020.

[Source: Notification No. 41/2020- Central Tax dated 05.05.2020]

10. Verification of filing of Form 3B through EVC

Considering the difficulty faced by registered taxpayers in applying for DSC, CBIC has provided that a registered person registered under the provisions of the Companies Act, 2013 (18 of 2013) shall, during the period from the 21st day of April, 2020 to the 30th day of June, 2020, also be allowed to furnish the return under section 39 in FORM GSTR-3B verified through Electronic Verification Code (EVC) i.e one time password.

New Rule 67A provide for furnishing of NIL return by short messaging service (SMS) to registered person in Form GSTR-3B for a tax period by using the registered mobile number. Nil return would mean a return u/s 39 that has nil or no entry in all tables of Form-3B.

[Source: Notification No. 38/2020- Central Tax dated 05.05.2020]

11. Extended due date for GST ITC-04

The due date of filing Form GST-ITC-04 in respect of goods dispatched to a job worker or received from a job worker for the quarter ending March, 2020 which falls due on 25.04.2020 has been extended upto 30.06.2020.

(Source: Notification No. 35/2020-Central Tax dated 03.04.2020;

Circular No. 138/08/2020-GST dated 06.05.2020)

The above relaxations / extensions may be kept in mind by the tax payers for ensuring timely compliances within the relaxed  norms / extended date lines.