The FY 2020-21 closed recently resulted in higher indirect tax collection (Customs, Central Excise and GST) to the tune of 8.2% higher than the revised estimates (RE) and 12.3 % higher than 2019-20 collections given the fact that 2020-21 was an unusual year, this collection is infact encouraging. Not only this, imports rose by 166% and 7 % respectively over 2020and 2019. Similarly, grew by 197 % and 16% over 2020 and 2019 respectively.
Though fiscal position of Government improved with widespread economic activities in October ,2020- March ,2021, which is also reflected by tax collections, yet from April ,2021 onwards, second wave of COVID has resulted in partial lockdowns in the country and consequent imposition of restrictions over economic activities. With rapid spread of COVID, many states have imposed partial or total lockdown or curfew on all businesses and social activities. At the same time, higher health risk has also posed challenges with cost of health care infrastructure mounting up as well as very high number of fatalities resulting in loss of lives.
On GST several notifications have been issued (i.e. Notification No. 8 to 14) on 1st May, 2021 providing relaxations in filing and compliances owing to Covid-19. These mainly relate to extension of dates. Customs duty and IGST have been reduced/exempted on goods being used for COVID treatment. GSTN has issued new functionalities on GSTN Portal for ease of compliances.
CBIC in its recent board meeting held on 08.04.2021 has approved the reorganization of CBIC and wearing of uniform by CGST officers in the same manner as was being done under central excise regime.
Levy of GST on various goods being used for COVID treatment is in debate these days. While various quarters are demanding full exemption, Finance Minister has viewed that granting full exemption to these items will make the goods costlier as the cost of input tax credit (ITC) forego will be loaded to the customers. In fact, government may make such goods zero rated. Reduction in rates may make government pay refunds to taxpayers under inverted duty structure provision.
Reduction in Interest rate (GSTR-3B)
{Notification No. 08/2021 – Central Tax; 01/2021 – Integrated Tax; 01/2021 – UT Tax}
- Interest on delayed payment of tax for normal taxpayers has been reduced for the tax period
March 2021 and April 2021.
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Turnover in previous financial year
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Applicable Interest rate
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More than ₹ 5 crores
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9% for first 15 days from due date and 18% thereafter
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Upto ₹ 5 crores (Monthly and Quarterly filers)
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Nil for first 15 days from due date, 9% for next 15 days, and 18% thereafter
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Illustration:
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- Taxpayer having turnover in previous financial year more than ₹ 5 Cr.
- Return Type: GSTR 3B
- Return Period: March 2021
- Due Date: 20/04/2021
- Interest liability: 9% for the period 21/05/2021 to 05/05/2021 (15 Days); 18% after 05/05/2021
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- Taxpayer having turnover in previous financial year upto ₹ 5 Cr.
- Return Type: GSTR 3B
- Return Period: March 2021
- Due Date: 20/04/2021
- Interest Liability: Nil for the period 21/05/2021 to 05/05/2021 (First 15 days); 9% for the period 06/05/2021 to 20/05/2021 (Next 15 days); 18% after 20/05/2021.
- Interest on delayed payment of tax for Composition taxpayer for the quarter ending March 2021 has also been reduced to Nil for first 15 days from the due date; 9% for the next 15 days; and 18% thereafter.
Waiver of Late Fees (GSTR-3B)
{Notification No. 09/2021 – Central Tax}
- Waiver of Late fees for filing of Form GSTR 3B for the period March 2021 and April 2021 filed upto a specified time.
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Turnover in previous
financial year
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Period for which late fees has been waived
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More than ₹ 5 Cr
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15 days from due date
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Upto ₹ 5 Cr (monthly)
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30 days from due date
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Upto ₹ 5 Cr (QRMP)
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30 days from due date {Period Jan-March 2021}
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Illustration:
- Taxpayer having turnover in previous financial year more than ₹ 5 Cr.
- Return Type: GSTR 3B
- Return Period: March 2021
- Due Date: 20/04/2021
- Late Fees waiver: Till 05/05/2021
- Taxpayer having turnover in previous financial year upto ₹ 5 Cr.
- Return Type: GSTR 3B
- Return Period: March 2021
- Due Date: 20/04/2021
- Late Fees waiver: Till 20/05/2021
Extension of various due dates
{Notification No. 10/2021 – Central Tax; 11/2021 – Central Tax; 12/2021 – Central Tax; 13/2021 – Central Tax}
- Due date of following returns has been extended
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Return Type
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Return Period
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Extended Due date
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GSTR – 4
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Quarter ending March 2021
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31st May 2021
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ITC - 04
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Quarter ending March 2021
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31st May 2021
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GSTR – 1 (Monthly)
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April 2021
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26th May 2021
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GSTR – 1 (IFF)
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April 2021
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28th May 2021
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Condition of Rule 36(4) of CGST Rules, 2017 i.e. 105% of Eligible ITC from GSTR 2B, is to be seen cumulatively for the tax period April and May 2021 and cumulative adjustment to be done while filing return for the period May 2021
Time limit for completion or compliance of any action, by any authority or by any person, which falls during the period from the 15th April 2021 to 30th May 2021 is extended upto 31st May 2021
{Notification No. 14/2021 – Central Tax}
- All the compliance/ actions/ appeals/ orders/ notices/ replies which were pending to be done during the period 15.04.2021 to 30.05.2021 can be done upto 31.05.2021
- This relaxation does not apply to
- Time of Supply provision
- Provisions related to sub-section (3) of section 10, sections 25, 27, 31, 37, 47, 50, 69, 90, 122, 129
- E-way bill provision
- Time limit for issuance of order under section 54(5) and 54(7) of CGST Act, 2017, if falls between 15/04/2021 to 30/05/2021, then it is extended for 15 days after date of receipt of reply of notice from the registered person or 31/05/2021, whichever is later.
No IGST on Remdesivir, COVID-19 Vaccine, Oxygen concentrator, Ventilators etc, if imported free of cost
- The Government has provided ad hoc exemption from IGST on imports of specified COVID- 19 relief material donated from abroad. The exemption shall be available on goods such as Injection Remdesivir, Remdesivir Active Pharmaceutical Ingredients, Inflammatory Diagnostic (marker) kits, Oxygen concentrator, Medical Oxygen, COVID-19 vaccine, Ventilators etc. Earlier the Government has exempted customs duty on import of these goods.
- However, the exemption would be conditional and shall be available when goods are distributed free of cost for COVID relief. One of the important condition is that goods must be imported free of cost by a State Government or, any entity/relief agency/ statutory body, authorized in this regard for free distribution anywhere in India.
- It is also noteworthy that the exemption order shall apply to all such consignments pending clearance from Customs as on date of issue of order, i.e., May 3rd, 2021.
