Important GST Amendments and compliance relaxations - June 2021

[Shaubhik Gupta]

KEY AMENDMENTS IMPLEMENTED BY WAY OF NOTIFICATIONS DATED 01.06.2021

5. Amnesty scheme towards late fee for pending returns: As a welcome relief for business an Amnesty scheme, towards late fee imposable under Section 47 of the Central Goods and Services Tax Act, 2017 (CGST Act), on delayed filing of pending GSTR-3B returns for the tax periods from July, 2017 to April, 2021 (subject period), proposed by GST Council has been made effective.
5. Under the aforesaid scheme the late fee for non-furnishing FORM GSTR-3B is reduced/waived, if GSTR-3B returns for subject period are furnished between 01.06.2021 to 31.08.2021, as hereunder:

S.No.	Class of taxable person	Maximum late fee payable (in Rs.)
	Persons having tax liability as ‘nil’ in the subject period	250/- towards CGST[1] per return
	Other taxpayers	500/- towards CGST[2] per return

5. Rationalisation of late fee under Section 47 of the CGST Act, leviable on account of delay in furnishing return in FORM GSTR-3B and FORM GSTR-1: In order to reduce the burden of late fee on taxpayers for prospective tax periods (June 2021 onwards or quarter ending June 2021), the late fee is being capped as summarized in the table below:

S.No.	Class of taxable person	Maximum late fee payable (in Rs.)
	Persons having tax liability as ‘nil’ in GSTR-3B/ outward supply is ‘nil’ in GSTR-1	250/- towards CGST[3]
	Person having Annual Aggregate Turnover (AATO) in preceding FY upto ₹ 1.5 Crores	1,000/- towards CGST
	Person having AATO in preceding FY between ₹ 1.5 Crores to ₹ 5 Crores[4]	2,500/- towards CGST
	Composition taxpayers filing delayed GSTR-4 having tax liability as ‘nil’ in the return	250/- towards CGST
	Other Composition taxpayers filing delayed GSTR-4	1,000/- towards CGST
	Persons filing delayed GSTR-7	25/- towards CGST and to be capped to a maximum of 1,000/- towards CGST

Comments:

5. It is interesting to note that with effect from 18.05.2021, liability to pay interest, is linked to unpaid tax liability and, now stands delinked from the non-filing/late filing of GSTR-3B. It may also mean that prior to the aforesaid period i.e., upto 17.05.2021, the interest liability arises in cases only where neither the GSTR-3B return is filed/or is filed late, nor the tax liability is paid by the tax payer and in case any of the above condition is met, interest liability may not be strictly imposable from a reading of the unamended provision.
5. It is also noteworthy that although late fee for delayed filing of return in FORM GSTR-3B for the period July 2017 to April 2021 has been capped to a maximum of ₹ 500/- per GST return for CGST, however, interest liability will be attracted for late payment of tax liability to the Government exchequer. Secondly, there is seemingly an overlap between capping of late fee on delayed filing of return in GSTR-3B under proviso to Notification No. 19/2021 - Central Tax dated 01.06.2021, and the late fee relaxation granted specifically for the months of March, April, May 2021, under the said notification.

 

5. Clarificatory amendment regarding applicability of interest: A much-awaited clarity is provided by way of retrospective amendment^[5] in Section 50 of the CGST Act with effect from 01.07.2017, providing for payment of interest on net cash basis. The aforesaid amendment provides that the interest on tax payable in respect of supplies made during a tax period and declared in the return for the said period furnished after the due date in accordance with the provisions of section 39, shall be payable on the tax which is paid by debiting the electronic cash ledger.

5. Reliefs in compliance under Central Goods and Services Tax Act, 2017.

S.No.	Class of Taxpayers	Return	Period	Due date for filing under the CGST Act	Relief granted
	Taxpayer filing returns in FORM GSTR-1	FORM GSTR-1	May	11.06.2021	The date of filing of the return has been extended to 26.06.2021
	Taxpayers having an aggregate turnover > rupees 5 crores in the preceding FY	FORM GSTR-3B	May	20.06.2021	Applicable interest at the rate of 9% for failure to pay tax for first 15 days from the due date of liability to pay tax and applicable Interest at the rate of 18% for paying the tax thereafter. No late fees for filing of return in FORM GSTR-3B for first 15 days from the due date of furnishing of return.
	Taxpayers having an aggregate turnover upto ₹ 5 Crores in the preceding financial year and file monthly return		March	20.04.2021	No interest for the first 15 days from the due date, 9 per cent for the next 45 days, and 18 per cent thereafter. No late fees for filing of return in FORM GSTR-3B within 60 days from the due date of furnishing return.
			April	20.05.2021	No interest for the first 15 days from the due date, 9 per cent for the next 30 days, and 18 per cent thereafter. No late fees for filing of return in FORM GSTR-3B within 45 days from the due date of furnishing return.
			May	20.06.2021	No interest for the first 15 days from the due date, 9 per cent for the next 15 days, and 18 per cent thereafter. No late fees for filing of return in FORM GSTR-3B within 30 days from the due date of furnishing return.
	Taxpayers having an aggregate turnover of upto ₹ 5 Crores in the preceding financial year, filing quarterly returns and belonging to specified States-I[6]/II[7]	FORM GSTR-3B	March	22.04.2021[8]/24.04.2021[9]	No interest for the first 15 days from the due date, 9 per cent for the next 45 days, and 18 per cent thereafter.
			April	22.05.2021[10]/24.05.2021[11]	No interest for the first 15 days from the due date, 9 per cent for the next 30 days, and 18 per cent thereafter.
			May	22.06.2021[12]/24.06.2021[13]	No interest for the first 15 days from the due date, 9 per cent for the next 15 days, and 18 per cent thereafter.
			January-March 2021, quarter	22.04/2021/24.04.2021[14]	No late fee if returns are filed within 60 days of the due dates.
	Taxpayers paying tax under the composition scheme (furnishing the quarterly return)	FORM GST CMP-08	Quarter ending March, 2021	18.04.2021	Applicable interest for filing the return within first 15 days from the due date is ‘Nil’. Applicable interest for filing the return within the next 45 days is 9%. Applicable interest is 18% for filing the return thereafter.
	Annual return for taxpayers paying tax under Composition Scheme	FORM GSTR-04	Financial Year ending 31.03.2021	30.04.2021	Taxpayer can file return till 31.07.2021
	The time period for furnishing the declaration in FORM GST ITC-04, in respect of goods dispatched to a job worker or received from a job worker, during the period from 01.01.2021 to 31.03.2021 is extended.	FORM GST ITC-04	Quarter ending 31.03.2021	25.04.2021	Taxpayer can file return till 30.06.2021

5. Exclusion of ‘government department’ and ‘a local authority: ’a ‘government department, a local authority’ are now excluded from e-invoice mandate of obtaining Invoice Reference Number (IRN) and such entities may issue invoices without following the aforesaid stipulation.
5. The Companies^[15] are enabled to file returns in FORM GSTR-3B and FORM GSTR-1 or using invoice furnishing facility, verified through electronic verification code (EVC) during the period from the 27.04.2021 to 31.08.2021.
5. The condition stipulated in Rule 36(4)^[16] for availment of ITC, to apply cumulatively for the period April, May and June 2021 and the return in FORM GSTR-3B for the tax period ending June, 2021 or quarter ending June 2021, needs to be furnished with the cumulative adjustment of input tax credit for the said months in accordance with the condition under Rule 36(4).
5. A registered person may furnish the details[17], for the month of May, 2021, using IFF from the 01.06.2021 till 28.06.2021.
5. The time limit for completion or compliance of any action, by any authority or by any person, specified in, or prescribed or notified under the CGST Act, IGST Act or UTGST Act, falling for completion during 15.04.2021 to 29.06.2021, is extended upto the 30.06.2021, including for the purposes of:

1. Completion of any proceeding or passing of any order or issuance of any notice, intimation, notification, sanction or approval or such other action, by any authority, commission or tribunal under the provisions of the Act; or
2. Filing of any appeal, reply or application or furnishing of any report, document, return, statement or such other record under the provisions of the Act;

however, such extension of time-limit is not applicable for the compliance of the following provisions of the said Act, namely:

 

S.No.	Provisions	Description
	Chapter IV	Time and value of supply.
	Section 10(3)	Lapsing of option of composition when aggregate turnover during a financial year exceeds the limit specified under sub-section (1) or (2A) of Section 10.
	Section 25	Registration under the CGST Act
	Section 27	Registration of casual taxable person and non-resident taxable person
	Section 31	Issuance of tax invoice
	Section 37	Furnishing of return in FORM GSTR-1
	Section 47	Levy of late fee
	Section 50	Interest on delayed payment of tax
	Section 69	Arrest of person for offence
	39, except sub-section (3), (4) and (5)	Furnishing the return in FORM GSTR-3B and return by person under composition scheme
	Section 68 as applicable to e-way bill	Generation of e-way bill
	Rules made under the abovementioned provisions

5. The time limit for completion of action in respect of verification of the application of registration or approval falling in the period during 01.05.2021 to 30.06.2021 is extended upto 15.07.2021.
5. The time-limit stipulated for passing of refund order falling during 01.04.2021 to 29.06.2021 is extended to fifteen days after the receipt of reply to the notice from the registered person or 30.06.2021, whichever is later.
5. It is noteworthy that GST Council in its 43rd Meeting has clarified that wherever the limitation period has been extended by Hon’ble Supreme Court, the said extension will prevail. As per the above order of the Hon’ble Supreme Court, the period from 14.03.2021 stands excluded from computing the limitation period under all special and general laws.

For detailed discussion is visit GST Amendments and relaxations-June 2021

Disclaimer: The update is strictly meant for information purpose only. Professional advice needs to be sought for any specific query/ clarification and to understand the applicability to your specific circumstances before acting on the basis of the above information.

Shaubhik Gupta

Shaubhik is a seasoned lawyer with more than seven years of diverse experience in a leading law firm handling complex transaction advisory, due diligence and litigation for Fortune 500 Companies and big Indian Conglomerates from plethora of sectors.

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EMAIL: shaubhik.gupta@outlook.com

[1] Corresponding Notifications are awaited under respective State GST enactments and will accordingly be applicable towards the late fee waiver/reduction on SGST portion, once notified.

[2] Refer footnote 1 (Supra)

[3] Refer footnote 1 (Supra)

[4] A few proposals of the GST Council need more clarity.

[5] Section 112 of the Finance Act, 2021, amending Section 50 of the CGST Act by way of insertion of a proviso to sub-section (1), has come into force from 01.06.2021.

[6] Chhattisgarh, Madhya Pradesh, Gujarat, Maharashtra, Karnataka, Goa, Kerala, Tamil Nadu, Telangana or Andhra Pradesh or the Union territories of Daman and Diu and Dadra and Nagar Haveli, Puducherry, Andaman and Nicobar Islands and Lakshadweep

[7] Himachal Pradesh, Punjab, Uttarakhand, Haryana, Rajasthan, Uttar Pradesh, Bihar, Sikkim, Arunachal Pradesh, Nagaland, Manipur, Mizoram, Tripura, Meghalaya, Assam, West Bengal, Jharkhand or Odisha or the Union territories of Jammu and Kashmir, Ladakh, Chandigarh and Delhi

[8] Refer footnote 6 (Supra)

[9] Refer footnote 7 (Supra)

[10] Refer footnote 6 (Supra)

[11] Refer footnote 7 (Supra)

[12] Refer footnote 6 (Supra)

[13] Refer footnote 7 (Supra)

[14] Refer the footnotes 6 & 7 (Supra)

[15] Companies Registered under Companies Act, 2013.

[16] Rule 36(4) provides that the ITC to be availed by a registered person in respect of invoices/ debit notes, which have not been uploaded by the suppliers in Form GSTR-1, will be upto ten percent of eligible ITC available in respect of invoices or debit notes which have been uploaded by the suppliers in Form GSTR-1.

[17] Filing return in Form GSTR-3B quarterly and uploading the specific invoices using IFF for the first two months of a quarter as per Rule 59(2).