GST Amnesty Scheme: Everything you need to know

As per Section 47(1) of the CGST Act, 2017 and respective State GST Act(s) the late fee for filing of returns , including GSTR-4 / GSTR-10, is Rs 100/- per day ( each for CGST and SGST) subject to maximum of Rs 5000/-(each for CGST and SGST). Thus total late fee for delay was Rs 200 per day subject to maximum of Rs 10,000/- for each return.

Section 20 of the IGST Act,2017 provides application of certain provisions of the CGST Act, 2017 or rules made thereunder, shall mutatis mutandis apply, so far as may be, in relation to IGST as they apply in relation to central tax as if they are enacted under the IGST Act. However an exception to this is in regard to late fee as Sec 20(viii) of the IGST Act, 2017 clearly excludes late fee from its ambit. Accordingly, there is no separate late fee levied under IGST Act, 2017.

However late fee is applicable under UTGST Act, 2017 as per Section 21(ix), as application of late fee has not been excluded therein. Thus we can conclude that late fee shall be applicable under CGST Act and SGST (supply within State) or UTGST (supply within Union Territory).

Due to the heavy late fee of maximum of Rs 10,000/- per return, many tax payers were not able to file thier pending returns. Although the Govt. in past also has launched the amnesty scheme, but still many tax payers could not file thier GSTR-3B returns.

Considering the above and also the ongoing Covid-19 pandemic, the GST Council in its 43rd Meeting held on 28th May 2021 has interalia introduced GST Amnesty Scheme for reducing the late fee on delayed filing of GSTR-3B. Although it is a late fee relaxation scheme, it named as GST Amnesty Scheme.

The GST Amnesty scheme has been introduced in order to provide relief to the taxpayers wherein the late fee for non-furnishing FORM GSTR-3B for the tax periods from July, 2017 to April, 2021 has been reduced / waived as under: –

1. late fee capped to a maximum of Rs 500/- (Rs. 250/- each for CGST & SGST) per return for taxpayers, who did not have any tax liability for the said tax periods i.e. for NIL returns;
2. late fee capped to a maximum of Rs 1000/- (Rs. 500/- each for CGST & SGST) per return for other taxpayers i.e. where tax liability was there;

The reduced rate of late fee would apply if GSTR-3B returns for these tax periods are furnished between 01.06.2021 to 31.08.2021.

In other words in cases the taxpayer does not have tax liability in the FORM GSTR-3B being filed now for a period, the late fee will be restricted to Rs 500/- per return instead of a maximum of Rs 10,000/- per return which is the normal maximum late fee applicable per return. Thus a maximum saving per return of Rs 9500/-.

In other cases i.e. where a tax payer has a tax liability in the FORM GSTR-3B being filed now for a period, the late fee will be restricted to Rs 1000/- per return instead of a maximum of Rs 10,000/- per return which is the normal maximum late fee applicable per return. Thus a maximum saving per return of Rs 9000/-.

It may be noted that due interest will be required to be paid in cases where there is tax liability required to be paid in cash in GSTR-3B.

Meaning of taxpayer does not have tax liability:

The expression ‘does not have tax liability’ should mean the absence of any liability under forward charge and reverse charge. Accordingly, in case a taxpayer has some supplies made on which tax is payable but has an amount of ITC of equivalent amount also which means entire tax liability is paid through ITC, in such cases late fee applicable will be Rs 1000/- per return. Also for months where reverse charge liability is there, the late fee would be Rs 1000/- as same is a tax liability that too which need to be paid in cash.

However, in cases where a taxpayer has NIL output tax liability / Nil reverse charge liability despite having ITC, the late fee now payable under the new GST Amnesty Scheme decided upon by GST Council will be Rs 500/- per return.

Will late fee already paid be refunded:

There is no such mention in the Press Release issued after GST Council meeting, rather it has specifically been stated that reduced rate of late fee would apply if GSTR-3B returns for these tax periods (July, 2017 to April, 2021) are furnished between 01.06.2021 to 31.08.2021. From this, it appears that no refund will be made to the honest taxpayers who have duly filed their GSTR-3Bs by paying due late fee.

Also Read: GST Audit to be abolished from FY 2020-21

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Frah Saeed

Frah Saeed is a law graduate specializing in the core field of indirect taxes and is the Co-founder of taxwallah.com. She has authored many publications on GST and is into full-time consultancy on GST to big corporates. She as a part of taxwallah.com heads a team comprising of Chartered Accountants and Advocates and plays a key role in our mission to disseminate GST knowledge to all.