COVID-19: GST Compliance Relief Measures and Clarifications

The Hon’ble Union Finance Minister had announced several relief measures to cater to the taxpayers affected by the countrywide lockdown in this pandemic situation. The Central Board of Indirect Taxes and Customs (CBIC) has also issued a set of notifications regarding the due date extensions, e-way bills and provisional ITC.

Even after all these announcements and notifications, taxpayers faced a few challenges. To provide more understanding, the CBIC has issued detailed circulars about GST compliance relief measures and clarifications.

This article covers the relief measures and clarifications issued via:

Circular No: 141/11/2020 dated 24 June 2020

The clarifications given in this circular pertain to CGST notifications 51/2020 and 52/2020, as follows:

Staggered Interest calculation for Taxpayers with an aggregate turnover of more than Rs 5 crore

The large taxpayers filing GSTR-3B for tax periods- February, March and April 2020 could make tax payments before 4th April, 5th May and 4th June 2020 respectively without interest.

However, if they still missed these dates but paid tax dues and filed these GSTR-3B returns on or before 24th June 2020, then interest will not be charged up to 4th April, 5th May and 4th June 2020 (i.e first fifteen days from original due date of respective GSTR-3B). Thereafter, interest will be calculated at a total of 9% p.a. up to the actual date of payment and filing.

However, if they still miss 24th June 2020 extended deadline to pay tax and file GSTR-3B, then the interest at 18% p.a. shall apply from 24th June 2020 onwards in addition to the above 9% p.a calculated up to 24th June 2020.

Sl no	Date of filing GSTR-3B	Number of days of delay	Interest
1	3rd May 2020	13	No interest
2	20th May 2020	30	No interest for 15 days. Thereafter, interest at 9% p.a. for 15 days applies.
3	20th June 2020	61	No interest for 15 days, thereafter interest at 9% p.a. for 46 days applies.
4	24th June 2020	65	No interest for 15 days, thereafter interest @9% p.a. for 50 days applies.
5	30th June 2020	71	No interest for 15 days, thereafter interest @9% p.a. for 50 days and interest at 18% p.a. for 6 days applies.

Interest calculation for taxpayers with an aggregate turnover equal to or below Rs 5 crore

For small taxpayers, the circular points out that no interest will be charged till the specified dates for GSTR-3B filing, as given below.

Annual Turnover in the Previous FY	Period	Due date	Last date without late fee or interest, as applicable
Up to Rs. 5 crore in category A# States/UTs	Feb 2020	22nd Mar 2020	30th Jun 2020^
	Mar 2020	22nd Apr 2020	3rd Jul 2020^
	Apr 2020	22nd May 2020	6th Jul 2020^
	May 2020	12th Jul 2020	12th Sept 2020^
	Jun 2020	22nd Jul 2020	23rd Sept 2020^
	Jul 2020	22nd Aug 2020	27th Sept 2020^
	Aug 2020	1st Oct 2020*	1st Oct 2020
Up to Rs. 5 crore in category B## States/UTs	Feb 2020	24th Mar 2020	30th Jun 2020^
	Mar 2020	24th Apr 2020	5th July 2020^
	Apr 2020	24th May 2020	9th July 2020^
	May 2020	14th Jul 2020	15th Sept 2020^
	Jun 2020	24th Jul 2020	25th Sept 2020^
	Jul 2020	24th Aug 2020	29th Sept 2020^
	Aug 2020	3rd Oct 2020*	3rd Oct 2020

For filings done after the specified dates, a lower rate of 9% p.a would apply till 30th September 2020. However, if filing of GSTR-3B for these months is completed after 30th September 2020, normal rate of interest i.e. 18% per annum shall be charged for the remaining period of delay upto the actual date of filing.

Sl no	Tax period	Rate of Interest	Date of filing GSTR-3B	Number of days delayed	Interest
1	June 2020	Nil till 23rd September 2020 and 9% p.a thereafter till 30th September 2020	28th August 2020	37	No interest
2			28th September 2020	68	No interest for 63 days. Thereafter, interest at 9% p.a. for 5 days applies.
3			28th October 2020	98	No interest for 63 days. Thereafter, interest at 9% p.a. for 7 days and interest at 18% p.a. for 28 days applies.

Late fee computation

The conditional late fee waiver for GSTR-3B was extended upto the tax periods upto July 2020 for small taxpayers with new deadlines. If returns are not furnished on or before the dates specified in the CGST notification 52/2020, dates listed in the above table, then late fee shall be payable from the due date of return, till the date on which the return is filed.

Circular No: 138/08/2020 dated 06 May 2020

The CBIC has issued another CGST circular number 138/08/2020 on 06 May 2020. It further clarifies the extension of ITC-04 due date, the extension of timeline for merchant exports and procedures to be followed focussing on the Insolvency and Bankruptcy Code (IBC).

• The form ITC-04 is to be filed by the principal manufacturer every quarter, to submit the details of goods sent to or received from his job workers. The CBIC issued the notification no: 35/2020 for extension of due dates, and there is an ambiguity whether the due date of ITC-04 is covered in this notification. Now, the CBIC has clarified that the filing of ITC-04 for the January-March 2020 quarter is extended till 30 June 2020 vide the CGST notification number 35/2020.
• Usually, the merchant exporter has to export the goods within 90 days from the date of a tax invoice by the registered supplier. The circular clarifies that the merchant exporters also get an additional time limit until 30 June 2020 if the completion of 90 days period falls within 20.03.2020 to 29.06.2020. This extension will benefit the suppliers who are charging a concessional GST rate of 0.1% on the merchant exporter transactions.
• The CBIC had issued detailed procedures for the Interim Resolution Professionals (IRP) on 21 and 23 March 2020 to be followed during the Corporate Insolvency Resolution Process (CIRP). This circular clarifies few things regarding the GST registration and GST returns filing by the IRP/RP.
  • Generally, the IRP has to obtain fresh GST registration for the entity under CIRP within 30 days of his appointment, and they are facing difficulty in obtaining registration during the period of the lockdown. Hence, the circular clarified that the IRP could get a fresh GST registration within thirty days of his appointment or by 30 June 2020, whichever is later.
  • An IRP need not obtain a fresh GST registration for the entity under CIRP, in case the corporate debtor regularly filed GSTR-1 or GSTR-3B for all the tax periods before his appointment.
  • Only one GST registration by IRP is required to be obtained, irrespective of changes done later to the appointment of IRP or Resolution Professional (RP). In case the IRP is not continued as RP, and a separate RP is appointed, it is sufficient for the RP to amend the authorised signatory details under the new GSTIN. However, if the past IRP fails to share the credentials with the appointed RP to allow amendments, the latter can approach the jurisdictional authority as the primary signatory.

Circular No: 137/07/2020 dated 13 April 2020

1. The circular refers to the advance payments made to the service providers for any future services that later got cancelled due to the lockdown. Let’s understand this with an illustration:

Two parties have agreed for a service, and the buyer has paid an advance amount to the service provider. But later on, the contract gets cancelled for any reason, including the lockdown. The service provider could have acted in either of the two ways.

(a) The service provider may have issued a tax invoice for the entire transaction value and deposited the GST amount with the department before the lockdown.

Now, he must issue a credit note to the recipient for the same value, including GST. The credit note must be declared in GSTR-1 of the month in which the credit note was issued and subsequently adjusted in GSTR-3B.

If there is no sufficient outward tax liability in GSTR-3B against which the credit note can be adjusted. In such cases, form RFD-01 can be filed to claim this GST by selecting “Excess payment of tax if any”.

(b) The service provider may have issued a receipt voucher acknowledging the advance amount received by him, without raising any tax invoice. He would have also deposited the GST amount with the department.

In such a case, after the contract gets cancelled, he must issue a refund voucher to the recipient for negating the transaction effect. Subsequently, he can claim the GST refund by filing form RFD-01 under the category “Refund of Excess Payment of Tax”.

2. The circular clarifies the GST treatment of sales returns, where the tax invoice has already been issued. Similar to the first case mentioned above, the supplier must issue a credit note, declare the same in GSTR-1 and GSTR-3B of the relevant month in which the credit note was issued. Any tax adjustment which is not possible in GSTR-3B shall be claimed as a refund in Form RFD-01 by choosing the category as “Excess Payment of Tax if any”.

3. The circular clarifies that the validity of the Letter of Undertaking (LUT) stands extended for the FY 2019-20 until a fresh LUT is filed for the FY 2020-21. In other words, the exporters who intend to export without paying Integrated GST (IGST) can continue to do so in the current financial year.

They must quote the LUT reference number of the FY 2019-20 in their export documents. The time limit to file LUT for the FY 2020-21, which previously expired on 31 March 2020, has been deferred up to 30 June 2020.

4. The Tax Deducted at Source (TDS) under Section 51 of the CGST Act is due to be deposited between 20 March 2020 and 29 June 2020 can be deposited with the government by 30 June 2020. No interest shall be charged if the TDS is deposited and Form GSTR-7 is filed on time.

The same rule applies for Tax Collected at Source (TCS) under Section 52 of the CGST Act. Hence, even the e-commerce operators get an extended time limit to deposit TCS with the government and file the return in Form GSTR-8.

5. The circular spoke of the extension of the two-year time limit for claiming GST refund that expired on 31 March 2020. The circular explicitly states that such taxpayers may apply in Form RFD-01 by 30 June 2020 and not 29 July 2020.

Although most of these clarifications are dictated in the GST Law, these times of crisis may leave businesses, especially the MSMEs, in a pool of doubts. Accordingly, the circular acts as ready-reference material to help the companies make decisions quickly and with minimum professional help. We can expect more of such clarifications from the CBIC in the days to come.

Circular No: 136/06/2020 dated 03 April 2020

1. The e-way bills validity has been extended to 30 April 2020, where its validity period expires between 20 March 2020 and 15 April 2020.
2. The due date for submission of the form CMP-08 by the composition dealers is now pushed to 07 July 2020 for the January-March 2020 quarter. Also, the annual return (GSTR-4) due date for the FY 2019-20 has been extended till 15 July 2020 from 30 April 2020.
3. The taxpayers who want to opt into the composition scheme for the FY 2020-21 had to file the form CMP-02. The due date for the same has been pushed to 30 June 2020 from 31 March 2020. Accordingly, the form ITC-03 can now be filed by 31 July 2020.
4. The GSTR-3B due dates have been shifted to June 2020 for all the return periods from February to April 2020. Even though the due dates have not been extended, the late fee has been waived off for taxpayers with an annual aggregate turnover of less than Rs 5 crore. Also, the GSTR-3B filing will be in a staggered manner based on the annual turnover recorded in the previous financial year.

Here is the list of extended due dates for GSTR-3B:

Date	Purpose	Period	Category of Taxpayers (Based on Annual Aggregate Turnover)
4th April	Payment of GST	Feb’20	Exceeding Rs 5 crore in the previous financial year can pay GST without interest
5th May	Payment of GST	Mar’20	Exceeding Rs 5 crore in the previous financial year can pay GST without interest
4th June	Payment of GST	Apr’20	More than Rs 5 crore in the previous financial year can pay GST without interest
24th June	GSTR-3B	Feb, Mar, & Apr’20	More than Rs 5 crore in the previous financial year without the payment of a late fee, but with interest as may apply.^
27th June	GSTR-3B	May’20	More than Rs 5 crore in the previous financial year
29th June	GSTR-3B	Feb & Mar’20	More than Rs 1.5 crore up to Rs 5 crore in the previous financial year without the payment of late fee and interest
30th June	GSTR-3B	Feb’20	Up to Rs 1.5 crore in the previous financial year without payment of late fee and interest
30th June	GSTR-3B	Apr’20	More than Rs 1.5 crore up to Rs 5 crore in the previous financial year without payment of late fee and interest
3rd July	GSTR-3B	Mar’20	Up to Rs 1.5 crore in the previous financial year without payment of late fee and interest
6th July	GSTR-3B	Apr’20	Up to Rs 1.5 crore in the previous financial year without payment of late fee and interest
12th July	GSTR-3B	May’20	Up to Rs 5 crore in the last FY, registered in category X states or UTs#
14th July	GSTR-3B	May’20	Up to Rs 5 crore in the last FY, registered in category Y states or UTs#

^Interest must be paid for delay in GST payment being Nil for first 15 days from 20th of relevant month and thereafter calculated at 9% p.a. up to the actual date of payment (if paid within 24th June 2020). Note that interest at 18% p.a. shall apply if GST liability is not paid before 24th June 2020 for the entire period of delay.

#Category X: Chhattisgarh, Madhya Pradesh, Gujarat, Maharashtra, Karnataka, Goa, Kerala, Tamil Nadu, Telangana, Andhra Pradesh, the Union Territories of Daman and Diu and Dadra and Nagar Haveli, Puducherry, Andaman and Nicobar Islands and Lakshadweep.

#Category Y:  Himachal Pradesh, Punjab, Uttarakhand, Haryana, Rajasthan, Uttar Pradesh, Bihar, Sikkim, Arunachal Pradesh, Nagaland, Manipur, Mizoram, Tripura, Meghalaya, Assam, West Bengal, Jharkhand, Odisha, the Union Territories of Jammu and Kashmir, Ladakh, Chandigarh and New Delhi.

• The GSTR-1 for the March, April and May 2020 has been extended till 30 June 2020. The GSTR-1 due date for the quarter ending on 31 March 2020 has also been extended till 30 June 2020.
• There is an important update about the provisional input tax credit (ITC) claims. The rule 36(4) of the CGST Rules, 2017 allowed a taxpayer to claim a provisional ITC only to the extent of 10% of the eligible credit available in GSTR-2A while filing their GSTR-3B. It involved adjusting the last month’s provisional ITC claims with the actual invoices uploaded in the current month.

  The government has relaxed this requirement of adjusting on a month-to-month basis up to September 2020. Accordingly, the rule shall apply cumulatively for February to August 2020, and a cumulative adjustment can be made in the GSTR-3B return of September 2020.

• All the other GST compliance falling due between 20 March 2020 and 29 June 2020 shall stand extended till 30 June 2020.