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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:
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
Last date without late fee or interest, as applicable
|Up to Rs. 5 crore in category A# States/UTs|
22nd Mar 2020
30th Jun 2020^
22nd Apr 2020
3rd Jul 2020^
22nd May 2020
6th Jul 2020^
12th Jul 2020
12th Sept 2020^
22nd Jul 2020
23rd Sept 2020^
22nd Aug 2020
27th Sept 2020^
1st Oct 2020*
1st Oct 2020
|Up to Rs. 5 crore in category B## States/UTs|
24th Mar 2020
30th Jun 2020^
24th Apr 2020
5th July 2020^
24th May 2020
9th July 2020^
14th Jul 2020
15th Sept 2020^
24th Jul 2020
25th Sept 2020^
24th Aug 2020
29th Sept 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.
Rate of Interest
Date of filing GSTR-3B
Number of days delayed
|June 2020||Nil till 23rd September 2020 and 9% p.a thereafter till 30th September 2020|
28th August 2020
28th September 2020
No interest for 63 days. Thereafter,
interest at 9% p.a. for 5 days applies.
28th October 2020
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.
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).
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.
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 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.