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GST Amnesty Scheme

By Annapoorna

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Updated on: Mar 27th, 2024

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11 min read

The GST Amnesty Scheme was introduced by the government to provide relief to taxpayers who missed filing GSTR-3B for the previous tax periods. In this article, get complete details of the applicability, benefit, and working of this scheme with the latest updates. Also, learn about the late fee relief, the issues that were unresolved and possible solutions.

Updates on Amnesty Scheme

31st March 2023
All the amnesty schemes recommended by the GST Council at the 49th GST Council meeting shall be in force between 1st April 2023 to 30th June 2023 by CGST notifications dated 31st March 2023.

18th February 2023
49th GST Council meeting-
1. Amnesty scheme 1: For pending returns in GSTR-4, GSTR-9 and GSTR-10. This scheme comes with a conditional waiver/ reduction of late fees.
2. Amnesty scheme 2: To help taxpayers whose GST registration has been cancelled due to the non-filing of tax returns. Under this, taxpayers can file for the revocation of GST registration which couldn’t be filed earlier.
3. Amnesty scheme 3: Conditional deemed withdrawal of best judgment assessment orders in past cases. This amnesty is available for taxpayers who could not file the concerned return within 30 days of the assessment order; however, they filed it with interest and late fee up to a specified date. Also, this benefit is available irrespective of filing an appeal or whether the appeal has been decided.
 

What is Meant by the GST Amnesty Scheme?

The GST Amnesty Scheme was first notified to cover periods from July 2017 up to September 2018. A one-time extension to the time limit was provided then. Taxpayers could file these pending returns on or before 31st March 2019.

Back in early 2020, several tax professionals and industry leaders urged the government to reopen the GST amnesty scheme for several months due to the COVID pandemic. The government finally acceded to their request. 

CBIC implemented the GST Amnesty Scheme for the second time through a notification dated 1st June 2021. It applies to all the pending GSTR-3B returns of previous tax periods between July 2017 and April 2021.

In February 2023, the GST Council at its 49th meeting recommended implementing GST amnesty scheme for taxpayers who have not yet filed GSTR-4, GSTR-10 and GSTR-9 of the past financial years. Also, the Council suggested providing relief to those whose GST registrations were cancelled by allowing them more time to revoke such cancellations. Further, the authorities would not invoke Section 62 for failure of certain taxpayers who did not furnish returns by time limit defined in notice if they filed on or before 30th June 2023.

All about GST Amnesty Scheme 2023

The CBIC issued fresh Central Tax notifications on 31st March 2023 to implement 2023 GST amnesty scheme. 

GST amnesty scheme 2023 notification pdf are issued in numbers 02/2023, 03/2023, 06/2023, 07/2023, and 08/2023 explained in the below table-

Notification NumberName of form/actionWho can availAmnesty benefitsValidity to avail benefit
02/2023GSTR-4 (quarterly/annual)Composition taxable persons who did not file GSTR-4 for quarters July 2017 to March 2019 or for the financial years from FY 2019-20 to FY 2021-22 on or before due dates(1) Other than Nil return - Late fee fixed at max Rs. 500 (i.e. Rs.250 each for CGST and SGST Act) per return. 
(2) Nil return - No Late fee
File between 1st April 2023-30th June 2023
03/2023GST REG-21: Application for revocation of cancellation of GST registrationAny taxpayer whose GST registration is cancelled by GST officer on or before 31st December 2022 for the following reasons-
- Failure to file returns for six months/two quarters continuously
- Failure to conduct business for continuous period of six months from the date of registration

And

Such taxpayer did not apply for revocation in REG-21 within 30 days from the date of service of the cancellation order by the GST officer.

Note: Irrespective of fact that appeal was filed and rejected on grounds of not meeting the time limit of revocation.
Can file REG-21 in extended time period

Condition: File all pending returns with taxes, late fee and interest, as applicable up to date of cancellation of GST registration.
File on or before 30th June 2023
06/2023Any pending GST returns potentially attracting Section 62 of the CGST Act Any taxpayer who defaulted filing of any GST return (GSTR-1/3B/4) within 30 days from the service of the assessment order issued on or before the 28th February 2023.Deemed withdrawal of best judgement assessment order under Section 62 of the CGST Act, even if an appeal is filed or decided.

Condition: File all such pending returns with taxes, late fee and interest, as applicable.
File on or before 30th June 2023
07/2023GSTR-9 (annual return)Registered regular taxpayers mandated to file GSTR-9 from FY 2017-18 to FY 2021-22 but have not filed on or before the respective due dates.Can file GSTR-9 at concessional late fee of maximum Rs.20,000. (i.e., 10,000 each under CGST and SGST Act). 
The late fee is waived off in excess of Rs.20,000 for delayed filing of GSTR-9 for years 2017-18 up to 2021-22.
File between 1st April 2023-30th June 2023
08/2023GSTR-10 (Final return)Taxpayers whose GST registration is cancelled within three months of the date of cancellation or date of order of cancellation, whichever is laterCan file GSTR-10 at a concessional late fee of maximum Rs.1,000. (i.e., 500 each under CGST and SGST Act). 
The late fee is waived off in excess of Rs.1,000 for delayed filing of GSTR-10.
File between 1st April 2023-30th June 2023

 

Validity of the GST Amnesty Scheme 2021

As per the latest Central Tax notification number 33/2021 issued on 29th August 2021, the validity of the GST amnesty scheme stands extended up to 30th November 2021 from the earlier deadline of 31st August 2021. It means that taxpayers who have pending GSTR-3B between July 2017 and April 2021, can file such returns on or before 30th November 2021 with a reduced maximum late fee.

Previously, as per the CBIC’s latest Central Tax notification number 19/2021 issued on 1st June 2021, the GST amnesty scheme applied from 1st June 2021 to 31st August 2021. Any taxpayer who hadn’t filed GSTR-3B before the due dates for tax periods from July 2017 to April 2021 could file within that deadline on the GST portal

Benefits of the GST Amnesty Scheme 2021

The taxpayers cannot file a particular tax period’s GSTR-3B without filing the previous ones. Moreover, suppose the taxpayer hasn’t filed GSTR-3B for six consecutive tax periods or three consecutive quarters. In that case, they may stand the risk of GST registration getting cancelled. It can impact their business as clients, or GST registered customers may refrain from dealing with you or cancel contracts making GSTR-3B substantial compliance for the smooth running of the company. 

The taxpayers will benefit from this relief as they need not pay hefty late fees, which otherwise discourage them from filing any pending GSTR-3B return. Further, it helps taxpayers restore their business after being severely affected by lockdowns and weak economic conditions due to the pandemic.

What is the Late Fee Reduction Under the GST Amnesty Scheme 2021?

The taxpayers will get a concession in the late fee payable under the GST Amnesty Scheme. The maximum late fee is restricted to Rs.1,000 per return (i.e. Rs.500 under CGST and 500 under SGST) for GSTR-3B with any tax liability other than a nil GSTR-3B filing. 

On the other hand, the maximum late fee payable for a nil GSTR-3B is fixed at Rs.500 per return (i.e. Rs.250 each under CGST and SGST). In other words, the late fee payable for such a return will be lower of the following two amounts. These are the total late fees as calculated under the Act for every day of delay and the maximum late fee as mentioned above.

For instance, suppose XYZ & Co hasn’t filed GSTR-3B of January 2021 due by 20th February 2021 but now wants to file on 2nd August 2021. A late fee as per the Act would have been Rs. 8,150 for 163 days of delay at Rs.50 per day of delay for GSTR-3B with tax liability. But maximum late fee under the scheme is restricted to Rs.1,000 for the return of GSTR-3B for January 2021. So, XYZ & Co is liable to pay a late fee of Rs.1,000 for filing such a return, the tax liability and the applicable interest under the Act.

Challenges and Issues Under the GST Amnesty Scheme

Although the scheme aims to provide relief to non-filers who want to continue their business by rightfully declaring GST data, it is not free from hurdles. Some challenges and issues came along with the GST Amnesty Scheme.

No relaxation in interest dues

Those having tax liability and who didn’t file GSTR-3B are not given a waiver of interest. Still, only the maximum late fee is relaxed for filing it before 31st August 2021.

Non-admissibility of input tax credit

Certain tax professionals question the non-admissibility of Input Tax Credit (ITC) under the GST Amnesty Scheme. Admissibility of ITC under this scheme is a genuine concern raised by tax experts. Although the amnesty scheme allows tax payment pending for previous periods, it is still silent regarding ITC claims in the same return of that preceding financial year.

The CGST Act prescribes the time limit for ITC claims. The ITC on a tax invoice or debit note issued in a financial year can be claimed by the earlier of two dates. These are the due dates of filing GSTR-3B for September of the year following the financial year and the annual return. 

For example, assume the due date to file GSTR-3B of September 2020 was 20th October 2020. The annual return in Form GSTR-9 is scheduled on 31st December 2020. Then, the maximum time to claim ITC for FY 2019-20 was 20th October 2020 in the GSTR-3B of September.

The government extended the time limit by late fee reduction for filing GSTR-3B of preceding tax periods. However, it has not pushed the time limit for claiming ITC for the same periods. So it legally disallows a taxpayer from reporting ITC while filing GSTR-3B of the past tax period. The recipient cannot claim such ITC under the amnesty scheme. 

No relief to late filing of GSTR-1 under the scheme

The GSTR-1 return is not covered under the scheme. So there is no late fee waiver or relief to file pending GSTR-1 for the same tax period as the GSTR-3B that the taxpayer intends to file.

Revocation of cancelled GST registration

Note that without an active GSTIN, taxpayers cannot file pending GSTR-3B returns.

The CBIC issued a press release and also the Central Tax notification number 34/2021 on 29th August 2021. As per this, the time limit to apply for revocation of cancellation of GST registration was extended up to 30th September 2021, if GSTINs were cancelled between 1st March 2020 to 31st August 2021 on account of non-filing of GSTR-3B [Section 29(2) clauses (b) and (c) of the CGST Act].

Till 29th August, there was no clarification about GSTINs already cancelled due to non-filing of past GSTR-3B returns about when and how it will be revoked or restored where the aggrieved taxpayer preferred an appeal.

Solutions for the Issues

The taxpayers must be provided with the full advantage of the scheme by looking into these aspects. The government should expand the scheme’s scope to include GSTR-1, GSTR-9, GSTR-10 and allow ITC of past periods where the time limit has expired. Majorly, options to revise returns must be provided to recipients of such ITC. Hence, the government must suitably take note of these anomalies and correct the legal gap at the earliest.

Now that you know everything about the GST Amnesty Scheme, it’s time to file 100% accurate GST returns on Clear GST solution to avoid hassles of missing deadlines while keeping the accuracy of data. No more hassles of calculating tax and late fees, as it’s automatically done for you. If it’s a nil return you have to file, then all you need is 30 seconds with Clear GST software. 

About the Author

I preach the words, “Learning never exhausts the mind.” An aspiring CA and a passionate content writer having 4+ years of hands-on experience in deciphering jargon in Indian GST, Income Tax, off late also into the much larger Indian finance ecosystem, I love curating content in various forms to the interest of tax professionals, and enterprises, both big and small. While not writing, you can catch me singing Shāstriya Sangeetha and tuning my violin ;). Read more

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Quick Summary

The GST Amnesty Scheme offers relief to taxpayers who missed filing GSTR-3B, with benefits and working details provided. Updates, late fee relief, and unresolved issues are discussed, along with the latest amnesty scheme 2023 details. Challenges include no relaxation in interest dues, non-admissibility of input tax credit, and no relief for late GSTR-1 filings. Solutions may involve expanding the scheme's scope and allowing ITC of past periods.

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