GST Amnesty Scheme:- To assist corporate industries and small businesses, the Finance Ministry announced in a press release the GST AMNESTY SCHEME FOR GSTR 3B LATE FEES to provide relief to small taxpayers. At the moment, an amnesty scheme is recommended to benefit approximately 89 percent of GST taxpayers. The 43rd GST Council meeting will be held via video conferencing on Friday, May 28th, 2021 in New Delhi under the chairmanship of Union Finance & Corporate Affairs Minister Smt. Nirmala Sitharaman.
Various issues such as the GST Amnesty Scheme, Relaxation in Returns Filings, GST exemption for hand sanitizers, temperature scanners, gloves, face masks, PPE Kits, and other associated medical equipment will be discussed. Amnesty scheme 2023 has been proposed to reduce late fees owed by small and medium-sized taxpayers. Taxpayers can now file their pending returns without gaining a high penalty. They can enjoy the benefit of the advantage of the GST Amnesty scheme’s reduced late fees.
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GST Amnesty Scheme 2023
The 43rd GST Council meeting, held on May 28, 2021, declared an Amnesty Scheme to provide taxpayers with relief from late fees for pending returns. Notification No. 19/2021 – Central Tax, dated 1st June 2021, confirms this. The scheme has been declared as part of one of the Trade Facilitation measures with the intention of relieving taxpayers of the burden of late fees.
The government is promoting the scheme in a variety of ways, including messages on the CBIC Portal, e-mails from range / divisional offices, WhatsApp messages from authorities, and so on. The scheme has been declared as part of one of the Trade Facilitation measures with the intention of relieving taxpayers of the burden of late fees.
Relaxation Period
Time period: From July 2017 to April 2021
This means that taxpayers can take advantage of the Amnesty Scheme on all GSTR 3B returns that have been pending from July 2017 until April 2021. The Department provided much-needed relief.
Relaxation Given in Late – Fee Payment:
Reduction or waiving of late fee as under–
| Return Type (GSTR– 3B) | Relaxation in Late Fee |
| In case of Nil Return (No tax liability for the said tax periods) | Maximum Late fee capped: Rs. 500/- (Rs. 250- each for CGST&SGST) per return |
| In case Return is not Nil (Tax liability is there for the said tax periods) | Maximum Late fee capped: Rs.1,000/- (Rs. 500- each for CGST&SGST) per return |
Time Period to Benefit from Scheme
GSTR– 3B must be filed between 1.06.2021 and 31.08.2021 to enjoy the advantage of the late fee rate (Reduced). In other words, outstanding GSTR 3B returns from July 2017 to April 2021 must be filed on or before August 31, 2021.
Relaxation Applicable from First July 2021
- Relaxation in Late fees for Return Filings of GSTR 3 B and GSTR 1
Rationalization of the late fee levied for failure to file a return in FORM GSTR-3B and FORM GSTR-1 for the prospective tax period (June 2021 onwards).To lessen the burden on taxpayers, the late fee has been capped as follows:
| Category of Taxpayers | Relaxations in Late Fees |
| 1. Taxpayers having nil tax Liability (Nil Return) | Rs. 500 (Rs. 250 each for CGST&SGST) per return |
| 2. For Taxpayers having Tax Liability | |
| a) For taxpayers having aggregate turnover in preceding Financial year to Rs. 1.5 crores | Rs. 2000 (Rs. 1000 each for CGST&SGST) per return |
| b) For taxpayers having aggregate turnover in preceding FINANCIAL YEAR between Rs. 1.5 crores to Rs. 5 crores | Rs. 5000 (Rs. 2500 each for CGST&SGST) per return |
| c) For taxpayers having aggregate turnover in preceding FINANCIAL YEAR above Rs. 5 crores | Rs. 10000 (Rs. 5000 each for CGST&SGST) per return |
- Relaxation in Late fees for Return Filings of GSTR 4
Rationalization of the late fee imposed on composition taxpayers who fail to file their FORM GSTR-4 returns on time for prospective tax periods (FY 21-22 onwards).
| Category of Taxpayers | Relaxations in Late Fees |
| 1. Taxpayers having nil tax Liability (Nil Return) | Rs. 500 (Rs. 250 each for CGST&SGST) per return |
| 2. For Other Taxpayers | Rs. 2000 (Rs. 1000 each for CGST&SGST) per return |
- Relaxation in Availment of ITC under GST
GST-related compliance relief Taxpayers Amendment in Rule 36(4) of the CGST Rules Relaxation in Input Tax Credit ITC Availability.
Relaxation: A 105 percent cap on ITC availment will be applied on a cumulative basis for tax periods April, May, and June 2021, and will be applied in the return GSTR– 3B for the Tax Period June 2021.
- Relaxation in Late fees for Return Filings of GSTR 7
Rationalization of the late fee imposed on Tax Deductors at Source who fail to file their returns in FORM GSTR-7 on time for prospective tax periods (June 2021 onwards).
Relaxation Provided
| Filing Particulars | Relaxations |
| Late Fee payable for delayed furnishing of Return in Form GSTR – 7 | Rs. 50 Per day (Rs. 25 each CGST&SGST) per return |
| The maximum amount of Late Fee Capped | Rs. 2000 (Rs. 1000 each for CGST&SGST) per return |
Features of GST Amnesty Scheme 2023
The scheme is diverse enough to cover the tax period from July 1st, 2017 to April 30th, 2021. The scheme’s key features are as follows:
- This Scheme is applicable from July 1st, 2017 to April 30th, 2021.
- The Scheme applies to taxpayers who have not filed returns for the above period by May 31, 2021.
- The Scheme’s window will be open from the 1st of June, 2021 to the 31st of August, 2021.
- Maximum Late Fees applicable per return for returns with NIL Liability will be Rs.500/- (CGST Rs.250+ SGST Rs.250) and Rs.1, 000/- (CGST Rs.500 + SGST Rs.500) for returns with Tax Liability.
- The Scheme does not apply to returns filed before June 1, 2021.
Drawbacks of the Scheme
Definitely, The Scheme is beneficial to taxpayers, but it is not without challenges at the Departmental and Taxpayer levels. The scheme appears to be very clear at first glance, but it is likely to encounter certain hurdles, which are as follows –
- No amnesty given / clarifications issued for Revocation of cancelled GSTIN
Firstly, no amnesty has been announced and no clarification has been issued by the government in cases where GSTIN has been canceled, and the period for filing an application for revocation as well as filing an appeal to an appellate authority has already expired.
According to the provisions of the GST Act,
- If a taxpayer has not filed returns for a continuous period of six months or
- If a taxpayer who pays tax under the composition scheme fails to file returns for three consecutive tax periods.
On conditions, if such a revocation application is denied, the taxpayer has three months from the date of communication of the order of cancellation to file an appeal with an appellate authority. In such cases, it is unclear whether an appeal filed after the time limit allowed by the act will be allowed or not. If permitted, will it be disposed of at least by the 15th of August, i.e. 15 days before the scheme’s expiration date?
Without activating the GSTIN, taxpayers cannot enjoy the benefit from the waiver of late fees scheme, and the scheme’s success rate may be lower.
- No relief for claiming and utilising ITC which is subject to Section 16(4) of GST Act
Section 16(4) of the GST Act prohibits taxpayers from claiming ITC if GSTR 3B is filed after the due date for filing GSTR 3B for the month of September following the end of the fiscal year to which such invoice or debit note relates, or the filing of the relevant annual return, whichever is later.
It is possible that the majority of taxpayers did not file GSTR 3B due to liquidity issues. As a result, tax authorities may challenge the eligibility of ITC claimed for the period July 2017 to March 2020 when GSTR 3Bs are filed under this Amnesty Scheme. The period wise availability of ITC is summarized as follows:
| Period for Return Filed (II) | Last date for availing ITC as per Section 16(4) (III) | Remark (IV) |
| July 2017- March 2018 | 31/03/2019 | ITC is not available if GSTR 3B for the period mentioned in column (II) is filed under Amnesty. |
| April 2018- March 2019 | 20/10/2019 | ITC is not available if GSTR 3B for the period mentioned in column (II) is filed under Amnesty. |
| April 2019- March 2020 | 20/10/2020 | ITC is not available if GSTR 3B for the period mentioned in column (II) is filed under Amnesty. |
| April 2020- March 2021 | 20/10/2021 | ITC is available if GSTR 3B for the period mentioned in column (II) is filed under Amnesty. |
- No Relaxation in late fees for delay in filing of GSTR 1
If your registration is canceled due to a failure to file GSTR 3B, you will be unable to file GSTR 1. In the scheme, no waiver or relief is provided for such an occurrence.
As we all know, the system of filing GST Returns envisioned in the Act cannot be implemented in practice. According to the original scheme for filing GST returns, a monthly GST return, GSTR 3 (currently GSTR 3B), cannot be filed without first filing GSTR 1. Such interlinking is no longer required in the current GST return filing system.
- No relief for claiming and utilising ITC to Recipients on Invoices reported by Suppliers in GSTR 3B and GSTR 1 filed under Amnesty Scheme
According to the interpretation, the Amnesty Scheme will not provide immunity to the recipient of Goods and/or Services from claiming the ITC on GST paid by the supplier of Goods and/or Services under this scheme from July 2017 to March 2020. As previously stated, the GST return filing as envisioned by the legislators has yet to be implemented. The reason for this is that many taxpayers are unable to claim the ITC even though they have already paid GST to suppliers of Goods and/or Services who are not complying with filing requirements.
As an example, the reflection of an invoice in GSTR 2A / GSTR 2B, which has become a mandatory requirement for claiming ITC. This condition is ambiguous until the insertion of new clause (aa) in Section 16(2) of the GST Act by Finance Act 2021 on March 28, 2021.
Hence, it is possible that the recipient of the Goods and/or Services has not claimed and used the ITC on invoices that have remained unreported due to non-filing of returns in the past. However recipients of Goods and/or Services are permitted to avail and use the ITC as described above, they will be able to release the GST amount held up by them due to non-payment of GST or non-filing of GST Returns by Supplier, which will have a positive impact on overall liquidity in the economy.
- Possible Solutions
It appears that the scheme of a late fee waiver is not a literal Amnesty. It is only a “waiver of late fees scheme” with very specific and targeted late fee relaxation. This is referred to as amnesty when such relaxation is accompanied by various administrative and legal reliefs, such as
- Late Fee Waiver for GSTR 1, GSTR 9 and GSTR 9C, GSTR 10, GSTR 4, and so on.
- Allowing ITC for the previous period by easing the application of Section 16(4), Rule 36(4), and so on.
Knowing the difficulties encountered during the initial phase of GST implementation, now is the appropriate time to implement the Mega Amnesty, which will cover all of the aforementioned legal and administrative issues as a one-time opportunity for taxpayers.
The government can announce such an amnesty by issuing a Removal of Difficulty Order under Section 174 of the GST Act, passing an ordinance, or any other legal means it deems appropriate.
Such a hand-holding measure will benefit all taxpayers by reducing the burden on the judiciary, saving the government money and time while also boosting the inner spirit of One Nation, One Tax.
FAQ’s
The GST Amnesty Scheme 2022 is a program that waives late fees for the late filing of returns. The two main returns are GSTR 1 and GSTR 3b. These returns are subject to late fees if they are not filed on time. Late fees are levied even if the turnover is zero. Many taxpayers failed to file their returns, resulting in a large number of late fees. This late fee is assessed on a monthly basis per return. Even for a small business, it could cost lakhs of rupees. The amnesty scheme 2021 is being implemented to waive late fees for the late filing of these returns.
This amnesty scheme is open to all registered taxpayers under a regular levy.
The GST amnesty scheme 2021 extends from July 2017 to June 2021. During this time, any return can be filed under the scheme. The benefit has been available since the inception of GST and continues to this day.
Amnesty schemes do not offer refunds. As a result, any late fees paid by a taxpayer are non-refundable. Furthermore, the scheme only benefits taxpayers who file their returns within the time frame specified. Any return filed prior to that time, even if filed earlier, is ineligible for the benefit under the scheme.
A. No, the late fee is waived only for returns filed within the deadline. It can’t be before the Scheme is announced.
Late fees for normal returns are Rs. 500 for CGST and Rs. 500 for SGST per return.
Late fees for NIL returns are Rs. 250 for CGST and Rs. 250 for SGST per return.
Notification No. 19/2021 contains provisions relating to the GST amnesty scheme.
No, the Amnesty Scheme only applies to late fees. It has nothing to do with the ITC restriction imposed by Section 16. (4).