Explore GST Amnesty Scheme 2023: Relief for Non-filers and Late Filers

Last Updated : Sept. 15, 2023, 4:56 p.m.

The government has reintroduced the GST Amnesty Scheme 2023 to relieve taxpayers who failed to file GSTR-3B for earlier tax seasons. Get detailed information on this system’s applicability, advantages, and operation in this post, along with the most recent changes. Learn about the late fee reduction, the unaddressed problems, and potential remedies.

What Does the GST Amnesty Scheme 2023 Mean?

The initial notification of the GST Amnesty Scheme 2023 covered the period from July 2017 to September 2018. It was then given a one-time extension. Taxpayers were allowed to submit these outstanding returns by March 31, 2019, or earlier. Several tax experts and business leaders encouraged the government to reinstate the GST amnesty programme in early 2020 because of the COVID-19 pandemic. Finally, the government granted their plea. A notification from CBIC on June 1, 2021, marked the second time the GST Amnesty Scheme 2023 was implemented. It applies to all outstanding GSTR-3B returns for prior tax years beginning in July 2017 and concluding in April 2021.

The GST Council recently recommended establishing a GST amnesty Scheme 2023 programme for customers who have not filed GSTR-4, GSTR-10, and GSTR-9 of the prior fiscal year at its 49th meeting in February 2023. The Council also recommended giving persons whose GST registrations were terminated extra time to reverse those cancellations to alleviate their situation. Furthermore, if certain taxpayers file on or before June 30, 2023, the government will not rely on Section 62 to hold them accountable for failing to provide returns by the deadline specified in the notice.

Status of the GST Amnesty Plan for 2021

The GST Amnesty Scheme’s validity has been extended from its expiration date of August 31, 2021, to November 30, 2021, per the most recent Central Tax Notification number 33/2021, released on August 29, 2021. Accordingly, taxpayers who have unfiled GST-3B during July 2017 and April 2021 may do so on or before November 30, 2021, with a lower late cost. Previously, the GST Amnesty Scheme 2023 was in effect from June 1, 2021, through August 31, 2021, as per the CBC’s most recent Central Tax Notification, number 19/2021, released on June 1, 2021. Any customer who has not submitted GSTR-3B by the deadlines for tax periods beginning in July 2017 through April 2021 may do so via the GST site by that date.

Advantages of the GST Amnesty Plan for 2021

The taxpayers cannot submit the GSTR-3B for one tax period without submitting the ones from the previous periods. Furthermore, imagine that the taxpayer has missed filing GSTR-3B for three consecutive quarters or six straight tax periods. In that instance, they risk having their GST registration cancelled. Customers who are GST-registered may choose not to do business with you or terminate contracts as a result, which would make GSTR-3B compliance essential for the efficient operation of the company. The taxpayers will appreciate the respite because they won’t have to pay the steep late costs that might otherwise deter them from completing any outstanding GSTR-3B returns. Additionally, it aids taxpayers in rebuilding their businesses after being badly harmed by lockdowns and the pandemic’s weak financial landscape. The GST Amnesty Scheme 2023 has been well received by many small firms since it allows them to make amends for past errors without suffering severe economic repercussions.

What does the GST Amnesty Scheme 2021 Late Fee Reduction entail?

The late fee owed under the GST Amnesty Scheme 2023 will be reduced for taxpayers. For GSTR-3Bs with any tax liability apart from a nil GSTR-3B filing, the maximum late fee is limited to Rs. 1,000 per return (i.e. Rs. 500 under CGST and Rs. 500 under SGST). The highest possible late price, on the other hand, is fixed at Rs. 500 per return for a nil GSTR-3B (i.e., Rs. 250 under CGST and SGST). In other words, whichever of the two subsequent amounts is lesser will be charged as the late fee for such a return. These include the total late costs determined by the Act for each day of delay in addition to the minimum late fee previously specified.

For instance, XYZ & Co. now wishes to submit GSTR-3B of January 2021, due on August 2, 2021, but hasn’t done so as of February 20 2021. For 163 days of lateness at a rate of Rs. 50 per day of delinquency for GSTR-3B with tax due, the late fee under the Act could have been Rs. 8,150. The highest late price allowed under the scheme, however, is only Rs. 1,000 for the GSTR-3B return due in January 2021. As a result, XYZ & Co. is required by the Act to pay a late filing fee of Rs. 1,000 as well as any taxes due and interest that may be due.

Issues and Problems with the GST Amnesty Programme

The programme, which intends to provide relief to non-filers who wish to keep running their businesses by correctly declaring GST data, is not without its challenges. The GST Amnesty Scheme 2023 had specific difficulties and problems.

No Exemption from Paying Interest

The interest rate is waived for those who owe taxes but failed to file GSTR-3B. However, only the maximum late fee is waived if it is filed before August 31, 2021.

Input Tax Credit Ineligibility

The Input Tax Credit’s (ITC) non-admissibility under the GST Amnesty Scheme is disputed by specific tax experts. Tax experts have legitimate concerns about the eligibility of ITC under this arrangement. Although the amnesty system permits tax payments that are past due for earlier periods, it remains quiet regarding ITC claims made in the same return from the year before.

Conclusion

The GST Amnesty Scheme 2023 is a potent instrument that can aid in navigating the complicated world of taxation for both enterprises and governments. It achieves a compromise between providing assistance to taxpayers who don’t comply and guaranteeing increased money for public works initiatives. Governments must carefully plan and implement such programmes, taking into account the long-term effects on economic activity and tax compliance.

The programme offers firms the chance to learn from their past mistakes, lighten their financial loads, and reclaim their place in the formal economy. The GST Amnesty Scheme 2023 helps a country’s economy overall by fostering transparency, lowering litigation, and enhancing conformity.

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