In view of the difficulties faced by the many taxpayers during filing their GST returns during his period of COVID-19, the Central Board of Indirect Taxes and Customs (CBIC) decided to provide certain reliefs to the taxpayers in the form of reduced interest rates and waiver of late fee. Interests are payable whenever a tax payer delays in depositing the tax liability with Government and a late fee is payable if the returns are not filed on time.

The reliefs are subject to certain conditions.

CBIC waives off late fee on late GST return filing

The Central Board of Indirect Taxes and Customs (CBIC) has notified waiver of late free, capping of late fee at Rs 500 in some cases, interest payable on late payments and extension of due dates for businesses to file goods and service tax (GST) returns for the Covid-19 impacted period, till October.

Taxpayers who do not have any tax liability but were yet to file returns for the period from July 2017 to January 2020 – prior to the Covid period – no late fee will be charged
Small taxpayers whose aggregate turnover is up to Rs 5 crore will be provided a waiver of late fees and interest if they file the form GSTR-3B for the supplies affected in months of May, June, and July 2020, by September 30, 2020

For this CBIC issued notifications on 03.04.2020 under Central Tax no. 31/2020 and 32/2020, on 24.06.2020 no. 51/2020 and 52/2020, and on 30.06.2020 no. 57/2020 and circular also issued on 03.04.2020 no. 136/06/2020.

Also Read: Alcohol-based hand sanitizers as ‘Disinfectants’ to extract 18 % GST from the present 12 %.

In this Article relief given by the Government to tax payers in the context of GST return under Form GSTR-3B, provided in three phases have been explained below:

Notifications were issued separately for Big tax payers having an aggregate turnover in preceding financial year more than Rs. 5 crores and small tax payers having aggregate turnover up-to Rs. 5 Crores have been explained below:

Big Tax Payers (having an aggregate turnover of more than Rs 5 crores)

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In case of Big tax payers, Government provided relief to those who have filed their GST returns after the due dates and thus liable for interest payment and late fee, by offering them interest free period for first 15 days from the original due date of filing of Form GSTR-3B and reduced interest rate of 9% per annum, instead of 18%, after the 15^th day till the actual date of filing of said return.

The government offered a waiver of the entire late fee. However, these reliefs were subjected to the condition and admissibility only if the taxpayers have furnished their return on or before 24.06.2020, and for those returns which are submitted after 24.06.2020, were not eligible for this exemption and taxpayers were required to pay interest at the full rate of 18% per annum from the original due date of payment of tax till the actual date of filing of GST returns along with entire late fee.

Example– Original due date to furnish Form GSTR-3B for the month of March2020 was 20.04.2020 and let’s consider a situation of two tax payers ”RAM” and ”SHAM”, where ”RAM” furnished his returnon23.06.2020 and ”SHAM” on 25.06.2020. Assuming tax liability of Rs 100,000 for both “RAM” and “SHAM”, interest liability and late fee will be as under:

Also Read: Input tax credit cannot be availed on GST paid for employees cabs

♦ For “RAM”

♦ For “SHAM”

Small Tax Payers (having an aggregate turnover of up-to Rs 5 crores)

In the case of small tax payers, Government divided tax payers into two categories, (i) having a turnover of more than Rs. 1.5 crore but up to Rs. 5 crores (ii) other tax payers having turnover up-to Rs. 1.5 Crores. Relief was provided to taxpayers if they had furnished their return on or before the relevant conditional dates (the last date amongst them was 06.07.2020) for the period February 2020 to April 2020. The government offered taxpayers that, if they have furnished their Form GSTR-3B by relevant conditional dates, they shall be fully waived from interest and late fee liabilities. Otherwise, no waiver of interest and late fee shall be given for the returns filed after the relevant conditional due dates. In such cases, interest and late fee both shall be payable from the original due date of filing the returns till the actual date of filing.

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♦ Phase 2: Revised Notifications issued for the period February 2020 to April 2020, along with extended relief for the period May 2020 to July 2020.

Big Tax Payers (having an aggregate turnover of more than Rs 5 crores)

In the case of Big tax payers, new notifications were issued for the period Feb 2020 to April 2020 in order to further relax the interest by allowing taxpayers to be still eligible for interest exemption even if they furnish their return after the relevant conditional due date as mentioned supra. However, no further relief is provided for a late fees during this period. Considering the same example of “SHAM” as above, the following shall be the revised calculation of interest and late fee:

♦ For ” SHAM”

-For tax periods from May 2020 to July 2020, relief in respect of a tax period is available if return for such tax period is furnished on or before 30.09.2020 and entire late fee shall be waived in case of tax payers whose central tax liability for that tax period is “Nil” and late fee of Rs. 25/day subject to maximum of Rs. 250, in case of other tax payers.

-If return under Form GSTR-3B is not filed by 30.09.2020, no waiver shall be available. Similar notifications are issued by respective State Government’s. Late fee shall still get entirely waived if a taxpayer does not have any central tax liability but have integrated tax liability.

• Example: A tax payer furnishes his Form GSTR-3B with “Rs. 100,000” Central Tax liability for the month of May 2020 on 30.06.2020 whose original due date is 27.06.2020, the late fee payable by him would be least of Rs. 75 (25/day * 3 days) or Rs. 250, i.e. Rs. 75.
• In same example if he filed his return on 15.09.2020, the late fee payable by him would be least of Rs. 2,000 (25/day * 80 days) or Rs. 250, i.e. Rs. 250.
• In same example if he filed his return on 01.10.2020, the late fee payable by him would be Rs. 2,400 (25/day * 96 days, calculated from 28.06.2020).

– No relief of interest has been provided for this period.

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Small Tax Payers (having an aggregate turnover of up-to Rs 5 crores)

In case of small tax payers, new notifications were issued by Government and taxpayers were categorized according to their States in which they are registered under GST.

Government further relaxed relief given in phase 1 by allowing small tax payers more time to file their GST returns. The relief given in phase 1 has been superseded with fresh notifications in phase 2.

According to which interest shall be payable as per slabs. If small tax payers furnish their GST return for a tax period from February 2020 to July 2020, on or before the new conditional dates, no interest shall be payable. If filed after conditional dates, reduced interest rate @ 9% per annum shall be payable from the date immediately next to conditional due date and up-to the date of filing of Form GSTR-3B or 30.09.2020, whichever is earlier. If returns are furnished after 30.09.2020, interest at the rate of 18% per annum shall be payable from 01.10.2020 till actual date of filing of GST return.

Relief from late fee is provided by completely waiving the same if tax payers furnish their return on or before the conditional dates. However, if some tax payers who cannot file the returns on or before the conditional dates, relief in respect of a tax period is available if return for such tax period is furnished on or before 30.09.2020 and entire late fee shall be waived in case of tax payers whose central tax liability for that tax period is “Nil” and late fee of Rs. 25/day subject to maximum of Rs. 250, in case of other tax payers. If the returns are not filed by 30.09.2020, no waiver shall be available and late fee shall be payable from the original due dates.

Example: Following information is available related to a tax payer:

• State of registration: Haryana
• Return filing period: June 2020
• Normal due date: 22.07.2020
• Conditional date of filing of return: 23.09.2020
• Date of filing of return: 22.09.2020
• Tax liability: Rs. 100,000

In above example, if return is filed on 25.09.2020 but before 30.09.2020

In above example, if return is filed on 01.10.2020

♦ Phase 3: Onetime amnesty scheme for period July 2017 to January 2020

For all type of taxpayers, Big or small, CBIC has given them last opportunity to file their pending returns. If they furnish their pending returns during01.07.2020 to 30.09.2020, entire late fee shall be waived in case of tax payers whose central tax liability for that tax period is “Nil” and late fee of Rs. 25/day subject to maximum of Rs. 250, in other cases. No waiver of Interest is provided under this scheme.

Conclusion

In accordance with notification no. 52/2020 and 57/2020 – Central Tax, following are the relevant dates to file Form GSTR-3B along with extent of waiver of late fee and interest:

#1If Form GSTR3B is filed after the conditional due date, exemption of late fee shall be as per column “E.1” of the table. Further, if no relief is mentioned under column E.1, in that case column D shall only apply, and for returns filed after conditional due dates, late fee exemption shall not be available.

#2 Partial waiver till the conditional due date of filing Form GSTR-3B as mentioned in column “D”. After conditional due date normal interest rate @ 18% shall be levied. Unlike, late fee waiver on Form GSTR-3B, this waiver won’t be withdrawn if the Form GSTR-3B is not filed within conditional date prescribed under column “D”.

#3 If GSTR-3B is not filed within conditional due date, no waiver of interest.