Important GST Amendments and compliance relaxations - June 2021

KEY AMENDMENTS IMPLEMENTED BY WAY OF NOTIFICATIONS DATED 01.06.2021

5. Amnesty scheme towards late fee for pending returns: As a welcome relief for business an Amnesty scheme, towards late fee imposable under Section 47 of the Central Goods and Services Tax Act, 2017 (CGST Act), on delayed filing of pending GSTR-3B returns for the tax periods from July, 2017 to April, 2021 (subject period), proposed by GST Council has been made effective.
5. Under the aforesaid scheme the late fee for non-furnishing FORM GSTR-3B is reduced/waived, if GSTR-3B returns for subject period are furnished between 01.06.2021 to 31.08.2021, as hereunder:

5. Rationalisation of late fee under Section 47 of the CGST Act, leviable on account of delay in furnishing return in FORM GSTR-3B and FORM GSTR-1: In order to reduce the burden of late fee on taxpayers for prospective tax periods (June 2021 onwards or quarter ending June 2021), the late fee is being capped as summarized in the table below:

Comments:

5. It is interesting to note that with effect from 18.05.2021, liability to pay interest, is linked to unpaid tax liability and, now stands delinked from the non-filing/late filing of GSTR-3B. It may also mean that prior to the aforesaid period i.e., upto 17.05.2021, the interest liability arises in cases only where neither the GSTR-3B return is filed/or is filed late, nor the tax liability is paid by the tax payer and in case any of the above condition is met, interest liability may not be strictly imposable from a reading of the unamended provision.
5. It is also noteworthy that although late fee for delayed filing of return in FORM GSTR-3B for the period July 2017 to April 2021 has been capped to a maximum of ₹ 500/- per GST return for CGST, however, interest liability will be attracted for late payment of tax liability to the Government exchequer. Secondly, there is seemingly an overlap between capping of late fee on delayed filing of return in GSTR-3B under proviso to Notification No. 19/2021 - Central Tax dated 01.06.2021, and the late fee relaxation granted specifically for the months of March, April, May 2021, under the said notification.

5. Clarificatory amendment regarding applicability of interest:A much-awaited clarity is provided by way of retrospective amendment^[5] in Section 50 of the CGST Act with effect from 01.07.2017, providing for payment of interest on net cash basis. The aforesaid amendment provides that the interest on tax payable in respect of supplies made during a tax period and declared in the return for the said period furnished after the due date in accordance with the provisions of section 39, shall be payable on the tax which is paid by debiting the electronic cash ledger.

5. Reliefs in compliance under Central Goods and Services Tax Act, 2017.

5. Exclusion of ‘government department’ and ‘a local authority: ’a ‘government department, a local authority’ are now excluded from e-invoice mandate of obtaining Invoice Reference Number (IRN) and such entities may issue invoices without following the aforesaid stipulation.
5. The Companies^[15] are enabled to file returns in FORM GSTR-3B and FORM GSTR-1 or using invoice furnishing facility, verified through electronic verification code (EVC) during the period from the 27.04.2021 to 31.08.2021.
5. The condition stipulated in Rule 36(4)^[16] for availment of ITC, to apply cumulatively for the period April, May and June 2021 and the return in FORM GSTR-3B for the tax period ending June, 2021 or quarter ending June 2021, needs to be furnished with the cumulative adjustment of input tax credit for the said months in accordance with the condition under Rule 36(4).
5. A registered person may furnish the details[17], for the month of May, 2021, using IFF from the 01.06.2021 till 28.06.2021.
5. The time limit for completion or compliance of any action, by any authority or by any person, specified in, or prescribed or notified under the CGST Act, IGST Act or UTGST Act, falling for completion during 15.04.2021 to 29.06.2021, is extended upto the 30.06.2021, including for the purposes of:

1. Completion of any proceeding or passing of any order or issuance of any notice, intimation, notification, sanction or approval or such other action, by any authority, commission or tribunal under the provisions of the Act; or
2. Filing of any appeal, reply or application or furnishing of any report, document, return, statement or such other record under the provisions of the Act;

however, such extension of time-limit is not applicable for the compliance of the following provisions of the said Act, namely:

5. The time limit for completion of action in respect of verification of the application of registration or approval falling in the period during 01.05.2021 to 30.06.2021 is extended upto 15.07.2021.
5. The time-limit stipulated for passing of refund order falling during 01.04.2021 to 29.06.2021 is extended to fifteen days after the receipt of reply to the notice from the registered person or 30.06.2021, whichever is later.
5. It is noteworthy that GST Council in its 43rd Meeting has clarified that wherever the limitation period has been extended by Hon’ble Supreme Court, the said extension will prevail. As per the above order of the Hon’ble Supreme Court, the period from 14.03.2021 stands excluded from computing the limitation period under all special and general laws.

For detailed discussion is visit GST Amendments and relaxations-June 2021

Disclaimer: The update is strictly meant for information purpose only. Professional advice needs to be sought for any specific query/ clarification and to understand the applicability to your specific circumstances before acting on the basis of the above information.

Shaubhik Gupta

Shaubhik is a seasoned lawyer with more than seven years of diverse experience in a leading law firm handling complex transaction advisory, due diligence and litigation for Fortune 500 Companies and big Indian Conglomerates from plethora of sectors.

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