The word Amnesty is defined as “a pardon extended by the government to a group or class of people, usually for a political offense, the act of a sovereign power officially forgiving certain classes of people who are subject to trial but have not yet been convicted.”
In respect of GST, the Government has notified Amnesty scheme aims to provide relief to taxpayers regarding late fee for pending returns. This scheme will remain valid from June 1, 2021 to August 31, 2021.
The 43rd GST Council took several key decisions including exemption of duty on import of Covid-19 related items, and an amnesty scheme for small and medium taxpayers to reduce late fee burden on them.
“One of the biggest decisions today is the reduction of the compliance burden of small taxpayers and medium-sized taxpayers. Late fee amnesty related matters were decided upon,” Sitharaman said at a press briefing after the 43rd GST Council meeting.
Provisions under GST Law Highlighting Late Fees
Section 47(1) of the CGST Act, 2017 provides for the late fee for filing of returns , including GSTR-4 or GSTR-10, is Rs 100/- per day (each for CGST and SGST) subject to maximum of Rs 5000/-(each for CGST and SGST). Thus total late fee for delay was Rs 200 per day subject to maximum of Rs 10,000/- for each return.
Section 20 of the IGST Act,2017 provides application of certain provisions of the CGST Act, 2017 or rules made thereunder, shall mutatis mutandis apply, so far as may be, in relation to IGST as they apply in relation to central tax as if they are enacted under the IGST Act. However an exception to this is in regard to late fee as Sec 20(viii) of the IGST Act, 2017 clearly excludes late fee from its ambit. Accordingly, there is no separate late fee levied under IGST Act, 2017.
However late fee is applicable under UTGST Act, 2017 as per Section 21(ix), as application of late fee has not been excluded therein. Thus we can conclude that late fee shall be applicable under CGST Act and SGST (supply within State) or UTGST (supply within Union Territory).
43rd GST Council Meet and Amnesty Scheme
The Finance minister in order to provide relief to the taxpayers, a late fee for non-furnishing FORM GSTR-3B for the tax periods from July 2017 to April 2021 has been reduced/waived. The late fee capped to a maximum of Rs 500/- (Rs. 250/- each for CGST & SGST) per return for taxpayers, who did not have any tax liability for the said tax periods. The late fee capped to a maximum of Rs 1000/- (Rs. 500/- each for CGST & SGST) per return for other taxpayers. The reduced rate of the late fee would apply if GSTR-3B returns for these tax periods are furnished between June 1, 2021, to August 31, 2021.
The late fee for delay in furnishing of FORM GSTR-3B and FORM GSTR-1 to be capped, per return.
For taxpayers having nil tax liability in GSTR-3B or nil outward supplies in GSTR-1, the late fee to be capped at Rs 500 (Rs 250 CGST + Rs 250 SGST.
For other taxpayers having Annual Aggregate Turnover (AATO) in preceding year upto Rs 1.5 crore, late fee to be capped to a maximum of Rs 2000 (1000 CGST+1000 SGST);
For taxpayers having AATO in the preceding year between Rs 1.5 crore to Rs 5 crore, late fee to be capped to a maximum of Rs 5000 (2500 CGST+2500 SGST).
For taxpayers having AATO in preceding year above Rs 5 crores, late fee to be capped to a maximum of Rs 10000 (5000 CGST+5000 SGST).
The late fee for delay in furnishing of FORM GSTR-4 by composition taxpayers to be capped to Rs 500 (Rs 250 CGST + Rs 250 SGST) per return, if tax liability is nil in the return, and Rs 2000 (Rs 1000 CGST + Rs 1000 SGST) per return for others. Late fee payable for delayed furnishing of FORM GSTR-7 to be reduced to Rs.50/- per day (Rs. 25 CGST + Rs 25 SGST) and to be capped to a maximum of Rs 2000/- (Rs. 1,000 CGST + Rs 1,000 SGST) per return.
