GST News and Updates for May 2021

 

Decision made 43rd GST Council meeting

 

1.Due dates extended for filing GST Returns

The due dates for IFF and GSTR-1 filing for May 2021 are extended by 15 days. Companies may continue filing GST returns using EVC instead of digital signature till 31st August 2021.

The due date for GSTR-4 for FY 2020-21 and ITC-04 for Jan-Mar 2021 is extended up to 31st July 2021 and 30th June 2021, respectively.

2.Simplification of Annual Return for Financial Year 2020-21

Amendments in section 35 and 44 of CGST Act made through Finance Act, 2021 to be notified. This would ease the compliance requirement in furnishing reconciliation statement in FORM GSTR-9C, as taxpayers would be able to self-certify the reconciliation statement, instead of getting it certified by chartered accountants. This change will apply for Annual Return for FY 2020-21.

The filing of annual return in FORM GSTR-9 / 9A for FY 2020-21 to be optional for taxpayers having aggregate annual turnover upto Rs 2 Crore.

The reconciliation statement in FORM GSTR-9C for the FY 2020-21 will be required to be filed by taxpayers with annual aggregate turnover above Rs 5 Crore.

3.Extension of the due date of filing Application for Revocation of Cancellation of Registration

By Notification No. 14/2021 dated 01.05.2021, the timeline for filing the ‘Application for Revocation of Cancellation’ has been extended by the government to 180 days from 90 days which will be valid up to 15th June 2021.

4.Waiver on Import duty for medicine used for Black Fungus

The GST Council in its 43rd meeting left taxes on COVID-19 vaccines and medical supplies unchanged but exempted duty on import of a medicine used for treatment of black fungus. GST Council decided to continue a waiver of IGST on free COVID-19 related supplies imported from abroad.

5.Decision for compensation to states for shortfall of GST revenue

The GST Council in the 43rd meeting decided that the Centre will borrow Rs 1.58 lakh crore and pass it on to the states to make up for the shortfall in their revenues from the implementation of the GST. A special session of the Council will be held soon to consider extending the five-year GST shortfall compensation period to states beyond 2022.

6.GST Amnesty Scheme

GST Amnesty Scheme for GSTR 3B late fees in their press release to provide relief to small taxpayers. Amnesty scheme 2021 has been recommended for reducing late fee payable by small taxpayers & medium-sized taxpayers. Amnesty Scheme Recommended to Benefit around 89% GST Taxpayers at present.

Taxpayers can avail the benefits of this Amnesty Scheme on all GSTR 3B returns pending since July 2017 till April 2021. This was a much needed relief from the Department.

Late Fee has been reduced / waived as under: –

Sl.Type of Return (GSTR – 3B)Relaxation in Late Fee
1.Nil Return (No tax liability for the said tax periods)Maximum Late fee capped at Rs. 500/- (Rs. 250- each for CGST & SGST) per return
2.For Other Cases (Tax liability is there for the said tax periods)

 

Maximum Late fee capped at Rs.1,000/- (Rs. 500- each for CGST & SGST) per return

GSTR – 3B should be filed between 1.06.2021 to 31 August, 2021 to avail the benefit of the Amnesty Scheme. It means that the pending GSTR 3B returns for the period from July, 2017 to April, 2021 should be filed on or before 31st August, 2021.

7.Late fee reduction for Prospective tax period

a)Rationalization of Late fees for Return Filings of GSTR 3 B and GSTR 1

Rationalization of late fee leviable on account of delay in furnishing return in FORM GSTR-3B and FORM GSTR-1 for Prospective tax period (June, 2021 onwards).

To reduce burden of late fee on taxpayers, the late fee is being capped, as follows:

Taxpayer’s categoryRelaxations in Late Fees
1. Tax liability- NilRs. 500/- (Rs. 250/- each for CGST & SGST) per return
2. Aggregate Turnover ≤ 1.5 CrRs. 2000/- (Rs. 1000/- each for CGST & SGST) per return
3.  1.5 Cr < Aggregate Turnover ≤ 5 CrRs. 5000/- (Rs. 2500/- each for CGST & SGST) per return
c) Aggregate Turnover > 5 CrRs. 10000/- (Rs. 5000/- each for CGST & SGST) per return

b)Relaxation in Late fees for filing of GSTR 4

Rationalization of late fee leviable for delay in filing GSTR-4 by composition taxpayers for prospective tax periods (FY 21-22 onwards).

Taxpayer’s categoryRelaxations in Late Fees
1. Nil Return (No tax liability for the said tax periods)Rs. 500/- (Rs. 250/- each for CGST & SGST) per return
2. For Other Cases (Tax liability is there for the said tax periods)Rs. 2000/- (Rs. 1000/- each for CGST & SGST) per return

c)Relaxation in Late fees for filing of GSTR 7

Late fee payable for delayed furnishing of GSTR-7 (Filed by Tax Deductors at Source) 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. Rationalization of late fee leviable for delay in filing GSTR-7 is to be for prospective tax periods (June, 2021 onwards).

8.Relaxation in claiming of ITC under GST

Rule 36(4) of CGST Rules has been amended to provide relaxation in availment of Input Tax Credit (ITC). Availment of ITC has been capped at  105%, applicable on cumulative basis of tax periods April, May and June 2021. It is to be applied in the return GSTR – 3B for the Tax Period June, 2021.

9.Interest relief for late filing of PMT-06 by QRMP taxpayers for April 2021 and May 2021

For April 2021, No interest is charged for delayed submission up to 9th June, whereas 9% of reduced interest is charged between 10th June and 9th July, and 18% of interest is charged thereafter.

For May 2021, No interest is charged for delayed submission up to 10th July, whereas 9% of reduced interest is charged between 11th and 25th July, and 18% of interest is charged thereafter.

Generation of GSTR-2B for April 2021

Rule-60(7) of CGST Rules-2017 prescribes for generation GSTR-2B for input tax credit. As per Rule-60(8) of CGST Rules-2017, GSTR-2B shall be made available to the recipients after the Due date of filing GSTR-1/IFF by the suppliers. Notification No. 12/2021-CT and 13/2021-CT, both dated 1st May 2021 extend the Due date of GSTR-1 and IFF for April 2021, to 26th and 28th May 2021, respectively. Consequently, GSTR-2B for April 2021 will be generated after the Due dates, on 29th May 2021.

Taxpayers willing to file FORM GSTR-3B for April 2021 before GSTR-2B generation may do so on self-assessment basis. Notification No. 13/2021-CT dated 01.05.2021 prescribes a cumulative limit under Rule-36(4) for ITC claimed in periods April & May 2021.