The Goods and Services Tax Council on 12 June 2020, decided to further ease compliance burden on businesses by providing relief on late fee and interest payable on late payments. It reduced late fee and interest for those with tax liabilities and waived off late fee completely for those with no tax liabilities.
The following steps have been proposed in favour of the taxpayers:
- For those taxpayers who have no tax liabilities but have not filed their returns between July 2017 and January 2020 there will be zero late fees. For people who have tax liability, maximum late fee for non-filing of GSTR-3B returns for period July 2017 – January 2020 has been capped to Rs 500.
- During COVID period of February, March and April 2020, interest rate on late return filings by small taxpayers with turnover up to Rs 5 crore, will be reduced to 9% from 18%, if returns of inward supplies are filed till September 30.
- The late fee and interest will be waived for the months of May, June and July, if returns are filed by September 30.
- Taxpayers can file for restoration of GST registrations that have been cancelled till June 12, 2020, through a one-time extension being offered till September 30.
The impact of coronavirus followed by the lockdown has hurt GST collections, with the April and May collections falling well short of targets of Rs 1 lakh crore per month
The Government is faced with a tough balancing act, as on one hand it needs robust GST collections to help meet its regular and extraordinary expenses during the pandemic, while on the other hand, businesses are looking for relief to help them tide the major disruptions, loss of revenue and uncertainties.
The Council however postponed rationalisation of GST rates for textiles, footwear and fertiliser, even though principally all members agreed that the duty rates need to be corrected as these products faced inverted duty structures.
The GST Specialists at DBC believe that the above-mentioned points will provide a huge relief to all the defaulting taxpayers, giving them a chance to bring their GST Filings back on track.
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