All about the new GST Amnesty Scheme

Introduction

The GST Council held its 49th GST Council Meeting on 18th Feb 2023, and it has issued notifications on 31-03-2023, introducing a new Amnesty Scheme for taxpayers. This scheme provides relief to taxpayers who have pending GST returns without hefty penalties. The GST Amnesty scheme has provisions for composition taxpayers, revocation of cancelled registrations, Aadhaar authentication, assessment orders, late fees for GSTR-9 and GSTR-10, and extended due dates.

Insights of the New GST Amnesty Scheme

• The GST Council has announced a new amnesty scheme for taxpayers who have failed to file their returns in a timely manner.

• Under the new scheme, composition taxpayers who have failed to file their GSTR-4 returns from July 2017 to March 2022 can file their returns between April 1 and June 30, 2023, with a late fee of Rs. 500 per year.

• Taxpayers whose registrations have been cancelled on or before December 31, 2022, and have failed to apply for revocation of cancellation can apply for revocation up to June 30, 2023, after filing their returns and paying their taxes.

• Applicants who opt for Aadhaar authentication must undergo the process, and if they do not, they must undergo biometric-based Aadhaar authentication and have their photograph taken.

• Registered people who failed to file a valid return within 30 days of receiving an assessment order issued on or before February 28, 2023, must file the return by June 30, 2023, with interest and late fees.

• Taxpayers who failed to file GSTR-9 for the financial years 2017-18 to 2021-22 can file their returns between April 1 and June 30, 2023, with waived late fees up to Rs. 20,000.

• The late fees for GSTR-9 for FY 2022-23 will be up to Rs. 50 per day for turnovers up to Rs. 5 crore, up to Rs. 100 per day for turnovers between Rs. 5 crore and Rs. 20 crore, and up to Rs. 200 per day for turnovers above Rs. 20 crore.

• The late fee for filing GSTR-10 (Final Return) will be restricted to Rs. 1000 if it is filed between April 1 and June 30, 2023.

• The government has also extended the time limit for the issuance of orders for the recovery of tax not paid or short paid or of ITC wrongly availed or utilized.

• The GST Amnesty scheme will provide relief to taxpayers who have pending GST returns, allowing them to clear their previous filings without hefty penalties. This scheme will help businesses clear their dues and file their pending returns on time, ultimately contributing to a more efficient GST system in India.

Composition Taxpayers

Under the new scheme, composition taxpayers who failed to furnish their returns in FORM GSTR-4 from July 2017 to March 2022 can file their returns between 1st April 2023 to 30th June 2023, and the late fee will be restricted to Rs. 500 per year. This provision gives relief to small taxpayers who have failed to file their returns for various reasons.

Revocation of Cancelled Registrations

The scheme also provides relief for registered people whose registration has been cancelled on or before 31-12-2022, and who have failed to apply for revocation of cancellation of such registration within the specified time-period. They can now apply for revocation registration up to the 30th June 2023. However, the application for revocation shall be filed only after submitting the returns along with payment of tax due up to the effective date of cancellation of registration, and no further extension of the time period for filing applications shall be available in such cases.

Aadhaar Authentication

Under the new scheme, individuals and entities that are not notified under sub-section (6D) of section 25, may choose to authenticate their Aadhaar number during the GST registration process. If the Aadhaar number is authenticated, the date of authentication or 15 days from the submission of Part B of FORM GST REG-01 (under sub-rule 4), whichever is earlier, will be considered as the date of application submission. If authentication is not successful, the applicant will be required to undergo biometric-based Aadhaar authentication and provide their photograph if they are an individual.

Assessment Order and Late Fees of GSTR-9

The scheme also provides relief for registered people who failed to submit a valid return within a period of thirty days from the service of the assessment order issued on or before the 28th day of February 2023. Such people can submit the return on or before 30.06.2023 with payment of interest and late fees. If a taxpayer has not filed GSTR-9 for the financial years 2017-18, 2018-19, 2019-20, 2020-21, or 2021-22, but submitted the said return during 1st April 2023 to 30th June 2023, the total amount of late fee under section 47 will be payable in respect of the said return. Late fees for FY 2022-23 are as follows:

1. For taxpayers with a turnover of up to Rs. 5 crore, late fees of Rs. 50 per day (Rs. 25 CGST and Rs. 25 SGST) will be charged, with a maximum of up to 0.04% of turnover.
2. For taxpayers with a turnover between Rs. 5 crore and Rs. 20 crore, late fees of Rs. 100 per day (Rs. 50 CGST and Rs. 50 SGST) will be charged, with a maximum of up to 0.04% of turnover.
3. For taxpayers with a turnover above Rs. 20 crore, late fees of Rs. 200 per day (Rs. 100 CGST and Rs. 100 SGST) will be charged, with a maximum of up to 0.50% of turnover.

Late Fees of GSTR-10 and Extended Due Dates

If GSTR-10, i.e., Final Return, is not filed within the due date, then the late fee will be restricted to Rs.1000 if it’s filed between 01-04-2023 to 30-06-2023. The government also extended the time limit for issuance of order u/s 73 of the Act for recovery of tax not paid or short paid or of ITC wrongly availed or utilized. The extended due dates are as follows: For F.Y. 2017-18, it’s up to 31-12-2023, For 2018-19 it’s 31-03-2024 & For F.Y.2019-20 and 2020-21, it’s up to 30-06-2024. However, it’s important to note that the extension of the time limit for filing GSTR-10 and issuance of order u/s 73 is only applicable for those taxpayers who have opted for the amnesty scheme.

Conclusion

In conclusion, the new GST Amnesty Scheme announced by the GST Council provides relief to taxpayers by reducing or waiving off hefty penalties on pending GST returns. The scheme offers advantages including the option to restore cancelled registrations, use Aadhaar for verification, and benefit from extended deadlines. The scheme also provides relief from assessment orders and late fees for GSTR-9 and GSTR-10. The scheme is expected to encourage more taxpayers to file their returns on time, thus contributing to the overall compliance of the GST system.