Due to the ongoing pandemic considering the difficulties of the taxpayers, various relaxations were provided by the GST council. This was in order to reduce the burden & to ease the return filing process which was hindered due to the lockdown across the county. Relaxations were given in the form of waiver off late fee for filing GSTR- 1 and GSTR- 3B with extended dates, relaxation from various compliances such as filing of ITC- 04 forms etc. The major relaxation was a reduction in the interest rate & benefit of paying tax without interest if GST returns were filed on or before 15 days from the actual due date. The late fee for delayed returns also been capped to a maximum of Rs.500 (CGST+SGST).
However, the relaxation has led to many confusions in the taxpayer's mind relating the applicability of the relaxation for various practical scenarios. This article is intended to give insight on the frequently asked questions with regard to such relaxations which are discussed in subsequent paragraphs.
1. Whether the due date for the GST returns of February to July 2020 extended?
Ans: No, the due date for the GST returns (GSTR- 1 & GSTR- 3B) for February 2020 to July 2020 has not been extended. The due dates remain the same as earlier. However, the relaxation has been provided by not charging interest for the first 15 days from the original due date.
2. Liability of FY 18- 19 (Ex: March 2019) has been missed out & not paid till September 2019 return. However, the taxpayer decided to discharge it while filing the annual return of FY 18- 19 though DRC- 03. How is the interest to be computed for such cases? Whether the concessional rate of 9% would be applicable from March 2020 to date of filing an annual return, if it is filed before 30th September 2020 (or) interest @ 18% would be applicable from March 2019 to date of filing annual return?
Ans: Notification No. 51/2020 dated 24th June 2020 provides relief by lowering interest rates for prescribed time for tax periods from February 2020 to July 2020 for those who are required to furnish GSTR- 3B but fail to furnish the said return within prescribed due date.
However, such relaxation cannot be applied for missed out liability of previous tax periods or annual return filing. Thus, interest @18% would be applicable.
3. A taxpayer has supplied goods on credit to a customer but not raised an invoice & did not pay any tax on the same assuming all the compliances under GST are extended. Whether all the compliances are extended?
Ans: As per notification No. 35/2020 r/w notification no.55/2020, it is notified that time limit for completion or compliances during the period 20th March 2020 to 29th August 2020 shall be extended to 31st August 2020 except provisions related to Chapter IV & few other sections (which include section 31). Chapter IV covers Time & Value of supply. Section 31 is related to tax invoice, credit notes & debit notes.
Therefore, the taxpayer has to comply with the time of supply provisions & raise invoices accordingly. Further, the tax has to be discharged through returns. For delay in payment of tax, interest & late fee would be applicable.
4. Is concessional interest rate applicable to composition taxpayers, TDS return & TCS returns?
Ans: No, it is only applicable to those registered persons who are required to furnish GSTR- 3B.
5. Waiver of late fees for delayed filing of GSTR- 3B in excess of Rs. 500 was made vide notification 57/2020. What if the late fees say Rs. 4250 was paid on 25/06/2020 i.e. before the notification was released? Can it be claimed as a refund?
Ans: The late fees paid in excess of Rs. 500 would be recredited to the cash ledger of the taxpayer. Kindly note the same has not been provided specifically in the notification. However, a message on recrediting is being displayed on the GST official website gst.gov.in.
6. When the GST return to be filed in order to avail of the benefit of late fees reduction?
Ans: The GST returns for the period February 2020 to July 2020 to be filed on or before the 30/09/2020 in order to avail the benefit of late fees reduction up to maximums of RS. 500. If the returns filed beyond 30/09/2020, the full late fees would be liable. Further, the notification no.52/2020 provides relaxation in late fee for the July 2017- January 2020 GSTR- 3B, if the said returns are filed between 01/07/2020 to 30/09/2020.
7. Whether the waiver of the late fee is applicable for delayed filing annual returns also if filed before 30/09/2020?
Ans: No, the late fees waiver beyond Rs. 500 is not applicable for the delayed filing of annual returns. If the annual returns for the FY 2017- 18 is being filed after the specified due date the late fees of Rs. 200 per day would be applicable till the date of filing of annual returns.
8. Whether late fees of Rs. 500 to be paid for fling NIL return/ Nil liability?
Ans: No, the late fees would be fully waived off for those tax taxpayers whose total amount of tax is NIL.
9. Whether the late fees for the delayed filing of GSTR- 1 has been capped up to Rs. 500?
Ans: No, if the GSTR- 1 is not filed within the due dates mentioned in notification no.53/2020, the full late fees would be payable from the original due date. No change/ waiver provided for GSTR- 1.
10. Whether the waiver of the late fee in excess of Rs.500 would be applicable for August 2020 return also if filed before 30/09/2020?
Ans: No, the late fees waiver if not applicable for the August GSTR- 3B. As per notification no. 57/2020 r.w notification no.52/2020, the period covered is February 2020 to July 2020.
11. If a taxpayer having turnover above 5 crores filed March GSTR- 3B (original due date 20/04/2020) on 25/06/2020, whether late fees liable from original due date as per notification no.52/2020?
Ans: No, the notification 52/2020 r.w notification 57/2020 provides the relaxation stating that the late fees would be maximum of Rs. 500 in relation to the GSTR- 3B pertaining to February 2020 to July 2020 if filed on or before 30/09/2020 & notification 52/2020 provides for the July 2017- January 2020 if the said returns is filed between 01/07/2020 to 30/09/2020.
Therefore, the late fees would be restricted for Rs. 500 and not applicable from original due date.
12. ITC utilisation rules have been recently amended. IGST ITC has to be completely utilised first before utilising CGST & SGST ITC. Where a tax payer has duly utilised IGST ITC completely and still there is liability, same should be paid in cash. For example - CGST Rs. 50,000 & SGST Rs. 1,50,000. In 39th GST council meeting it was recommended to amend law retrospectively that interest for delay in payment of GST to be charged on net cash tax liability. Now, if the said return is related to April 2020 & filed on 10th October 2020, how much interest to be paid (considering recommendations)?
Ans: Interest would be paid on net cash liability i.e. on CGST Rs. 50,000 & SGST Rs. 1,50,000 at the rates provided below.
If turnover more than 5 crores - (April month original due date was 20th May 2020)
21st May 2020 to 4th June 2020 - 15 days - no interest.
5th June 2020 to 24th June 2020 - 20 days - Interest @9%
25th June 2020 to 10th October 2020 - 108 days - Interest @18%
If the turnover up to 5 crores - (Southern States)
21st May 2020 to 6th July 2020 - 47 days - no interest.
7th July 2020 to 30th September 2020 - 86 days - Interest @9%
1st October 2020 to 10th October 2020 - 10 days - Interest @ 18%
If the turnover up to 5 crores - (Northern States)
21st May 2020 to 9th July 2020 - 50 days - no interest.
10th July 2020 to 30th September 2020 - 83 days - Interest @9%
1st October 2020 to 10th October 2020 - 10 days - Interest @18%
13. In the above example, what if the said return is related to January 2020?
Ans: Notification clearly specifies that the concessional rate of interest for the period mentioned therein would be applicable to the tax periods February 2020 to July 2020. Therefore, concessional interest rate cannot be applied for January 2020 returns.
14. In the example mentioned in question 12, how to disclose the same in GSTR- 3B as GSTN portal would take CGST/SGST automatically when one of those amounts are feed in?
Ans: It would not be possible to pay different CGST & SGST interest through GSTR- 3B. Suggested to discharge interest through DRC- 03 or discharge at the time of filing annual return as interest amount would be computed till the date of payment of liability.
15. A tax payer has availed ineligible ITC during tax period March 2020 and wishes to reverse such ineligible ITC in the tax period May 2020. Would there be any relaxation of interest on reversal of ITC?
Ans: In general, ineligible ITC reversal would attract interest at 18 % / 24% per annum (subject to interpretation in Section 50). Notification provides a concessional rate of tax for those who are required to file GSTR- 3B but failed to furnish the same along with payment of taxes. However, it is not clear if the concessional rate can be opted for ITC reversal aspect. Suggested to discharge interest at concessional rate and wait for clarification. It may be noted that there is no interest on interest.
16. In the above example, what if ineligible ITC claimed in the tax period January 2020?
Ans: Notification applicable to specific tax period returns from February 2020. Therefore, such notification will not applicable to January 2020 return.
17. GST liability of March 2020 has been missed out while filing March 2020 return. However, the same has been paid in April 2020. April & May GST returns were filed on 5th May 2020 & 4th June respectively. Whether interest applicable in such case? If yes, at what rate?
Ans: Interest would be attracted for delay in payment of tax. In the given example, assuming tax payer has turnover more than 5 crores, March month liability was supposed to be paid without any interest on 5th May 2020. However, it has been discharged on 4th June 2020. Therefore, there is a delay of 31 days for which interest to be discharged.
Rate at which interest would be discharged will be staggered manner. For first 15 days it will nil interest & then 9% p.a. (16 days) would be applicable.
18. GSTR- 3B due dates would be based on the previous FY turnover. How to determine in the following cases:
- Where a registered person has started business in the FY 2020- 21 & registered in April 2020?
- Where a registered person has started business in the FY 2019- 20 & registered in April 2020?
- Where a registered person has registered in January 2020 with turnover of Rs. 1.25 crore?
Ans: Possible suggestions are as follows in each case:
- Can consider current FY turnover or can consider 'zero' turnover as business started in FY 20- 21.
- Turnover of FY 2019- 20 would be considered as aggregate turnover definition include aggregate of all supplies whether he is registered or unregistered or a taxable person.
- The turnover of FY 2019- 20 is to be considered, when the registration is obtained in January 2020, the turnover from January to March 2020 to be considered i.e the turnover of Rs. 1.25 crore.
Considering the clarity provided above, it would be beneficial to the taxpayers to avail of the relaxations effectively in order to take maximum benefit in the form of reduced interest or late fees cost in this economic condition.
I would like to thank CA Mahadev R for vetting the article.
The author can also be reached at firstname.lastname@example.org
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