Centre announces GST relief measures amid second COVID-19 wave

Summary
  • As taxpayers struggle with running their businesses, the Centre has announced several relief measures 
  • Interest rates have been reduced from 18% to 9% for enterprises falling under a specific threshold and for taxpayers who have opted for the Composition Scheme under GST
  • The late fee has been waived off for a period of 15 days for filing of GSTR3B
  • CGST rules have been amended to relax the claiming of input credit tax

Article

India is struggling with the second wave of the Coronavirus pandemic. This means businesses that haven’t quite recovered from the first wave will be facing even more financial concerns this year. To offer some financial relief to taxpayers, the Centre announced some relief measures earlier this month. This article highlights all the measures announced by the Centre. 

The interest rate on late payment of taxes reduced for specific categories of taxpayers

The rate of interest applicable on late payment has been reduced for specific categories of taxpayers. These taxpayers are - 

  • Taxpayers with an annual turnover exceeding ₹50 million   

    • The rate of interest applicable on late payment of the Goods and Services Tax has been reduced from 18% to 9% for the first fifteen days of the tax periods of March 2021 and April 2021. However, this relief measure applies to registered taxpayers having an annual turnover exceeding ₹50 million. 

  • Taxpayers who have opted for the Quarterly Return Filing and Monthly Payment of Taxes Scheme
      
    • The rate of interest applicable on late payment of the Goods and Services Tax has been reduced from 18% to 9% for the first fifteen days for the tax periods of March 2021 and April 2021 for registered taxpayers who have opted for the QRMP Scheme. 
    • This relief measure is also applicable to taxpayers who have an annual turnover of up to ₹50 million. 

  • Taxpayers who have opted for the Composition Scheme under the Goods and Services Tax  

    • The rate of interest applicable on late payment of the Goods and Services Tax has been reduced to NIL interest for the first fifteen days and from 18% to 9% for the next fifteen days for the quarter ending March 31st, 2021. 
 

Late fee waived for specific categories of taxpayers 

The fee for late filing of GSTR3B has been waived off for particular categories of taxpayers. These taxpayers are - 

  • Taxpayers with an annual turnover exceeding ₹50 million  

    • Penalty for late filing of GSTR3B for the first fifteen days has been waived off if the taxpayer files GSTR3B past the due date for March and April 2021. 

  • Taxpayers with an annual turnover of up to ₹50 million
      
    • Penalty for late filing of GSTR3B for the first thirty days has been waived off if the taxpayer files GSTR3B past the due date for March and April 2021.  
    •  This is also applicable for taxpayers who have opted for the Quarterly Return and Monthly Tax Payment Scheme. 

  • Deadlines extended for specific form filing

The deadlines for filing specific tax forms have been extended to offer relief to taxpayers. These forms are - 

  • Invoice Furnishing Form
     
    • The deadline for April has been extended by a period of fifteen days. 

  • Form GSTR1
     
    • The deadline for April has been extended by a period of fifteen days. 

  • Form GSTR4
      
    • The deadline for furnishing form GSTR4 for FY2020-21 has been extended from April 30th, 2021, to May 31st, 2021

  • Form ITC 04
      
    • The due date for furnishing form ITC 04 for the quarter ending March 2021 has been extended from April 25th, 2021, to May 31st, 2021. 

CGST Rules relaxed for claiming an input tax credit 
 
  • Rule 36(4) of the CGST rules has been amended to help easier claiming of ITC. This means the existing 105% cap on availment of ITC while furnishing GSTR-3B will be applicable on a cumulative basis for April and May 2021. 
  • This must be applied while filing tax returns for May 2021. If not, Rule 36(4) is usually applicable for each tax period.
  • Additionally, return filing of GSTR-3B and GSTR-1/ IFF by registered taxpayers using electronic verification codes has been enabled for the period from April 27th, 2021, to May 31st, 2021.

Statutory time limits under Section 168A of CGST Act extended 

The time limit for completing various tax functions by taxpayers or by tax authorities, including the issuance of any notice or intimation, filing of any appeal, reply or application or furnishing of any report, document, return, statement, or such other record between the period of April 15th, 2021 and May 30th, 2021 has been extended to May 31st, 2021.

These GST relief measures are likely to help struggling taxpayers, especially when the country is facing a disastrous second wave of the Coronavirus pandemic.

Related posts

Prepare your business for e-invoicing under GST

Discover how to meet all compliance requirements while integrating e-invoicing into your tax function.

Prepare your business for e-invoicing under GST

Stay up to date

Sign up for our free newsletter and stay up to date with the latest tax news.