Avalara > Blog > Goods and Services Tax > Centre announces GST relief measures amid second COVID-19 wave

Centre announces GST relief measures amid second COVID-19 wave

  • May 11, 2021 | Manjula Muthukrishnan

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.


Avalara helps businesses of all sizes get GST return filing, e-way bill generation and e-invoicing right with cloud-based GST compliance solutions in India. Goods and Services Tax (GST) rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Avalara Author
Manjula Muthukrishnan
Avalara Author Manjula Muthukrishnan
Manjula is the Managing Director of India operations at Avalara. Her role involves overseeing strategic operations in India with a special focus on strengthening the company's end to-end tax automation offerings in the market by enabling Indian customers navigate the complexities of the local indirect tax system - Goods and Services Tax. Prior to joining Avalara, she served leadership roles at renowned organizations like Infosys, HSBC and Socion Advisors. Manjula has been recognized by various internal and external forums for her contributions in the area of Corporate Social Responsibility.

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