Govt Announces GST Relaxation For Businesses Amid COVID-19 Second Wave
The Ministry of Finance (MoF) has recently announced GST relaxations for businesses in India due to the outbreak of the COVID-19 second wave. Many businesses were facing difficulties in complying with the GST rules and provisions. The relaxations include interest rate reduction, late fee waivers, due date extensions, and other amendments in the CGST rules.
Reduction in interest rate
The government has announced a concessional rate of interest, instead of 18% per annum, for delayed tax payments. Here are the reduced interest rates for different categories of taxpayers.
| For registered taxpayers having an aggregate turnover of more than Rs. 5 crore | Only 9% per annum for the first 15 days of delay for the tax payable for March 2021 and April 2021, which has to be paid in April 2021 and May 2021 |
| For registered taxpayers having an aggregate turnover of up to Rs. 5 crore | Nil interest for the first 15 days from the due date and 9% for the next 15 days for both normal taxpayers and those under QRMP scheme, for the tax payable for March 2021 and April 2021, payable in April 2021 and May 2021, respectively |
| For registered taxpayers under the composition scheme | Nil rate of interest for the first 15 days from the due date, 9% for the next 15 days for the quarter ended on 31st March 2021, to be paid in April 2021 |
Waiver of late fee
The Government has waived off the late fee for GSTR-3B for April and May 2021. The exemption is available for a delay of up to 15 days and 30 days from the original due date for a taxpayer with a turnover of more than Rs. 5 crore and up to 5 crores, respectively. Also, no late fees will be levied if the return is filed by 30 days from the original due date for the quarter ending 31st March 2021.
Extension of return filing due date
- The due date of furnishing Form GSTR-1 and IFF for April, which is due in May, has been extended by 15 days.
- The due date for filing Form GSTR-4 (Annual return for composition taxpayers) for FY 2020-21 is extended to 31st May 2021 from 30th April 2021.
- The due date for filing Form ITC-04 for the Jan-March quarter of FY 2020-21 has been extended to 31st May 2021 from 25th April 2021.
Amendments in CGST Rules
- Relaxation in availing ITC: Rule 36(4), i.e., a 105% cap on availment of ITC in Form GSTR-3B to be applicable on a cumulative basis for tax period April and May 2021, will be applied in return for tax period May 2021. Otherwise, rule 36(4) is applicable for each tax period.
The filing of GSTR-3B and GSTR-1/IFF by taxpayers using electronic verification code has already been enabled from 27th April to 31st May 2021.
- Extension of time limit: The deadline for completing any actions under the GST Act that falls within 15th April and 30th May 2021 has been extended to 31st May 2021.
Here’s the summary for better understanding:
Category 1 states – Chattisgarh, Madhya Pradesh, Gujarat, Dadra and Nagar Haveli and Daman and Diu, Karnataka, Maharashtra, Kerala, Goa, Tamil Nadu, Lakshadweep, Andaman and Nicobar Islands, Puducherry, Telangana, and Andhra Pradesh
Category 2 states – Punjab, Jammu and Kashmir, Chandigarh, Ladakh, Uttarakhand, Himachal Pradesh, Nagaland, Haryana, Uttar Pradesh, Delhi, Arunachal Pradesh, Bihar, Rajasthan, Sikkim, Manipur, Jharkhand, Meghalaya, Mizoram, Assam, Tripura, and Odisha