In a move that is likely to provide a huge relief to small taxpayers and micro and small enterprises in the country amid the pandemic, the Goods and Service Tax Council is likely to announce an amnesty scheme on late fee in GST return filing in the upcoming meeting on May 28.
The scheme will cover all the pending GSTR-3B returns since the launch of GST on July 1, 2017, till the month of April this year. All businesses registered under GST are required to file GSTR-3B, which is essentially a summary return containing the log of all monthly inward and outward supplies.
Confirming that a proposal on late fee amnesty will be taken up by the Council, a source close to the development told Business Today, “A compliance window will be provided to the taxpayers for availing the amnesty scheme. The compliance window could begin with effect from June 1 and may last till August 31. Final decision on the proposal and compliance dates rests with the Council.”
“Representations have been received from various quarters that taxpayers could not furnish the returns due to a number of factors. Now, we are faced with a situation where even in case of nil returns, the late fee and interest have zoomed,” the source added.
Going forward, as per the proposal, for all the taxpayers who did not have any tax liability and have to file zero return a flat late fee of Rs 500 will be imposed under the amnesty window.
Additionally, a late fee of Rs 1,000 will be charged from the taxpayers who were liable to pay tax during the period between July 2017 and April 2021. It may be noted that to get the benefits of the scheme, the taxpayers will have to file the return within the compliance date decided by the Council.
Interestingly an RTI application has revealed that almost Rs 100 crore has been collected by way of late fee on GSTR-3B and other returns by the government between April 1, 2019, and April 30, 2021. Data on late fee collection for the period between GST rollout and March 2019 is unavailable as per the RTI reply.
Under the GST regime, massive penalty is imposed for non-furnishing of returns. In case of zero tax, late fee of Rs 20 per day is charged, while others have to pay a late fee of Rs 50 per day per return. The late fee is capped at Rs 10,000 per return per month.
Late fee has been one of the predominant issues voiced by taxpayers on the social media for the last couple of months now. Ahead of this year’s Budget, the small businesses had even held a nationwide protest on the issue of high late fee.