GST Amnesty Scheme for Small and Medium Taxpayers

One of the most significant decisions of the 43rd GST Council Meeting is the introduction of a GST amnesty scheme for small and medium taxpayers. GST Amnesty scheme aims to provide relief to small and medium taxpayers regarding the late fees for pending GST returns. 

What is GST Amnesty Scheme for Taxpayers? 

GST Amnesty is a limited-time opportunity for a class of taxpayers to pay a defined amount in place for waiving tax liability (including interest and penalties) payable in the previous taxable period. However, the GST amnesty scheme will halt when the GST authorities start investigating the past due to tax. 

GST Amnesty Scheme and 43rd GST Council Meeting 

In the 43rd GST Council Meeting, our Union Finance Minister, Mrs. Nirmala Sitharaman along with other council members, decided to provide relief for a certain class of taxpayers. These taxpayers include small and medium taxpayer who has not furnished Form GSTR-3B from July 2017 to April 2021. As per this scheme, the notified taxpayers’ late fees have been reduced or capped. It shall be noted that the GST amnesty scheme window for the notified taxpayers will stay open from 1st June 2021 to 31st August 2021. 

How will GST Amnesty Scheme Work for Taxpayers? 

Here is how the GST Amnesty scheme will work for taxpayers: 

1. For taxpayers who do not have any tax liability in GSTR-3B or nil outward supplier in GSTR-1 for the above-mentioned tax period, the late fee is capped to a maximum of INR 500 (Including INR 250 CGST and INR 250 SGST/UTGST) per return. If there is a tax liability, the late fee will be capped to a maximum of INR 1,000 (including INR 500 for CGST and INR 500 for SGST/UTGST) per return. 
2. For taxpayers having Annual Aggregate Turnover in the preceding financial year does not exceed INR 1.5 crores, the late fee will be capped to a maximum of INR 2,000 (including INR 1,000 CGST and INR 1,000 SGST/CGST). 
3. For taxpayers having Annual Aggregate Turnover in the preceding financial year between INR 1.5 crore to INR 5 crores, the late fee will be capped to a maximum of INR 5,000 (including INR 2,500 CGST and INR 2,500 SGST/CGST). 
4. For taxpayers having Annual Aggregate Turnover in preceding financial year exceeds INR 5 crores mark, the late fee will be capped to a maximum of INR 10,000 (including INR 5,000 CGST and INR 5,000 SGST/CGST). 
5. If a composition taxpayers delays filing of GSTR-4 form having nil tax liability, the late fee is capped to INR 500 (Including INR 250 CGST and INR 250 SGST/UTGST) per return. In case if there is tax liability in GSTR-4, the late fee will be capped to a maximum of INR 2,000 (including INR 1,000 for CGST and INR 1,000 for SGST/UTGST) per GST return. 
6. Taxpayer filing GSTR-7, the late fee will be reduced to INR 50 (Including INR 25 CGST and INR 25 SGST/UTGST) per day. Moreover, it is capped to a maximum of INR 2000/- (Including INR 1,000 CGST and INR 1,000 SGST/UTGST) per GST return.