The Goods and Services Tax Council has decided to further bring down the burden of compliance by offering relief on late fee and interest payable on late payments.
It brought down late fee and interest for those with tax liabilities and waived off late fee completely for those with no tax liabilities.
Finance minister Nirmala Sitharaman stated that the GST collections went down to about 45%, increasing the problem of compensation to states, even as states asked they be funded through market borrowing. The Council will be meeting again in July to specifically discuss this issue.
“For all those who have no tax liabilities but have not filed their returns between July 2017 and January 2020 there will be zero late fees,” finance minister Nirmala Sitharaman said.
“For people who have tax liability, maximum late fee for non-filing of GSTR-3B returns for period July 2017 – January 2020 has been capped to Rs 500,” she added.
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Companies with no tax liabilities will not have to pay any late fee if they have not filed returns, since July 1, 2017. Those with tax liabilities will now be asked to pay a late fee of Rs 500 per month, per return, far lower than Rs 10,000 per month.
During Covid period of February, March and April 2020, interest rates charged on late return filings by small taxpayers with turnover up to Rs 5 crore, will be brough down to 9% from 18%, if returns of inward supplies are filed till September 30.
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The late fee and interest will be now be waived for the months of May, June and July, if returns are filed by September 30.
Taxpayers can now file for restoration of GST registrations that were cancelled till June 12, 2020, through a one-time extension being offered till September 30.
