GST Concessions Granted Consequent to COVID-19 Outbreak

The worldwide outbreak of the Corona Virus pandemic has forced the Government to announce unprecedented measures to contain the spread of the dreaded disease. Countrywide lockdown had to be imposed. The lockdown has chain reaction of slowdowns all round. The GST Council, which steers the implementation of this major reform in Indian indirect taxation, has from time to time shown sensitivity to the problems and difficulties faced by the taxpayer. The slowdown resulting from the sudden imposition of the lockdown has, as expected, led to financial crunch and administrative difficulties for taxpayers.

There was urgent need to provide relief measures to the stressed out taxpayer community. The Government has on 3rd of April 2024 issued 7 Notifications announcing a series of concessions in the matter of compliances and tax payments by the taxpayers. All these 7 Notifications (Nos. 30/2024 to 36/2024-Central Tax) have come in a cluster. Here is an attempt to explain the implications of these Notifications to the taxpayers.

1.Notification No. 30/2024-Central Tax, dt. 3-4-2024

This Notification announces certain concessions to the taxpayers, as under :

i. Taxpayers, who avail of the option of payment of nominal tax (Composition Levy) under S. 10 of the Central Goods and Services Tax Act, 2017 (CGST Act) from the financial year 2024-21, are required file an intimation in Form GST CMP-02 prior to the commencement of the financial year. Thus, where a registered person has opted to pay Composition Levy from the financial year 2024-21, intimation in Form CMP-02 was due to be filed before April 1, 2024. Notification No. 30 has extended the due date for filing Form CMP-02 to 30th June 2024.

ii. A registered person, who has opted to pay Composition Levy is required to reverse ITC availed on stocks of inputs, work-in-process and finished goods held as at the end of the prior year. Such registered person is required to file a statement in respect of such reversal of ITC in Form ITC-03 within a period of 60 days from the commencement of the financial year from which Composition Levy is going to be availed. Thus the due date for filing Form ITC-03 where Composition Levy is going to be availed from the financial year 2024-21 would be June 9, 2024. Notification No. 30 has extended the time limit for filing Form ITC-03 until 31st July 2024.

iii. Rule 36(4), which was inserted vide Notification No. 49/2019 dt. 19-10-2019, restricts the ITC available in respect of supplier invoices which have not been uploaded by the concerned suppliers in their respective GSTR 1 Returns. A registered person can avail ITC in respect of such invoices only up to a value equal to 20% of the ITC available to such registered person out of all the other invoices in the particular month which have been duly uploaded by the respective suppliers in their.

GSTR 1 Returns. This provision, which restricts a registered person of his legitimate right to claim ITC, tends to be harsh. Notification No 30 /2024 provides that the restrictions of Rule 36(4) will be applied ‘cumulatively’ for the 7 months of February to August 2024. Thus, it seems the registered persons can avail of full ITC even if some of the invoices do not figure in their GSTR 2A in the GSTR 3B Returns for the interim period of February to August 2024. A cumulative calculation to be made for the GSTR 3B for the month of September 2024, when the cumulative calculation will be done to ascertain the invoices for the period February to September 2024 which do not figure in the GSTR 2A. The ITC in respect of such invoices will be restricted to 20% of the total ITC on invoices duly appearing in GSTR 2A during this period. This provision provides partial relief to the registered persons during the interim period, allowing the registered person additional time to follow up with the suppliers who have not uploaded their invoices. (Detailed clarification on the modusoperandi of this provision has not yet been issued by the Central Government.)

2. Notification No. 31/2024-Central Tax, dt. 3-4-2024

Interest @ 18% is payable if tax is not paid by a registered person by the due date. Notification 31/2024 provides for relief to the registered persons for delay in the payment of tax dues for the months of February March and April 2024. These provisions are as under :

i. For taxpayers having an aggregate turnover of more than rupees 5 crores in the preceding financial year :

• a. Nil interest for the first 15 days of delay;
• b. 9% p.a. interest for delay beyond 15 days.

However, the above concessions will be available provided the taxpayer files the respective GSTR 3B Returns for the three months by 24th June 2024

ii. For taxpayers having an aggregate turnover of more than rupees 1.5 crores and up to rupees five crores in the preceding financial year, there will be no interest payable for delay provided :

• a. GSTR 3B Returns for the months of February and March 2024 are filed by 29th June 2024;
• b. GSTR 3B Return for the months of April 2024 is filed by 30th June 2024.

iii. For taxpayers having an aggregate turnover of up to rupees 1.5 crores in the preceding financial year, there will be no interest payable for delayed payment of tax, provided :

• a. GSTR-3B Return for the month of February 2024 is furnished on or before 30th June 2024;
• b. GSTR-3B Return for the month of March 2024 is furnished on or before 3rd July 2024;
• c. GSTR-3B Return for the month of April 2024 is furnished on or before 6th July 2024;

These reliefs in interest for delayed payments is no doubt a welcome move by the Central Government.

However, it is to be noted that the concessions in the matter of interest for delayed payment of tax will not be available if the GSTR 3B Returns are not filed by the taxpayer by the dates prescribed in this Notification. In other words interest @18% p.a. will be payable for the entire period of delay if GSTR 3B Returns are not filed by the dates prescribed in this Notification.

3. Notification No. 32/2024-Central Tax, dt. 3-4-2024

Late fee is payable at the rate of 25 rupees for every day of delay in filing the GSTR 3B Return. Late fee payable in case it is a nil Return is 10 rupees for every day of delay.

Notification 32/2024 provides relief in the form of waiver of late fees for delay in filing GSTR 3B Returns for the months of February March and April 2024, as under

i. In the case of taxpayers having an aggregate turnover of more than rupees 5 crores in the preceding financial year, provided the GSTR 3B Returns are filed by 24th June 2024.

ii. In the case of taxpayers having an aggregate turnover of more than rupees 1.5 crores and up to rupees five crores in the preceding financial year, provided the GSTR 3B Returns are filed for the three months by the dates as under :-

• a. For the months February and March by 29th June 2024.
• b. For the month of April by 30th June 2024

iii. In the case of taxpayers having an aggregate turnover of up to rupees 1.5 crores in the preceding financial year, provided the GSTR 3B Returns for the three months are filed by the due dates as under:-

• a. For the month of February by 30th June 2024.
• b. For the month of March by 3rd July 2024.
• c. For the month of April by 6th July 2024.

However, it is to be noted that there will be no waiver whatsoever of late fee if the GSTR 3B Returns are not filed by the taxpayer by the dates stipulated in this Notification.

4. Notification No. 33/2024-Central Tax, dt. 3-4-2024

There is a penalty prescribed for late filing of the Return in Form GSTR 1. The penalty is 25 rupees per day of delay. If there are no outward supplies and hence it is a nil Return, the penalty is ten rupees per day of delay. Notification 33/2024 waives penalty for delayed filing of the GSTR 1 Returns for the months of March, April and May 2024 and where a the registered person has opted for quarterly filing of GSTR 1 Return, the waiver of penalty for delayed filing of GSTR 1 has been granted for the quarter Jan-March 2024.

However, the waiver granted by this Notification will be available only if the respective GSTR 1 Returns are filed by the registered person by 30th June 2024. If any of these GSTR 1 Returns are not filed till 30th June 2024, penalty at the prescribed rate will be chargeable for the entire period of delay.

5. Notification No. 34/2024-Central Tax, dt. 3-4-2024

Registered persons opting for payment of Composition Tax in terms of S. 10 of the Act are required to file a statement in Form CMP-08 for each quarter within 18 days of the end of the quarter. CMP-08 is a statement of self-assessed Composition tax payable by the taxpayer on the supplies made during the quarter and tax paid. For the quarter ended March 2024 the quarterly CMP-08 statement was due to be filed by 18th April 2024. This Notification grants extension for filing statement in Form CMP-08 till 7th July 2024.

Further, such registered persons are required to file for every financial year a Return in Form GSTR-04 by the 30th April of the following year. Thus, the GSTR-04 Return for the year 2019-20 was 30th April 2024. This Notification grants extension for filing such GSTR 04 Return till 15th July 2024.

6. Notification No.35/2024-Central Tax, dt. 3-4-2024

One of the major steps announced by the Government to restrict spread of COVID 19 is announcement of nationwide lockdown. Under the CGST Acts the registered persons as well as the GST Administration are required to ensure that certain actions expected to be completed under the Act are completed within stipulated time limits/dates. On the side of the GST Administration such compliances could be in the nature of completion of any proceeding or passing of any order or issuance of any notice, intimation, notification, sanction or approval or such other action, etc. On the part of the taxpayers, such actions may include filing of any appeal, reply or application or furnishing of any report, document, return, statement or such other record, etc.

Thus, there are bound to be certain actions that are needed to be completed during the lockdown period. In respect of any such actions that fall due for compliance during the period 20th March to 29th June 2024, this Notification provides extension for complying with such statutory obligations till 30th June 2024.

However, it is to be noted that the extension granted under this Notification will not be available in respect of the following actions which fall due for compliance during the period 20th March to 29th June 2024. Such obligations, which do not qualify for the extended time limit for compliance granted by Notification 35/2024 include the following :

• i. Rules regarding ‘time of supply’ of goods or services for determining the liability to pay tax;
• ii. A Composition dealer exceeding the maximum limit of turnover and thereby becoming ineligible for availing Composition levy scheme.
• iii. S. 25 of the CGST Act prescribes time limit for obtaining registration and other time limits. Such time limits, as provided under S. 25 will not be extended. Similarly, S. 27 prescribes time limits in the matter of dealing with casual taxable persons and non-resident taxable persons. Such time limits will not change.
• iv. S. 31 of the CGST Act stipulates time limits for raising tax invoice by suppliers of goods or services. These time limits will not change.
• v. It is to be noted that the official dates for filing the monthly GSTR 1, GSTR 3B and payment of taxes have not been extended by this Notification. However, as explained above, separate Notifications have been issued waiving/reducing interest for delayed payment of tax and waiving late fee for delayed filing of monthly/ quarterly Returns.
• vi. S. 69(2) of the CGST Act requires that where a person is arrested under the provisions of the Act, the officer making the arrest shall present such arrested person before a Magistrate within 24 hours. This obligation on the part of such officer does not change.
• vii. S.90 of the Act provides that when a partner in a firm retires from the firm, such retiring partner or the firm should inform the Commissioner about the retirement of such partner within 30 days. Once due intimation of the retirement of the partner is given within 30 days, the liability of the retiring partner to pay any taxes remains limited up to the date of retirement. If the partner or the firm fail to give such intimation, the retiring partner would continue to be liable along with the other partners for discharging payment of tax even in respect of tax liabilities arising post his retirement. The obligation to inform does not change as a result of Notification 35/2024.
• viii. S. 122 of the CGST Act stipulates penalties for certain offences under the Act. Any time limits related to operation of S.122 do not change. ix. S. 129(6) provides that in the case of detention or seizure of goods, if the owner of the goods fails to pay tax and penalty on the seized goods within 7 days of such seizure or detention, further proceedings such as confiscation of goods, conveyance and levy of penalty are to be commenced. This time limit of 7 days does not change.
• x. As explained above, the revised time schedules for submitting Return GSTR 3B Returns for the months of February, March and April 2024 have been prescribed by Notification 32/2024. However, concessions have been provided on interest payable for delayed payment of tax and late fee, subject to filing of the Returns by the stipulated dates.
• xi. Where the validity of the e-way bill expires during the period 20th March to 15th April 2024, the validity period of such e-way bill shall be deemed to have been extended till the 30th day of April 2024.

7. Notification No. 36/2024-Central Tax, dt. 3-4-2024

This Notification allows extended time for filing GSTR 3B Returns for the month of May 2024. The extended dates are as under :-

• i. In the case of taxpayers having aggregate turnover of more than rupees 5 crore rupees in the previous financial year, the GSTR 3B Return to be filed by 27th June 2024.
• ii. In the case of taxpayers having aggregate turnover of up to rupees five crore in the previous financial year, whose principal place of business is in the States of Chhattisgarh, Madhya Pradesh, Gujarat, Maharashtra, Karnataka, Goa, Kerala, Tamil Nadu, Telangana, Andhra Pradesh, the Union territories of Daman and Diu and Dadra and Nagar Haveli, Puducherry, Andaman and Nicobar Islands or Lakshadweep, the GSTR-3B Return to be filed by 12th July, 2024.
• iii. In the case of taxpayers having aggregate turnover up to rupees five crore in the previous financial year, whose principal place of business is in the States of Himachal Pradesh, Punjab, Uttarakhand, Haryana, Rajasthan, Uttar Pradesh, Bihar, Sikkim, Arunachal Pradesh, Nagaland, Manipur, Mizoram, Tripura, Meghalaya, Assam, West Bengal, Jharkhand or Odisha, the Union territories of Jammu and Kashmir, Ladakh, Chandigarh or Delhi, the GSTR-3B Return is to be filed by 14th July 2024.