GST law supports the free flow of the input credit. It is used to permit tax-free transactions and removes the rollover effects. Amnesty is directed towards forgiving the crime or the act of forgiveness for the previous offences.
From the compliance of the old dictionary, Amnesty means “a fixed period of time during which people are not punished for committing a particular crime”. Under the Cambridge Academic Content Dictionary, Amnesty suggests “a decision by a government to forgive people who have committed particular illegal acts or crimes, and not to punish them.”
According to the Merriam-Webster Dictionary, Amnesty reveals that “the act of an authority (such as a government) by which pardon is granted to a large group of individuals often before a trial or conviction.”
Amnesty Scheme Under GST
GST Amnesty Scheme was the first revealed to cover the period from July 2017 to September 2018. A one-time extension to the time limit was furnished. The assessee can furnish these due returns on or prior to 31st March 2019.
CBIC has executed the GST Amnesty scheme for the 2nd time via central tax notification number 19/2021 provided on 1st June 2021. It applies towards the due GSTR-3B returns for the previous tax period amid July 2017 and April 2021. The GST amnesty policy was applied from 1st June 2021 to 31st August 2021.
According to the new central tax notification number 33/2021 provided on 29th August 2021 the validity of the amnesty scheme under GST has been prolonged up to 30th Nov 2021 from the previous last date of 31st August 2021. It reveals that the assessee who has due GSTR-3B amid July 2017 and April 2021, can furnish these returns on or prior to 30th November 2021 with the diminished maximum late fee.
Amnesty Scheme provide the waiver of Interest & Penalty for non-fraud cases from FY 2017-18 to 2019-20 notified with effect from 01/11/2024. Furthermore to avail benefit tax demand as per notice /Order is required to be paid on or before 31/03/2025.
The assessee shall get the concession upon the late fee liable to pay beneath the GST amnesty scheme. The maximum late fee is limited to Rs 1000 per return that is Rs 500 beneath CGST and 500 under SGST) for GSTR-3B with any tax liability excluding the nil GSTR-3B furnishing.
Apart from that the maximum late fee payable for the nil GSTR-3B is fixed at Rs.500 per return (i.e. Rs.250 each beneath CGST and SGST). Additionally, the late fee furnished for the return shall be less than the mentioned two amounts. These are the total fees that are computed beneath the act for every day of late and the maximum late fee as written above.
GST Amnesty Scheme Right Now with Its Problems
Those who have the tax liability and who do not furnish the GSTR-3B have not provided the interest waiver.
The GSTR-1 return has not come under the policy. Thus there is no late fees waiver or benefit to furnish the due GSTR 1 for that tax period as the GSTR-3B that the assessee has an intention to furnish.
The original goldmine is the non-admissibility of the ITC. The government has generated more money as of section 16(4) time limit for the admissibility of the ITC.
The Section 16(4) Extracts
Section 16: ITC Eligibility & Conditions
“(4) A registered person shall not be entitled to take input tax credit in respect of any invoice or debit note for supply of goods or services or both after the 6[thirtieth day of November] following the end of financial year to which such invoice or 7[****] debit note pertains or furnishing of the relevant annual return, whichever is earlier.”
“8[Provided that the registered person shall be entitled to take input tax credit after the due date of furnishing of the return under section 39 for the month of September, 2018 till the due date of furnishing of the return under the said section for the month of March, 2019 in respect of any invoice or invoice relating to such debit note for supply of goods or services or both made during the financial year 2017-18, the details of which have been uploaded by the supplier under sub-section (1) of section 37 till the due date for furnishing the details under sub-section (1) of said section for the month of March, 2019.]”
In the easier way towards the financial year, ITC can be claimed prior to furnishing the subsequent years’ September GST Return or GST Annual Return i.e the previous one. You just know about the GST yearly return which is to be furnished late as their time gets prolonged since the incorporation of the GST inside that case the GST return of Sept is important.
Examples of this:
Mr X supplies an item to Mr Y at Rs. 500/- plus 28% GST. Mr Y supplies that item to Mr Z at Rs. 650/- plus 28% GST. Mr Z then provides that item to the end consumer at Rs. 800/- plus 28% GST. Mr X, Mr Y, and Mr Z are Registered Persons, and everyone pays the Tax duly and files return properly and in time. Let’s see the Tax collected:
Amount in INR:
| Person | Inward Supplies | ITC | Outward Supplies | Output GST | Cash GST |
|---|---|---|---|---|---|
| X | – | – | 500 | 140 | 140 |
| Y | 500 | 140 | 650 | 182 | 42 |
| Z | 650 | 182 | 800 | 224 | 42 |
Hence, the Total end sale was “Rs. 800/-+ and Tax on which was Rs. 224/-. The same was paid in Cash to the Government through X, Y & Z (140+42+42 = 224).”
Therefore the operations have been successfully implemented but through an example say Mr Y defaulted in filing the taxes and now Mr. Y files his return in the GST Amnesty scheme.
“What shall be done when Mr Y files his return in Amnesty and Section 16(4) restrictions are there what is the impact of Tax Collections:”
Amount in INR:
| Person | Inward Supplies | ITC | ITC Allowed | Outward Supplies | Output GST | Cash GST |
|---|---|---|---|---|---|---|
| X | – | – | – | 500 | 140 | 140 |
| Y | 500 | 140 | – | 650 | 182 | 182 |
| Z | 650 | 182 | – | 800 | 224 | 224 |
Because of Section 16(4), with the rejection of ITC, the Government obtained Rs. 546/- (140+182+224) as tax and the related Interest and Late Fees.
Post to the application of rule 36(4) and finding out the ability “of ITC GSTR-2A/2B, Mr Z would be able to take credit 5/10/20%” above what is seen towards GSTR-2A.
Conclusion:
The admissibility of ITC beneath the policy is the real thing. But the amnesty scheme permits the tax payment due towards the past periods it does not accept the ITC claims in that return of the earlier fiscal year. The GST amnesty shall not rush the deadline to avail the ITC for that period. Thus it legally does not permit the assessee from reporting the ITC while furnishing the GSTR-3B of the previous tax period. The recipient will not avail of the ITC beneath the GST amnesty policy.
The assessee should be given the advantages of the policy by permitting the ITC of the previous periods in which the time limit elapses. The government should take note of the exceptions and correct the legitimate gap soon. This GST amnesty scheme is a goldmine for the government and a loss for taxpayers & businesses.
This article has been taken from a reference source which has been authored by CA Abhishek Raja Ram.
Sir,
I received Intimation of tax ascertained as being payable under Section73(5) & ITC claims after the last date of availing of ITC as per section 16(4)- GSTR 3B.
Kindly suggest what can be done in this matter as all ITC is genuine, and the only problem is a return for the period of FY 2018-19 filed in Nov 2019, hence the problem raised.
Please help with this.
Since you have filed your return after the due date of Sep 2019 hence they have arisen such demand, For more detail kindly contact GST
practitioner
Valid points and right view. At the earliest Government has to make necessary amendment to allow the Tax payers to avail the ITC without time limit. Especially for those who are all availed the first and second GST amnesty scheme. Then only this opportunity will be availed by maximum Tax payers and more MSME business people come forward voluntarily.