Amnesty Scheme 2023 - A Sigh for all Non-Filers or Not?

Introduction

A sigh for all the non-filers of annual return under GST up to FY 2021-22 providing a safe and legal way for taxpayers to declare their previously undeclared assets and income and pay taxes on them. Soon after India gained independence, tax amnesty programmes were implemented. The first voluntary disclosure programmes were introduced in 1951, opening the door for the revelation of unaccounted funds without concern about legal repercussions (VDIS Tyagi Scheme). The taxpayers had doubts about the guarantees of immunity, and so this programme failed. It is debatable as to whether the amnesty scheme brought by the government will achieve its goals this time.

Pros & Cons

~ Increase Revenue Collection

1. Increase revenue collection for the government.
2. Undeclared assets and income can be regularized through this program.
3. Broaden the tax base for the government.

~ Encouraging Tax Compliance

1. Encourage tax compliance among taxpayers.
2. No fear of legal consequences as it is a safe and legal way for taxpayers
3. Improve tax compliance in the country.

~ Boost Economic Activity

1. Declaring previously undeclared assets and income and pay taxes on them.
2. Inject more money into the economy.
3. Leading to increased consumption, investment, and job creation.

~ Reduce Litigation

1. Reduce litigation between taxpayers and the tax authorities.
2. Reduce the burden on the courts and the tax authorities, and also save time and resources.

~ Unfair to honest taxpayers

1. Unfair to honest taxpayers who have been paying their taxes regularly.
2. No legal consequences for those who have been evading taxes.

~ No Guarantee of long-term compliance

1. No guarantee whether it will continue, it is just one time.
2. Separate infrastructure to process.

GSTR-4 (Quarterly/Annual)

Notification 02/2023 CT dtd. 31.03.2023

Person who can avail

●????Composition taxable persons

●????Who did not file GSTR-4 for quarters July 2017 to March 2019 or for the financial years from FY 2019-20 to FY 2021-22 on or before due dates.

Benefits

●????Other than Nil return - Late fee fixed at max Rs. 500 (i.e., Rs.250 each for CGST and SGST Act) per return.

●????Nil return - No Late fee

Validity

●????To be filed between 1st April 2023-30th June 2023

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GST REG-21 (Application for revocation of cancellation of GST registration)

Notification No. 03/2023 CT dtd. 31.03.2023

Person who can avail

●????Any taxpayer whose GST registration is canceled by GST officer on or before 31st December 2022 for the reasons such as:

(i) Failure to file returns for six months/two quarters continuously

(ii) Failure to conduct business for a continuous period of six months from the date of registration.

And

Such taxpayers did not apply for revocation in REG-21 within 30 days from the date of service of the cancellation order by the GST officer.

Note: Irrespective of fact that appeal was filed and rejected on grounds of not meeting the time limit of revocation.

Benefits

●????Can file REG-21 in extended time period

Condition: File all pending returns with taxes, late fee and interest, as applicable up to date of cancellation of GST registration.

Validity

●????To be filed on or before 30th June 2023

●????The time limit increased from 30 days to 90 days (further extendable by 180 days).

GSTR-3B & GSTR-10 (Pending GST returns Section 62 CGST Act)

Notification No. 06/2023 CT dtd. 31.03.2023

Person who can avail

●????Any taxpayer who defaults filing of any GST return (GSTR-3B/10) within 30 days from the service of the assessment order issued on or before the 28th of February 2023.

●????The time frame for filing a return to enable the deemed withdrawal of the best judgment assessment order is being extended from 30 to 60 days (extendable by another 60 days subject to certain conditions).

Benefits

●????Deemed withdrawal of best judgment assessment order under Section 62 of the CGST Act, even if an appeal is filed or decided.

Condition: File all such pending returns with taxes, late fee and interest, as applicable.

Validity

●????To be filed on or before 30th June 2023

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GSTR-9 and 9C (Annual Return)

Notification No. 07/2023 CT dtd. 31.03.2023 & Rationalization of late fee (GSTR-9) FY 2022-23 onwards -

GSTR-9

Person who can avail

●????Registered regular taxpayers mandated to file GSTR-9 from FY 2017-18 to FY 2021-22 but have not filed on or before the respective due dates.

Benefits

●????Can file GSTR-9 at concessional late fee

●????Late fee Maximum Rs.20,000. (i.e.10,000 each under CGST and SGST Act).

Validity

●????To be filed on or before 30th June 2023

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GSTR-9C

Person who can avail

GST registered taxpayer to whose aggregate annual turnover is more than Rs 5 crore.

Benefits

No specific provision and is subject to a general penalty of Rs 25,000.

Validity

31st December of next FY, either with or after filing GSTR-9 which is subject to CBIC notifications for any due date extension.

Late Fee

Annual turnover is up to INR 5 crore - Late fees shall be INR 50 per day, (Rs. 25 CGST + Rs. 25 SGST) maximum of 0.04% of turnover in the state/ UT.

Annual turnover is more than INR 5 crore and up to 20 crores - Late fees shall be INR 100 per day, (Rs. 50 CGST + Rs. 50 SGST) maximum of 0.04% of turnover in the state/UT.

No change in the late fees if the Annual turnover exceeds INR 20 crore.

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GSTR-10 (Final Return)

Notification No. 08/2023 CT dtd. 31.03.2023

Person who can avail

●????Taxpayers whose GST registration is cancelled within three months of the date of cancellation or date of order of cancellation, whichever is later.

●????Whose registration has been cancelled under clause (b) or clause (c) of sub-section (2) of section 29 of the said Act on or before the 31st day of December, 2022, and who has failed to apply for revocation of cancellation of such registration within the time period specified in section 30 of the said Act.

Benefits

●????Can file GSTR-10.

●????At a concessional late fee of maximum Rs.1,000. (i.e., 500 each under CGST and SGST Act).

●????Late fee is waived off in excess of Rs.1,000 for delayed filing of GSTR-10.

Validity

●????To be filed on or before June 30, 2023.

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Order u/s 73

Notification No. 09/2023 - CT dated. 31.03.2023

Time limit for issuance of an order under section 73 has been extended as given below in the table. This extension has also led to the extension for the issuance of SCN automatically and has been issued under section 168A.

Financial Year Revised Due Date

2017-2018 31.12.2023

2018-2019 31.03.2024

2019-2020 30.06.2024

Conclusion

The government reduced the late filing charge to extend the deadline for submitting GSTR-3B for the prior tax period. It has not, however, extended the deadline for submitting an ITC claim for the same time period. The amnesty programme prohibits the beneficiary from claiming such an ITC. There is no concession for late GSTR-1 filing under the plan. The scheme does not apply to the GSTR-1 return. The reach of the scheme should be increased by the government regarding the ITC for previous periods if the deadline has passed. The receivers of such ITCs must generally be given the chance.?Otherwise, it would create a legal gap and must be looked upon.?

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Views expressed are strictly personal and cannot be considered as a legal opinion in case of any query. For feedback or queries email us [email protected] .