GST Amnesty Scheme 2023: Embrace the Path to Compliance & Prosperity

The Indian government has reintroduced the GST Amnesty Scheme in 2023 to help taxpayers cope with the economic effects of the extended bureaucratic limbos.

Under this scheme, individuals or businesses who still need to pay or file their GST returns within the stipulated deadlines can now do so without facing heavy penalties.

It is essential to file the GST returns sequentially to avoid complications. Failure to comply may result in penalties or even cancellation of GST registration.

In this article, we will expand on the vast rich history of GST and learn how the Amnesty Scheme provides relief by allowing taxpayers to submit their pending GST returns, thereby preventing severe consequences.

An Opportunity for Taxpayers: The GST Amnesty Scheme Explained

The Goods and Services Tax (GST) Amnesty Scheme, initially introduced to cover the period from July 2017 to September 2018, granted taxpayers an extension to file pending returns until March 31 2019.

Responding to the calls from tax professionals and industry leaders, the government reopened the GST Amnesty scheme in early 2020, acknowledging the challenges posed by the COVID-19 pandemic.

The Central Board of Indirect Taxes and Customs(CBIC) implemented the GST Amnesty Scheme for the second time through a notification on June 1 2021. This extension encompassed pending GSTR-3B returns from July 2017 to April 2021.

In a recent development, during the 49th meeting of the GST Council held in February 2023, recommendations were made to implement the GST Amnesty Scheme for taxpayers who have yet to file GSTR-4, GSTR-10, and GSTR-9 for past financial years.

Additionally, relief was proposed for those with cancelled GST registrations, granting them more time to revoke such cancellations. The authorities would not invoke Section 62 against taxpayers who failed to submit returns by the defined time limit in the notice, provided they file on or before June 30 2023.

Decoding GST Amnesty Scheme 2023

On March 31, 2023, the CBIC published new Central Tax Notifications to execute the 2023 GST Amnesty Scheme.

The GST Council recently issued the following suggestions, which have been made public:

The Birth of GST: A Journey Towards Simplification

The concept of a nationwide GST in India was first introduced by the Kelkar Task Force on Indirect Taxes in 2000. The aim was to replace the complex and fragmented tax structure with a unified system that simplified compliance, reduced tax cascading, and promoted economic integration.

The First Discussion Paper, created by the Empowered Committee of State Finance Ministers, was published in 2009. However, complications with paying out compensation to states and other things came up.

After several amendments, the Bill for GST was passed in the Rajya Sabha and the Lok Sabha in August 2016. Ratified by the required number of states, it became the 101st Constitution Amendment Act of 2016. With the notification of the GST Council and the establishment of the GST Council Secretariat in September 2016, the stage was set for the implementation of GST on July 1, 2017.

The Anatomy of GST: Simplifying Taxes, Empowering Businesses

The Central GST (CGST) and State GST (SGST) are assessed concurrently by the Central and State governments, creating a dual allied system under which GST functions. Interstate purchases and imports are subject to Integrated GST (IGST) - levied on them by the Central Government and distributed to the destination state.

The GST Council, consisting of the Union Finance Minister and representatives from all states and union territories, plays a crucial role in decision-making regarding tax rates, exemptions, and revenue sharing between the Central and State Governments.

Features of GST: Transforming the Indian Tax Landscape

Here are some of the most notable features of GST:

• Unified One Nation, One Tax: GST replaced multiple indirect taxes, bringing uniformity to the tax structure and eliminating tax cascading.
• Relaxed Dual Structure: CGST and SGST operate at the Central and State levels, respectively, while IGST applies to interstate transactions.
• Streamlined Destination-based Tax: GST is levied at each stage of the supply chain, allowing for seamless credit flow and reducing the tax burden on consumers.
• Input Tax Credit (ITC): Businesses can claim credit for tax paid on inputs, avoiding double taxation and reducing all-around tax liability.
• Comprehensive Coverage: GST applies to most goods and services, with exceptions for alcohol for human consumption. Certain petroleum products and tobacco attract GST with the Center's power to levy Central Excise duty.
• Threshold Exemption: Small businesses with turnover below specified thresholds are exempt from GST, reducing compliance burden.
• Composition Scheme: Small taxpayers with turnover below a prescribed limit can opt for a simplified scheme with fixed GST payment and reduced compliance requirements.
• Transparent Online Compliance: The Goods and Services Tax Network (GSTN) provides an online portal for registration, return filing, and tax payment, streamlining processes and easing compliance for taxpayers.
• Anti-Profiteering Measures: The National Anti-Profiteering Authority (NAA) ensures that businesses pass on the benefits of GST to consumers, preventing unfair pricing practices.
• Increased Compliance and Transparency: GST brings more businesses into the formal economy, curbing tax evasion and enhancing transparency through digitisation and electronic records.
• Sector-Specific Exemptions: Sectors such as healthcare, education, and essential commodities enjoy exemptions or reduced tax rates, promoting affordability and accessibility.

Conclusion

As India continues its journey with GST, the focus remains on further simplifying the tax structure and expanding its coverage. Efforts are underway to resolve challenges and address various concerns, promoting a business-friendly environment.

ViTWO believes GST Amnesty Scheme offers a lifeline to taxpayers, providing an opportunity to rectify past compliance issues. As India's tax system continues, GST remains a catalyst for growth, efficiency, and economic integration. With its comprehensive coverage, simplified procedures, and transparent framework, GST sets the stage for a brighter future for businesses and the nation wholly.