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GST: Changes on Account of Covid-19

Author: Jebin George

As Indian economy is inching towards the completion of 3 years of the GST regime, a lot of issues and concerns still need to be addressed to ensure a smoother ride with minimal flaws for Indian business. While the Govt. was in full swing to resolve the Industry’s apprehensions, the same has got worsened owing to the pandemic Covid -19.

The COVID-19 outbreak has disrupted the world’s economy. Several measures are being taken by all countries to control the impact of the pandemic on businesses. The Indian government has announced relief in GST compliances to relax regulatory distress among the businesses registered in India under GST amid COVID-19 pandemic. The announcement was made through various notifications released by the Central Board of Indirect Taxes and Customs (CBIC).

The Effect of Covid-19 outbreak in Indian economy can be analysed by looking into the E-way bills raised during these periods, The total assess value of E-way bills raised in the month of Feb 2020 was INR.15.39 trillion were as the total assess value of E-way bills raised in the month of April 2020 was INR.3.9 trillion.

The upward movement in E-way Bill Generation from 3rd week of April is uplift the hopes of all the stake holders.

Relaxations & Relief measures

Relaxation on ITC Credit which can be availed in GSTR-3B under rule 36(4) of CGST Rules

Restriction under Rule 36(4) of the CGST Rules would not apply during lockdown period i.e. February 2020 to August 2020 (‘relaxation period’)

While filing GSTR-3B for the month of September 2020 i.e. post the relaxation period, the said restriction on availment of unmatched credit up to 10% of the matched credit portion shall be computed cumulatively for the relaxation period including the month of September 2020.

Relief in late fee to Taxpayers filing Form GSTR-1

Government has extended dates for GST filings as notified vide Notification No. 53/2020 dated 24.06.2020.Circular No. 141/1/2020-GST dated 24th June, 2020 has also been issued in this regard.

Late Fee Relief to Normal Taxpayers filing Form GSTR-1:

Note: If Form GSTR-1 for the period mentioned in Table above is not filed by the notified dates, late fee will become payable from the due dates for these returns.

Relief in late fee to Taxpayers filing Form GSTR-3B

Government has extended dates for GST filings as notified vide Not. No. 52 & 54/2020 dated 24.06.2020 and Not. No 57/2020-CT dated 30.06.2020.

Late Fee Relief to Normal Taxpayers filing Form GSTR-3B:

a. Taxpayers having aggregate turnover > Rs. 5 Cr. in preceding FY

b. Taxpayers having aggregate turnover upto Rs. 5 crores in preceding FY

[1] * Group A- Chhattisgarh, Madhya Pradesh, Gujarat, Maharashtra, Karnataka, Goa, Kerala, Tamil Nadu, Telangana, Andhra Pradesh, Daman & Diu and Dadra & Nagar Haveli, Puducherry, Andaman and Nicobar Islands, Lakshadweep

[1] * Group B- Himachal Pradesh, Punjab, Uttarakhand, Haryana, Rajasthan, Uttar Pradesh, Bihar, Sikkim, Arunachal Pradesh, Nagaland, Manipur, Mizoram, Tripura, Meghalaya, Assam, West Bengal, Jharkhand, Odisha, Jammu and Kashmir, Ladakh, Chandigarh, Delhi

Note 1: If the registered persons fail to furnish Form GSTR-3B returns for the tax periods (except August,2020) according to the condition mentioned in the Table 1(a) and (b) above, but furnish the returns till the 30th day of September, 2020, the total amount of late fee payable shall be completely waived if the tax payable is NIL and shall be capped at Rs 500 per return, in case of any tax liability.

Note 2: For the taxpayers having an aggregate turnover of more than Rs 5 Cr. in the preceding financial year, who fail to furnish the return in FORM GSTR-3B for the months of May, 2020 to July, 2020, by the due date but furnish the said return till the 30th day of September, 2020, the total amount of late fee shall be capped at Rs 500 per return and shall stand fully waived for those taxpayers where the total amount of tax payable in the said return is Nil.

Note 3: Taxpayers who are yet to file Form any month(s) from July, 2017 till Jan., 2020, can now file Form GSTR-3B from 1st July, 2020 till 30th Sept., 2020, without any late fee, for those months in which they did not have any tax liability. However, for the months they had a tax liability, their late fee would be capped at Rs 500 per return.

Relief in payment of interest to Normal Taxpayers filing Form GSTR-3B

a. Taxpayers having aggregate turnover > Rs. 5 Cr. in preceding FY

b. Taxpayers having aggregate turnover upto Rs. 5 crores in preceding FY (Group A)

c. Taxpayers having aggregate turnover upto Rs. 5 crores in preceding FY (Group B)

Relief in opting for Composition by Taxpayers, filing other Returns & EWB.

Due to COVID-19 pandemic and challenges faced by taxpayers, Government has extended dates for GST filings. These are notified in Central Tax Notifications 30, 34 & 35/2020 dated 03.04.2020 & 47/2020 dated 09.06.2020 & 55/2020 dated 27.06.2020 & 59/2020, dated 13.07.2020.

Opt in for Composition in FY 2020-21:

Normal Taxpayers wanting to opt for Composition should not file GSTR3B and GSTR 1 for any tax period of FY 2020-21 from any of the GSTIN on the associated PAN.

Compliances for Composition taxpayers:

NRTP, ISD, TDS & TCS taxpayers:

Extension of validity period of EWB:

The validity of E-way bills (EWBs), generated on or before 24th March, 2020, and whose validity expiry date lies on or after 20th March, 2020, is deemed to have been extended till 31st August, 2020.

New Facilities Available & Improvements made

Tracking GST Refund Application Status on the GST Portal and PFMS portal

  • The functionality to track the status of refund application has been available on the GST portal. By utilizing this functionality, the taxpayers can know the stage at which the refund application is pending with the tax-officer/ taxpayer.

  • A tax officer can issue payment order only after Public Financial Management System (PFMS) has validated the bank account mentioned in the refund application (RFD-01). Similarly, final disbursement of refund amount sanctioned by the tax officer happens only after (PFMS) has validated the bank account mentioned in the payment order (RFD-05). Thus, validation of bank account takes place at two stages. However, the exact detailed status of bank account validation is not available on the GST Portal.

  • The Public Financial Management System (PFMS) of the Controller General of Accounts (CGA) has made available a central portal to track the status of bank account validation and disbursal of refund amount. By visiting the PFMS portal at https://pfms.nic.in/static/NewLayoutCommonContent.aspx?RequestPagename=Static/GSTN_Tracker.aspx the taxpayer can track the status of bank account validation.

Filing NIL Form GSTR-3B through SMS on GST Portal

  • A taxpayer may now file NIL Form GSTR-3B & GSTR-1, through an SMS, apart from filing it through online mode, on GST Portal.

  • If more than one authorized representative/ signatory have the same mobile number registered on the GST Portal, such SMS requests will not be accepted for filing NIL Form GSTR-3B.

File FORM GST PMT 09, to transfer/shift the money available in Electronic Cash ledger, between various major and minor heads of GST

Taxpayers deposit money using Challan and the paid amount gets credited in the particular head in the Electronic Cash ledger and the same can be utilized in settling liabilities of that head only. In case a taxpayer deposited any amount under a major head i.e. IGST, CGST, SGST/UTGST and Cess or minor head i.e. Tax, Interest, Penalty, Fee and Others, they can then utilize this amount for discharging their liabilities only under that major head and minor head. Sometimes, inadvertently, the taxpayer pays the amount under the wrong head and it cannot be used to discharge the liabilities which may be due in another head. In such cases taxpayers can claim the refund of the amount which may have been deposited under wrong head in GST by filing a refund application in FORM RFD-01 under the category “Excess balance in electronic cash ledger.” The process of filing refund claim and its disbursement can sometimes lead to blockage of funds for the taxpayer.

Form GST PMT-09 is now available on GST portal and it enables a taxpayer to make intra-head or inter-head transfer of amount available in Electronic Cash Ledger. A taxpayer can file GST PMT 09 for transfer of any amount of tax, interest, penalty, fee or others available under one (major or minor) head to another (major or minor) head in the Electronic Cash Ledger. Form GST PMT 09 provides flexibility to taxpayers to make multiple transfers from more than one Major/Minor head to another Major/Minor head if the amount is available in the Electronic Cash Ledger. To file Form GST PMT-09 taxpayers are required to login on GST portal with valid credentials and navigate to Services > Ledgers > Electronic Cash Ledger > File GST PMT-09 for Transfer of Amount option.

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