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As a GST registered taxpayer, you already know that there are multiple GST return forms you have to file on a monthly/quarterly/yearly manner, failing which you will be liable to pay late fees, interest and penalties. The GST Amnesty Scheme was introduced as a solution and relief to the challenges of missing returns filing – especially for GSTR-3B (i.e., monthly/quarterly summary statement). Here we take a closer look at the meaning, purpose and importance of the GST Amnesty Scheme, how to apply, the due dates, who can apply and other details specific to the scheme.
What is GST Amnesty Scheme?
Let us begin by looking at the meaning of GST Amnesty Scheme.
The GST Amnesty Scheme is a form of tax relief scheme for businesses that have defaulted or not filed their returns under the Goods and Services Tax framework. In general, when taxpayers miss filing returns within the due dates, there are late fees, interests, and often penalties associated with it. The Amnesty Scheme under GST provides the provision of allowing businesses to file returns past its deadline without paying heavy fines and penalties.
The purpose of the scheme therefore is to clear the backlog of returns, reduce tax burden on small businesses, and rectify any lapses in submitting GST return forms.
The Amnesty Scheme under GST has been instrumental for small businesses. With the scheme in place, small business can pay lesser fines (fixed amount) for non-filing of returns. This not only helps small businesses to stay GST compliant and regularise previous years returns, but also maintain operational efficiency.
Benefits and Challenges of GST Amnesty Scheme
When it comes to regularising pending tax payments and streaming tax obligations, the GST Amnesty Scheme has been a boon for business. There are several benefits that the scheme offers but it’s not without its challenges. We take a brief look at the benefits and challenges of the Amnesty Scheme in GST.
GST Amnesty Scheme benefits and challenges
| GST Amnesty Scheme benefits | GST Amnesty Scheme challenges |
| Lowers late fees and penalties for delayed GST return filing | Risk of being misused as some businesses might miss timely returns filing anticipating extension or updates to the scheme |
| Facilitates taxpayers to clear outstanding liabilities and stay GST compliant | Provides temporary relief to tax burden and effective in the short run; may lead to overall revenue losses as it does not address the long-term challenges of non-payment or non-compliance |
| Enables taxpayers and the government to clear unfiled returns backlog | No relief on GSTR-1, relief on maximum late fees for GSTR-3B (up to ₹1000 for filing by 31 August 2021), etc. |
| Reduces the overall penalty amount thereby enabling business to have more capital/cash flow in hand | ITC claim restrictions which may discourage many taxpayers to opt for the scheme |
| Increases government’s revenue by collecting pending sums from previous years | Adds to administrative costs for the government in maintaining and implementing the scheme |
| Decreases GST appeals and disputes and additional litigation challenges by clearing pending payments | Businesses that are compliant might feel disadvantaged |
| Helps businesses to keep clean GST records, builds trust, and simplifies the process | Inadequate awareness about the scheme, its benefits and processes, eligibility and applicability, might impact the overall outcome |
Amnesty Scheme in GST reduction in late fees
The primary benefit of the GST Amnesty Scheme is the reduction on charges and interests on late fees, overdue, and penalties on having missed to file GSTR forms. In the next section we highlight the specifics on late fee reduction under the scheme and its limitations.
Late fee reduction under GST Amnesty Scheme 2022:
This is applicable in the following cases:
- Businesses with arrears of up to ₹10,000: This amount can be waived off.
- Businesses with arrears of up to ₹10 lakhs: A lump sum can be paid equal to 20% of the arrears. The remaining 80% can be waived off.
Note: Arrears as of 1 April 2022. Last date of the scheme is 30 September 2022.
How late fee reduction under the scheme works?
The late fee payment under the GST Amnesty Scheme is simple. For instance, for missing GSTR-3B filing, the late fees is fixed at ₹1,000 per return.
Let us take the case of a business (for instance, Company ABC) with an annual revenue of less than ₹1.5 crores. Late fees for the business under standard GST norms for GSTR-3B would be ₹50 per day and maximum ₹2,000 to be divided between CGST and SGST.
So, if the default has been for 100 days, the due amount payable will be ₹2,000 (maximum late fees) and not ₹5,000. However, under the Scheme, this amount is reduced to ₹1,000 per return only.
Also read: GST types in India – Know the difference between CGST, IGST, SGST
Late fee reduction under GST Amnesty Scheme 2023
| GSTR form | Benefits | Eligibility and Validity |
| GSTR-4 (quarterly/monthly) | Max. late fees: ₹500/per return (fixed)
For NIL return taxpayers: No late fees |
Eligibility: Taxpayers under the GST Composition Scheme (specific entities)
Validity dates: 1 April 2023 to 30 June 2023 |
| GSTR-9 annual return | Max. late fees: ₹20,000
For years up to 2022, late fees exceeding ₹20,000 waived off |
Eligibility: Regular taxpayer
Validity dates: 1 April 2023 to 30 June 2023 |
| GSTR-10 final return | Max. late fees: ₹1,000 | Eligibility: Within 90 days of GST registration cancellation
Validity dates: 1 April 2023 to 30 June 2023 |
Source: //tutorial.gst.gov.in/downloads/news/new_functionalities_compilation_may_2023.pdf
Recent updates to the scheme
There have been several updates to the scheme over the years to ensure there’s greater tax compliance and ease tax burdens on taxpayers.
Initial launch and extension up to 2019:
The scheme was initially introduced after the GST system was launched. Considering it was a new system, there were many you missed the due dates for filing and there was backlog of unfiled returns. With the provision to cover periods between July 2017 to September 2018, an extension was provided with substantial reduction in their fines.
Updates in 2020-2021: GST Amnesty Scheme 2021 and its validity
The global economic crisis in 2020 affected all businesses alike and the government reconsidered to extend the Amnesty Scheme to provide relief. More lenient terms were introduced and the late fees for non-payment of GSTR-3B form was reduced (1 June 2021 notification). Maximum late fees was reduced to ₹1,000 (regular taxpayer) and ₹500 (for NIL returns). Validity was also extended, and last date for filing GSTR-3B for the previous years was 30 November 2021.
The GST Amnesty Scheme 2021 was beneficial for taxpayers with pending returns From July 2017 to April 2021. The validity for filing return was 31 August 2021.
Revisions in 2022-2023: GST Amnesty Scheme 2023
Realising the multiple benefits of the Amnesty Scheme in GST and the value it adds to taxpayers, further adjustments were made especially for businesses/sectors still recovering from the setback of the previous years. The scheme has also been extended to defaulters of previous year’s GSTR-4, GSTR-9 and GSTR-10 and additional time for revocation of GST registration cancellation.
Special GST Amnesty Scheme 2024:
A special provision has been made by the CBIC for any dispute over GST tax demand order. Taxpayers can now file an appeal by 21 January 2024 to dispute the tax demand orders. There are specific eligibility to this scheme and a process to file for the special scheme. (Source: The Economic Times, 23 December 2024).
FAQs
What is the GST amnesty Scheme 2024?
A special GST Amnesty Scheme was launched that was designed to help taxpayers dispute GST demand orders up to ₹25 crores. Eligible taxpayers would have to file GST Form APL-01 before the due date of 31 January 2024. Once a GST notice (i.e., demand notice) is received the following steps can be undertaken:
- 12% of the amount disputed amount (if one disputes the entire amount) must be deposited with the GST department (max. disputed amount is ₹25 crores)
- 20% of the amount (minimum) must be transferred electronically (Electronic Cash Ledger)
The process is the same if only a part of the demand order is disputed. For instance, if the demand order is for ₹50,000 and the disputed amount is ₹10,000, the remaining ₹40,000 (non-disputed) must cleared first.
(Source: The Economic Times, 23 December 2024).
Can GST late fees be waived?
Yes, part of the late fees can be waived as per latest GST notifications. For instance, as per the GST Amnesty Scheme 2023, for GSTR-10 any late fees exceeding the fixed sum of ₹1,000 can be waived.
What is GST Amnesty Scheme for revocation of GST registration?
The GST Amnesty Scheme notification on 31 March 2023 (i.e., 03/2023) also included a special provision for revocation of GST registration cancellation. Here, an extension was provided on GST registration cancellation application. For those whose registration stood cancelled as of 31 December 2022, could now file REG-21 by 30 June 2023.
*This article is for information only. For more details please visit the official GST website or consult with a GST practitioner or CA or tax consultant for professional advice.
Sohini is a seasoned content writer with 12 years’ experience in developing marketing and business content across multiple formats. At Tata nexarc, she leverages her skills in crafting curated content on the Indian MSME sector, steel procurement, and logistics. In her personal time, she enjoys reading fiction and being up-to-date on trends in digital marketing and the Indian business ecosystem.
The scheme definitely eases the burden of pending tax records and fines for the business, giving them more incentive to finish up their tax liabilities.
I feel that this scheme can also be misused by those who want to avoid paying the fines that they have racked up due to non-compliance. Does the govt. have a solution for such cases?
What is to be done in case Nil returns are filed for FY (no transactions) and GSTR not filed in time. When i am trying to file GSTR10 . its showing a late fee of Rs 10000. What cam be done in such case? Whom to approach for waiver?