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GST Council approves late fee amnesty scheme for small taxpayers

Taxpayers can now file their pending returns and avail the benefits of this Amnesty scheme with reduced late fees, said Sitharaman at a press briefing after the 43rd GST Council Meeting

Finance Minister Nirmala Sitharaman Finance Minister Nirmala Sitharaman

Finance Minister Nirmala Sitharaman announced on Friday that in order to provide relief to small taxpayers, the GST Council has recommended an amnesty scheme for reducing late fee payable in these cases.

"One of the biggest decisions today is the reduction of compliance burden of small taxpayers and medium-sized taxpayers. Late fee amnesty related matters were decided upon," Sitharaman said at a press briefing after the 43rd GST Council meeting.

"To provide relief to the small taxpayers and reduce the compliance burden for small taxpayers and medium taxpayers, an amnesty scheme has been recommended for reducing the late fee payable," the Finance Minister stated.  

Taxpayers can now file their pending returns and avail the benefits of this amnesty scheme with reduced late fees, Sitharaman explained.

"Late fees have also been rationalised. The rationalised late fee and the decision to reduce the maximum amount of late fee for small taxpayers will come into effect for future tax periods. This will provide a long term relief to small taxpayers," Sitharaman added.

"The announcements regarding reduction of late fee and the amnesty scheme for small taxpayers who might be unable to file their returns on time is a welcome move," Mahesh Jaising, Partner, Deloitte India.

In order to provide relief to the taxpayers, the late fee for not filing Form GSTR-3B for the tax periods from July 2017 to April 2021 has been reduced, according to a government press release. Late fee has been limited to a maximum of Rs 500 (Rs. 250 each for CGST and SGST) per return for taxpayers who did not have any liability for the stated tax periods. Meanwhile, late fee has been limited to a maximum of Rs 1,000 (Rs 500 each for CGST and SGST) per return for other taxpayers.

"The reduced rate of late fee would apply if GSTR-3B returns for these tax periods are furnished between June 6, 2021, and August 31, 2021," added the release.

Reacting to the GST Council announcements, Rajat Bose, Partner, Shardul Amarchand Mangaldas & Co., said, "Few compliance-related measures have been announced which should provide a temporary relief to small and medium tax payers. However, on overall basis, the council has failed to address major pain points of the industry and the common man resulting from the pandemic."

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