GST Reliefs announced in May 1, 2021 – Covid Wave 2

By  Adv. (Dr.) Gaurav Gupta

1. Reduction of Interest –

Notification no. 8/2021-Central Tax, dated 1^st of May 2021 specifies reduced interest as under:

2. Waiver of Late fees

Notification no. 9/2021-CT, dated 1^st May 2021 specifies waiver of late fees as under:

3. 
   Extension of due date of filing of Annual Return by Composition tax payer

Vide Notification no. 10/2021-Central Tax, dated 1^st May 2021, it has been provided that Form GSTR-4 can be filed upto 31^st of May 2021 which was due to be filed by 31^st March 2021.

4. Extension of time period of filing ITC 04

Vide Notification no. 11/2021-Central Tax, dated 1^st May 2021, Declaration in Form GST ITC-04 in respect of goods dispatched to a job worker or received from a job worker, during the period from 01.01.2021 to 31.03.2021, can be filed upto 31.05.2021.

5. Extension of time period for filing form GSTR 1and IFF for the Month of April 2020

Notification no. 12/2021 and Notification no. 13/2021-Central Tax, dated 1^st May 2021 – Extension is as under

6. Deferment of application of Rule 36(4) for April 2021

Notification no. 13/2021-Central Tax, dated 1^st May 2021 has amended CGST (Third Amendment) Rules, 2021 to allow availment of ITC without considering GSR 2B for the month of April 2021 by providing that Rules 36(4) [which allows restriction on availment of ITC above 105% of what is appearing in GSR 2B] for the tax period of April and May 2021 shall apply cumulatively for the two months and any adjustment shall be made in the return for the month of May 2021.

7. Extension of time for certain provision under law the time of which is falling between 15.04.2021 to 30.05.2021

1. Extension for Tax Payers
2. Where any time limit for completion or compliance of any action falls during the period between 15.04.2021 to 30.05.2021. Where completion or compliance of such action has not been made within such time then time shall be extended upto 31.05.2021

Extension available for:

• filing of any appeal, reply or application or furnishing of any report, document, return, statement or such other record, by whatever name called, under the provisions of the Acts stated above;

Extension not available for (including their respective rules):

• Compliance of Time and Value of Supply
• Requirement of Composition Supplier to opt out of Composition in case his turnover exceeds the prescribed limit
• Registration requirement within prescribed time for casual taxable person and non-resident taxable person
• Requirement to issue documents under GST like Tax invoice, self invoice, debit note, credit note etc. on undertaking transactions involving GST implications.
• Returns and late fees
• Interest
• Penalty and arrest
• Liability of partners of firm to pay tax
• Detention, search, seizure including moving trucks with improper documents etc.

1. Extension for Authorities
2. Where any time limit for completion or compliance of any action falls during the period between 15.04.2021 to 30.05.2021 and where completion or compliance of such action has not been made within such time then time shall be extended upto 31.05.2021. The list of exemptions available and not available remains same as specified above in ‘Extension for Taxpayers’.

1. If any authority has to verify and approve any registration application and such time frame falls during the period from the 1.05. 2021 to the 31.05.2021, and where completion of such action has not been made within such time, then, the time limit for completion of such action, shall be extended upto the 15.06.2021.

• In case where notice has been issued for rejection of refund claim, in full or in part and where time limit for issuance of order in terms of provision of Subsection (5), read with subsection (7) of Section 54 of CGST Act 2017 ( Sanction of Refund), the order may be passed by the officer after 15 days of receiving the reply or 31.5.2021 whichever is later.

Points to Ponder:

1. It is important to note that government has not extended the due dates but has waived interest and late fee in limited manner as provided above. Thus, the date of ITC availability for computing the limit of Rule 36(4) is not clear in present case.  Date of IFF and GSTR-1 has now been extended beyond the due date of GSTR-3B. Accordingly, the same becomes an impossible where the date of submission of GSTR-1/IFF by suppliers for the month of April 2021 is beyond the date when the buyer has to avail the ITC in his GSTR-3B. This anomaly need to be rectified.

2. While the event of completion of levy and Input Tax Credit has been deferred vide Notification No. 14/2021-CT as it does not include Section 9 and Section 16 in exclusion, however, their corresponding statements and returns has not been extended. Time for completion of event under Section 9 and Section 16 providing for completion of action for levy and ITC is extended by the Notification till 31.5.2021.

3. A person who has applied for registration under compulsory registrations since his turnover has exceeded 20 /40 Lakhs during this period, the officer has been granted extension up to 15.06.2021 to verify and grant him registration. What should he do meanwhile from his date of liability say 20.4.2021 till 15.06.2021, when the officer is given time to grant him registration.  He cannot undertake his business during this period, since his liability starts, while his credit will not be available to him till he is registered.

4. The government has not factored the impact of Hon’ble Supreme Court’s order in the suo moto case In Re Cognizance for Extension of Limitation dated 27.4.2021. Hon’ble Supreme Court order does not provide for any time limit till which the relief is extended, however, the present notification limits it to 30.5.2021.  Though, order of Hon’ble Supreme will override the notification in case of any conflict, however, it would have been better if the conflict was put to rest by incorporating requisite language in this Notification.

Some important Questions:

Ques 1:  Mr. X (a monthly GSTR 1 filer) was suffering from COVID from March 25, 2021 till April 12, 2021.  HE after recovering, filed his GSTR – 1 for March 2021 on April 20, 2021.  Does he need to pay late fees on his GSTR -1 for March 2021?

Ans:    Yes, since there is no specific extension, he is required to pay late fees on late filing of his GSTR-1.

Ques 2:  In the above case, Mr. X had to apply refund for the period March 2018-19.  The due date for filing refund lapses in March 2021.  He was not able to file the same due to his illness.

Ans:    The extension has been granted by Notification No. 14/2021-GST from April 1, 2021 till May 30, 2021.  Since the above period is not covered under the said notification, the refund claim has lapsed.  However, the taxpayer should explore challenging rejection of his application by department on grounds of limitation quoting order of Hon’ble Supreme Court in the suo moto case In Re Cognizance for Extension of Limitation dated 27.4.2021.

Ques 3:  Mr. X dies during COVID on March 29, 2021.  How will his returns shall be filed and his business be taken over by his son?

Ans:    Son of Mr. X needs to register as the authorised signatory being legal heir (to be done by placing a request to proper officer).  Also, he needs to obtain a new GST registration and takeover the existing business in this new number.  No sale, no issuance of tax invoice or any purchase can be done in the existing number.  This situation requires government attention in pandemic as registration of new number might not be possible (since extension is given to officers for approving the registration application till 15th June, 2021) and might impact many business.

Ques 4:  In the above scenario, what if the son does not want to continue and wish to sell the assets of the business?

Ans:    In such cases, the son needs to register as the authorised signatory being legal heir (to be done by placing a request to proper officer).  Then he should file for closure of business on account of death of proprietor and pay tax on closure of business under Section 29 of the CGST Act, 2019 read with Rule 44 of the CGST Rules, 2017.

[1] For Registered persons whose principal place of business is in the States of Himachal Pradesh, Punjab, Uttarakhand, Haryana, Rajasthan, Uttar Pradesh, Bihar, Sikkim, Arunachal Pradesh, Nagaland, Manipur, Mizoram, Tripura, Meghalaya, Assam, West Bengal, Jharkhand or Odisha, the Union territories of Jammu and Kashmir, Ladakh, Chandigarh or Delhi.  For rest of India, due date shall be 22^nd of subsequent month – Similar no late fees for 30 days.