Industry Suggested Amendments in GST Amnesty Scheme To Make it More Effective

The GST Council has notified Amnesty scheme to provide relief and a final opportunity to small taxpayers regarding the late fee for pending GSTR 3B from July 2017 to April 2021. This scheme was to remain valid from June 1, 2021 to August 31, 2021.

1. By Notification No 34 it has been further modified that the time limit for making an application of revocation of cancellation of registration under sub-section (1) of section 30 of the said Act falls during the period from the 1st day of March 2020 to 31st day of August 2021, the time limit for making such application shall be extended up to the 30th day of September 2021.
2. The modified Notification ignores the taxpayers who could not file returns from July 2017 to February 2020. Thus, the modification is not in line with the intention of the Amnesty scheme to provide relief from July 2017.
3. Necessary ROD orders may be issued u/s 172 of CGST Act, 2017, or any other alternative legislative measure may be taken as GST council deems fit, to provide relaxation on the 90 day time restriction as laced in section 30 of CGST Act,2017 as applicable on submission of application for revocation of cancelled registration.
4. Consequent enabling changes to be made in the GST portal to allow submission of applications for revocation of cancellation later than 90 days from service of order of cancellation.
5. Further, the proper officer may be instructed to dispose of the revocation of cancelled registration to be approved in a very quick time-bound manner to enable the taxpayers to file their subsequent returns too with reduced late filing fees as per the Amnesty scheme.
6. To allow ITC in Latest Amnesty Scheme:  In latest amnesty scheme, registered person has been allowed to file pending returns in GSTR-3B for the tax periods from July,2017 to April, 2021 by 31st Aug, 2021 by paying the tax due along with interest and with concessional late fee. Further, under the scheme, the registered person can’t claim ITC due to restrictions in section 16(4) of CGST Act, 2017 which results in double taxation. 

Calling the latest GST Amnesty Scheme -a half-hearted attempt to help small entrepreneurs, "It is an incomplete package and does not provide relief to small tax payers," says IIA in an official note. However, IIA also suggested a few points to be added in the Amnesty Scheme which can make the scheme more meaningful and effective.

• Waiver Of Late Fee and Interest: With true spirit of an Amnesty scheme and provide relief to small tax payers the late fee and interest should be totally exempt.
• Last Date of for Revocation be extended to December 2021 instead of September, 2021  : To provide relief to small tax payers, who due to the pandemic have lost substantial business will need time to generate cash for payment. If sufficient time is not provided the spirit of the Amnesty scheme will be lost and the actual benefit intended will not be achieved.
• Composition Scheme: After Revocation the taxpayers should be entitled for Composition Scheme if they are eligible, for which necessary notification should be issued immediately.