GST amnesty issues under Section 16(4) for taxpayers

The GST Act supports the free flow of input credit. It is used to allow tax-exempt transactions and remove rollover effects. Pardon is directed towards pardoning a crime or pardoning past crimes.

From the alignment with the old dictionary, pardon means “a specific period of time during which people are not punished for committing a particular crime”. Under the Cambridge Dictionary of Academic Content, Amnesty proposes “a decision by the government to pardon, not punish, persons who have committed certain unlawful acts or crimes”.

According to the Merriam-Webster Dictionary, Amnesty International reveals that “the act of an authority (such as a government) whereby pardon is granted to a large group of individuals often before trial or conviction.”

Goods and Services Tax amnesty plan

The GST amnesty scheme was first revealed to cover the period from July 2017 to September 2018. A one-time extension of the time limit has been introduced. The resident can file these returns due on or before March 31, 2019.

The CBIC implemented the GST amnesty scheme for the second time through Central Tax Notice No. 19/2021 filed on June 1, 2021. It applies to GSTR-3B returns due for the previous tax period between July 2017 and April 2021. GST amnesty policy has been implemented From June 1, 2021 to August 31, 2021.

According to the new Central Tax Notice No. 33/2021 submitted on August 29, 2021, the validity of the amnesty scheme under GST has been extended to November 30, 2021 from the previous last date of August 31, 2021. It reveals that the estimated due GSTR-3B in the period can Between July 2017 and April 2021 these returns are submitted on or before November 30, 2021 with the maximum reduced late fee.

The resident must obtain the concession upon payment of the overdue fee under the GST amnesty scheme. The maximum late fee is set at Rs 1,000 per return i.e. Rs 500 under CGST and 500 under SGST) for GSTR-3B with no tax liability except for GSTR-3B furniture.

Apart from that, the maximum late fee payable for nothing GSTR-3B is fixed at Rs 500 per return (i.e. Rs 250 under both CGST and SGST). In addition, the late fee offered for returns must be less than the two amounts listed. This is the total fee charged under law for each day of delay and the maximum late fee as written above.

GST amnesty system now with its problems

Those with tax liability who do not file a GSTR-3B did not file a waiver of interest. Just for the maximum, the late fees were eased to furnish it before August 31, 2021. Hence the government got the taxes, the late fees and the interest.

Returning a GSTR-1 was not included in the policy. There is therefore no waiver of late fees or interest for filing a GSTR 1 due for that tax period as the GSTR-3B the resident intends to file.

The original gold mine is not to accept ITC. The government generated more funds as of the Section 16(4) time limit for ITC admission.

Section 16 excerpt (4)

Section 16: ITC Terms and Eligibility

“16(4) A Registered Person shall not be entitled to an Input Tax Credit in respect of any invoice or debit note for a supply of goods or services or both after the due date for filing a return under Section 39 for the month in September following the end of the financial year to which the invoice relates or Discount notice or relevant annual return filing, whichever is earlier:

Provided that the Registered Person is entitled to an Input Tax Credit after the due date for filing a return under Section 39 for September 2018 until the due date for filing a return under said Section for March 2019 in respect of any invoice or invoice relating to this Discount Notice for a supply of goods or services or both within Fiscal Year 2017-18, the details of which have been uploaded by the supplier under subsection (1) of section 37 until the due date for submission of details in subsection (1) of said section for the month of March 2019.

In an easier way for the fiscal year, ITC can be claimed before the filing of the September GST return or the annual GST return i.e. the previous year. You only know about the annual GST return that will be filed late as they extend their time since GST is included In this case the September GST return is important.

Examples of this:

Mr. X supplies an item to Mr. Y at the price of Rs. 500/- plus 28% GST. Mr. Y supplies this item to Mr. Z at the price of Rs. 650/- plus 28% GST. Mr. Z then offers this item to the final consumer at the price of Rs. 800/- plus 28% GST. Mr. X, Mr. Y, and Mr. Z are registered persons, everyone pays tax duly and files are returned correctly and on time. Let’s see the taxes collected:

Amount in Indian Rupees:

Person Incoming supplies International Trade Center Outgoing supplies GST output Monetary Goods and Services Tax
X 500 140 140
And 500 140 650 182 42
With 650 182 800 224 42

Hence, the final sale total was “Rs. 800/- + and taxes which were Rs. 224/-. The same amount was paid in cash to the government by X, Y and Z (140 + 42 + 42 = 224). “

So the operations were carried out successfully but with an example we say that Mr. Y defaulted on taxes and now Mr. Y has made his return in the GST Amnesty scheme.

“What shall be done when Mr. Y presents his return in amnesty and the limitations of Article 16(4) is there what effect the collection of taxes:”

Amount in Indian Rupees:

Person Incoming supplies International Trade Center ITC allows Outgoing supplies GST output Monetary Goods and Services Tax
X 500 140 140
And 500 140 650 182 182
With 650 182 800 224 224

Because of Section 16(4), with the rejection of ITC, the government was given Rs. 546/- (140 + 182 + 224) as tax, associated interest and late fees.

Deploy to Rule 36(4) application and find out that “ITC GSTR-2A/2B, Mr. Z will be able to get 5/10/20% credit” above what is seen towards the GSTR-2A.


Accepting ITC under politics is the real thing. But the amnesty scheme allows for the payment of taxes due for past periods, it does not accept ITC claims in that return for the previous fiscal year. The GST amnesty should not rush the deadline to avail the ITC for that period. Thus, it does not legally allow a resident to report ITC while filing a GSTR-3B for the previous tax period. The recipient will not benefit from ITC under the GST amnesty policy.

The resident must be granted through policy benefits by allowing ITC prior periods in which the time limit lapses. The government should take note of the exceptions and correct the legitimate gap soon. This is amazing Goods and Services Tax amnesty scheme A goldmine for the government and a loss for taxpayers and businesses.

This article was taken from a reference source authored by CA Abhishek Raja Ram.

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