Under Section 128A of the CGST Act, 2017, the Government of India introduced a taxpayer-friendly GST Amnesty Scheme 2024. This program aims to alleviate legal proceedings and provide much-needed relief to businesses by exempting penalties and interest for specific disputes.
What is the GST Amnesty Scheme?
The GST Amnesty Scheme is a government program created for taxpayers to help them file their GST returns. When taxpayers take time to file their GST returns or still owe money due to unpaid compliance, they are liable to pay penalties or late fees.
Businesses get the opportunity to rectify their mistakes. This allows them to stay out of trouble and adhere to GST laws. Simply put, the GST Amnesty Scheme 2024 is a great relief the government initiated for taxpayers who have missed filing their GST returns or face issues due to compliance.
How Does the GST Amnesty Scheme Work?
The scheme is relevant to businesses that have missed out on filing their GSTR-3B returns on time for earlier periods. GSTR-3B is the monthly return to be filed by businesses under GST to report their sales and make payment of their GST liability. If a business misses this filing deadline, it can suffer significant fines or penalties.
However, with the Amnesty Scheme implemented, businesses can file their GSTR-3B returns and pay a minimized late fee. Reduction in late fees is usually applicable for returns filed for tax periods between 2017 and a specific cut-off date announced by the GST Council.
Why Does it Matter?
Picture this situation! You are a small business owner and have been so occupied in everyday operations that you hardly get time to focus on significant matters. As a result, you miss a couple of deadlines to file GST returns. These things happen! When you finally are able to take the time to file those returns, the massive late fees overwhelm you. It’s enough to give you a hard time.
Fret not! That’s where the effective role of the GST Amnesty Scheme 2024 comes into play.
Rather than paying heavy penalties, this scheme lets you clear due unpaid dues with a considerably reduced late fee. Who would not want that?
This scheme has been helping SMBs (small and medium-sized businesses) that might lack an expert and dedicated finance team to help them remain informed about the GST deadline.
Main Benefits of the GST Amnesty Scheme
1. Avoid Legal Action: If any business does not file its GST returns, it could contribute to lawful implications, such as cancellation of GST registration. The GST Amnesty Scheme 2024 gives a chance to these businesses to avoid facing stringent consequences by enabling them to file GST returns without the fear of litigation.
2. Minimized Late Fees: The late fees of delayed GST returns are cut down, making it highly affordable to file your returns late without costing a fortune.
3. Offers Financial Assistance: The scheme gives financial assistance to taxpayers struggling with late fee payments. They can reinvest the funds saved into their business, expanding or enhancing operations.
4. Re-registration: Any business with a cancelled GST registration due to non-filing can re-register under the GST Amnesty Scheme 2024.
5. Update Tax Records: With this scheme, you can effortlessly update tax records without having to pay hefty penalties. It mitigates the administrative burden on the tax authorities and taxpayers, leading to efficient operations.
6. Restoring GST Registration: For any business whose GST registration was cancelled because of non-compliance, the GST Amnesty Scheme offers a path to restore their registration by filing returns past the deadline.
7. A Fresh Start: With the GST Amnesty Scheme 2024, a business can get back on track without facing heavy fines or penalties. This signifies that once you are occupied, you can go for a fresh start to keep your GST filing updated.
Who is Eligible for Waiver of Interest and Penalty?
Section 128A(1) summarizes three categories of people who are eligible for the waiver scheme:
Individuals are obligated to pay the tax based on:
- A Show Cause Notice under Section 73(1) or a statement under 73(3).
- An order, which is issued by an Appellate Authority or Revisionary Authority, under Section 107(11) or 108(1).
- A Resolution Order under Section 73(9).
Moreover, the first condition to Section 128A(1) extends eligibility to cases where the genuine notice was issued under Section 74(1). However, the proper officer has been directed under Section 75(2) to reevaluate the tax under Section 73(1).
Main Features of the GST Amnesty Scheme
Feature | Details |
Complete Waiver of Late Fees | 100% waiver of late fees for businesses that missed filing GST returns from 2017-18 to 2019-20. |
Deadline for Payments | Payments ought to be completed by March 31st, 2025 to qualify for the late fee waiver. |
Legitimate Cases | The scheme is applicable only for legitimate cases. Taxpayers who made genuine mistakes can correct them without paying hefty fines. |
Application Deadline | Taxpayers, after clearing their dues, must apply for a waiver in late fees by June 30th, 2025. |
Importance of GST Amnesty Scheme
The GST Amnesty Scheme 2024 is vital because it supports MSMEs (Micro, Small, and Medium Enterprises) – the foundation of the Indian economy. Numerous organizations struggled with the intricacy of GST compliance, especially during its primary phase. According to the latest figures, more than 12.2 million taxpayers have registered under CST. However, there are some challenges MSMEs still face.
If a business or taxpayer files GST returns late, it would result in massive losses due to hefty penalties for organizations. With this scheme in place, the government helps enterprises abide by the law without paying for additional expenses (if any).
Wrapping Up
The Amnesty Scheme is designed to help taxpayers, such as small enterprises, who are looking to file their GST returns without delay. Moreover, this amnesty plan reduces the administrative burden of handling genuine cases. At the same time, it allows the government to minimize fines and late fees.
Frequently Asked Questions
The GST Amnesty Scheme is a great initiative by the government to reduce the compliance burden on taxpayers by providing them with a waiver or reduction in the late fee for pending GST returns. This scheme helps businesses normalize their GST compliance by paying for reduced penalties and late fines on earlier non-compliance concerns. It encourages them to pay outstanding tax dues.
Businesses or people with pending GST returns, including those who missed out on filing returns for certain tax periods, usually qualify for the GST Amnesty Scheme.
If a taxpayer cannot pay the entire GST dues (taxes, penalty, or interest) as a lump sum amount or by the due date, the taxpayer may apply with the Commissioner wanting to make payments in installments. A maximum of 24 installments can be granted, stating that the payment period might be extended for 2 years.
Eligible taxpayers can apply for a GST Amnesty Scheme by logging in to the GST portal. They should complete and file the pending returns, including GSTR-3B or GSTR-9. They can then make the required penalty as mentioned under the scheme. Kindly check the detailed instructions on the GST portal.
Depending on the pending return type and the delay period, the late fee reduction in the GST Amnesty Scheme differs. The GST Amnesty Scheme usually offers considerable reductions in late fees for certain periods. As a result, it becomes more affordable for taxpayers to pay their outstanding returns.
