December 26, 2022

GST Amnesty Scheme

The Goods and Services Tax (GST) has a lot of plans to benefit the taxpayers in India. One such plan is the amnesty scheme that focuses on helping taxpayers who do not file their returns on time. An individual registered under the GST law has to file the returns even when the returns are NIL. The returns can be submitted either under the normal proposal or the composite one. The GST amnesty scheme was brought into action by the government to provide relief to those taxpayers who missed submitting GSTR-3B for former tax periods. At times, the taxpayer is not able to file a return due to some genuine reasons, and hence this scheme can help those individuals. Let's read more about this program!

Beginning of The GST Amnesty Scheme

The GST amnesty scheme was first declared to cover the time from July 2017 to September 2018. A one-time extension was also provided where taxpayers could file the pending returns on or before 31st March 2019. With the start of Covid 19 in 2020, many tax professionals and industry leaders demanded the government reopen the amnesty program. The government accepted the request and reopened the scheme.

It was again implemented through a notification by CBIC dated June 2021. It focuses on all those taxpayers who have pending GSTR-3B returns of previous tax duration between July 2017 and April 2021.

Validity of the GST Amnesty Scheme

According to the latest Central Tax notification number declared on 29th August 2021, the validity of the GST amnesty scheme stands expanded up to 30th November 2021 from the former deadline of 31st August 2021. It indicates that those registered taxpayers who missed filing for GSTR-3B between July 2017 and April 2021 can file their returns on or before 30th November 2021 with a decreased maximum late fee.

A notification regarding the scheme was released in June 2021. CBIC and the Goods and Services Tax council decided to follow the recommendation in the 43rd meeting for this policy design in 2021. Some of the highlights from this are as below:

1. The amount of reduced maximum late fee as declared by CBIC is:

a. For taxpayers with zero return for CGST and SGST, the highest amount of late payment per return for the GSTR-3B to be filed for the prior period is Rs. 250 each.

b. For other taxpayers, the highest payable late fee per return for filing GSTR-3B is Rs 500 each for central goods and services tax and state goods and services tax.

2. The taxpayers registered as Companies can also file the returns opting for EVC signatures up to 31st August 2021.

3. Taxpayers can claim input tax credit even if it does not appear in GSTR-2B.

Benefits of the Amnesty Scheme in 2021

Earlier, when the taxpayers did not file the returns on time, they faced heavy penalties and cancellation of their GST registration. With the introduction of the amnesty scheme 2021, taxpayers have benefitted in the following ways:

1. The taxpayers who have missed the filing of their returns due to various genuine reasons created because of the coronavirus can now submit their returns without any heavy penalty burden.

2. The Goods and Services Tax registration that stood canceled due to the non-filing of the return can now be revoked.

3. The return filing mechanism can be streamlined for various taxpayers.

4. The GST amnesty scheme also helps taxpayers restore their business after being harshly affected by Covid lockdowns and weak economic circumstances due to the pandemic.

5. The tax collected through such programs helps in maintaining the public services for the masses.

6. The additional tax is further put into growth projects to develop the country.

Challenges to the Amnesty Scheme 2021

Although this scheme has proved fruitful to the taxpayers, still, it also comes with a lot of challenges for the system. Let's have a look at the challenges against the proper functioning of the GST amnesty system:

1. Individuals who have a tax liability and failed to file GSTR-3B are not allowed any relaxation in interest dues. Only the maximum late fee is waived for filing it before 31st August 2021.

2. The system stays silent on the claim of the input tax credit. It is a concern that has been raised by many taxpayers, as they have a significant amount to be claimed under the input tax credit.

3. It does not cover the filing of GSTR-1. As such, there is no late fee waiver for GSTR-1 filing.


Undoubtedly, the GST amnesty scheme is a generous gesture by the government to help and motivate the taxpayers for filing their pending returns, facilitate their business growth, and focus on the economic development of the country. While it also comes with some challenges, these can be tackled by expanding the scope of this program and allowing provisions for claiming the input tax credit.


Read More: E-way bills, IRN how to generate, GSTR-1 JSON file.


Merchant Export Scheme for Exporters after changes in GST Rate
Synthetic Organic Tanning Substances - GST Rates & HSN Code 3202
Vinegar - GST Rates HSN Code 2209