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Indirect Tax Newsletter – June 2021 – Regulatory Updates – GST Act – Taxation

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REGULATORY UPDATES

GST LAW

NOTICE

  • Notification n° 16/2021 – CT, of 01.06.2021. The CBIC has named 01.06.2021 from which Article 50 of the CGST Law of 2017, which imposes the payment of interest on net liabilities in cash, will come into force with retroactive effect from 01.07.20217.

  • Notification n° 17/2021 – CT, of 01.06.2021. CBIC has extended the due date for providing GSTR-1 from 2021-06-11 to 2021-06-26 for the month of May 2021.

  • Notification n° 18/2021 – CT, of 01.06.2021. The CBIC has granted relief to taxpayers with respect to interest payable on exit tax if paid after the due dates for the respective period, as shown below. It will enter into force on 18.05.2021.

* Chhattisgarh, Madhya Pradesh, Gujarat, Daman and Diu, Dadra and Nagar Haveli, Maharashtra, Karnataka, Goa, Lakshadweep, Kerala, Tamil Nadu, Pondicherry, Andaman and Nicobar Islands, Telangana and Andhra Pradesh.

** Jammu and Kashmir, Ladakh, Himachal Pradesh, Punjab, Chandigarh, Uttarakhand, Haryana, Delhi, Rajasthan, Uttar Pradesh, Bihar, Sikkim, Arunachal Pradesh, Nagaland, Manipur, Mizoram, Tripura, Meghalaya, Assam, West Bengal, Jharkhand, and Odisha

  • Notification n° 19/2021 – CT, of 01.06.2021. CBIC has streamlined late fees for taxpayers who delay filing GSTR-3Bs, as shown below. It will enter into force on 20.05.2021.

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This was a substantial reduction from the earlier cap of the total of Rs. 10,000/- per return (Rs. 5,000/- each for CGST and SGST).

Under the amnesty regime, relief is provided to taxpayers by reducing the late filing fee rate for pending filing.

At present, Section 47 provides for late fee in which the maximum ceiling for late fee is Rs. 10,000 per declaration (Rs. 5,000/- each for CGST and SGST), which has been significantly reduced for the benefit of defaulting taxpayers.

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The reduced cap on late fees only applies if pending declarations are provided between 01.06.2021 and 31.08.2021.

  • Notification n° 20/2021 – CT, of 01.06.2021. CBIC has reduced/waived the late fee for the taxpayer who is late in providing GSTR-1, as shown below. It will enter into force on 01.06.2021.

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  • Notification n° 21/2021 – CT, of 01.06.2021. CBIC has reduced/waived late fees for taxpayers who are late in providing GSTR-4s, as depicted below. It will enter into force on 01.06.2021.

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  • Notification n° 22/2021 – CT, of 01.06.2021. The CBIC has capped the maximum late fee at Rs. 2,000/- per return (Rs. 1,000 each for CGST and SGST) and reduced to Rs. 50/- per day (Rs. 25 CGST + Rs. 25 SGST) for taxpayers who are late in providing the GSTR-7. It will enter into force on 01.06.2021.

  • Notification n° 24/2021 – CT, of 01.06.2021. The CBIC has provided for the relaxation of the compliance deadline (which falls during the period from 2021.04.15 to 2021.06.29 to 2021.06.30) under the GST Act as follows:

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However, this extension of time is not applicable for compliance with the following provisions of the said law, namely: –

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Provided that where a time limit for the performance of any action by any authority or person, specified in or prescribed or notified under Rule 9 of the Central Goods and Services Tax Rules, 2017 falls during the period from 01.05.2021 to 30.06.2021 , and if the completion of this action has not been carried out within this period, the deadline for carrying out the action is extended until 15.07.2021.

Further, in cases where a notice has been issued for the rejection of a claim for reimbursement, in whole or in part and where the time limit for issuing an order under the provisions of subsection (5) , read with sub-section (7) of article 54 of the said law falls during the period from 15.04.2021 to 29.06.2021, the deadline for issuing the said order is extended to fifteen days after receipt of the response to the registrant’s notice or 30.06.2021, whichever is later.

  • Notification n° 25/2021 – CT, of 01.06.2021. CBIC has extended the due date from 04.30.2021 to 07.31.2021 for the provision of the GSTR-4 for fiscal year 2020-21. It will enter into force on 31.05.2021.

  • Notification n° 26/2021 – CT, of 01.06.2021. CBIC has extended the due date from 25.04.2021 to 30.06.2021 for the supply of ITC-04 for January-March 2021. The same will come into effect on 31.05.2021.

  • Notification n° 27/2021 – CT, of 01.06.2021. In addition to the aforementioned relief, the CBIC has provided some additional relief to taxpayers, as listed below. It will enter into force on 01.06.2021.
  1. Companies are allowed to file GSTR-3B and GSTR-1 (including IFF) using Electronic Verified Code (EVC) until 31.08.2021.

  2. Rule 36(4) of the 2017 CGST Rule limits the use of input tax credit beyond 5% of the ITC shown in Form GSTR 2A/2B. However, said restriction will not apply to the individual months of April, May and June 2021, but will apply cumulatively for the period of April, May and June 2021 and the declaration in FORM GSTR-3B for the month of June 2021 is to receive the cumulative input tax credit adjustment for those months.

  3. The registrant can provide details of outbound deliveries using the Invoice Provisioning (IFF) function for the month of May 2021 between the period 01.06.2021 to 28.06.2021.

NOTICE/INSTRUCTIONS

  • Rule 60(7) of the CGST Rules 2017 prescribes the generation of the auto-drafted statement containing the input tax credit details in FORM GSTR-2B for consideration recipients. In accordance with Rule 60(8) of the 2017 CGST Rules, FORM GSTR-2B must be made available to recipients after the GSTR-1/IFF filing deadline by suppliers. Notifications No. 12/2021-CT and 13/2021-CT, both dated 01.05.2021, extend the due date of GSTR-1 and IFF for April 2021, to 26.05.2021 and 28.05.2021, respectively .

Therefore, GSTR-2B for April 2021 will be generated on 29.05.2021, after the GSTR-1/IFF filing due date. Taxpayers who wish to file FORM GSTR-3B for April 2021 before the GSTR-2B is generated may do so on a self-assessment basis. Notification No. 13/2021-CT dated 01.05.2021 prescribes a cumulative limit under Rule 36(4) for ITCs requested in the April and May 2021 periods.

The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.

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