Relief Measures for Taxpayers Announced Under GST Law Due to Severity of COVID Wave

Posted by Written by Naina Bhardwaj Reading Time: 3 minutes

India’s GST taxpayers have been granted some relief in meeting regulatory and statutory compliances as a brutal COVID-19 wave grips the country.

As the second wave of the COVID-19 pandemic grips the country, the government has taken cognizance of the various challenges faced by taxpayers in meeting the statutory and regulatory compliances under the Goods and Services Tax (GST) law.

The government announced various relief measures to the taxpayers via several notifications dated May 01, 2021. These measures are explained below. 

Reduction in rate of interest

Concessional rates of interest in place of the normal rate of interest of 18 percent per annum for late tax payments have been prescribed in the following cases.

  • For registered persons having aggregate turnover above INR 50 million (US$0.68 million)

A lower rate of interest of nine percent for the first 15 days from the due date of payment of tax and 18 percent subsequently, for the tax payable for tax periods March 2021 and April 2021, payable in April 2021 and May 2021, respectively, has been notified.

  • For registered persons having aggregate turnover up to INR 50 million

Nil rate of interest for the first 15 days from the due date of payment of tax, nine percent for the next 15 days, and 18 percent afterwards, for both normal taxpayers and those under Quarterly Return Filing and Monthly Payment of Taxes (QRMP) scheme, for the tax payable for the periods March 2021 and April 2021, payable in April 2021 and May 2021, respectively, has been notified.

  • For registered persons who have opted to pay tax under the Composition scheme

NIL rate of interest for first 15 days from the due date of payment of tax and nine percent for the next 15 days, and 18 percent subsequently, has been notified for the tax payable for the quarter ending March 31, 2021, payable in April 2021. 

Waiver of late fee

  • For registered persons having aggregate turnover above INR 50 Million

Late fee has been waived off for a period of 15 days for returns in FORM GSTR-3B furnished beyond the due date for tax periods March, 2021 and April, 2021, due in the April 2021 and May 2021, respectively.

  • For registered persons having aggregate turnover up to INR 50 Million

Late fee has been waived for 30 days for the returns in FORM GSTR-3B furnished beyond the due date for tax periods March, 2021 and April, 2021 (for taxpayers filing monthly returns) due in April 2021 and May 2021, respectively / and for period January-March, 2021 (for taxpayers filing quarterly returns under QRMP scheme) due in April 2021.

Extension of due date of filing GSTR-1, Invoice Furnishing Facility (IFF), GSTR-4 and ITC-04 

  • IFF and FORM GSTR-1: The deadline which was earlier due for the month of April (due in May) has been extended by 15 days.
  • FORM GSTR-4: The due date for FY 2020-21 has been extended from April 30, 2021 to May 31, 2021.
  • FORM ITC-04: The due date for furnishing the ITC-04 for the quarter January-March, 2021 has been extended from April 25, 2021 to May 31, 2021. 

Amendments in CGST Rules

  • Relaxation in availment of Input Tax Credit: Rule 36(4), that is, 105 percent cap on availment of ITC in FORM GSTR-3B is to be applicable on cumulative basis for period April and May 2021 and must be applied in the return for tax period May 2021. Otherwise, Rule 36(4) is applicable for each tax period.
  • The filing of GSTR-3B and GSTR-1/ IFF by companies using electronic verification code has already been enabled for the period from April 27, 2021 to May 31, 2021. 

Extension in statutory time limits under Section 168A of the CGST Act

Time limit for completion of various actions by any authority or by any person, under the GST Act, which falls during the period from April 15, 2021 to May 30, 2021, has been extended up to May 31, 2021, subject to certain exceptions as specified in the notification. These actions include issuance of any notice or intimation, filing of any appeal, reply or application or furnishing of any report, document, return, statement, or such other record.


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