Complete Information about GST Amnesty Scheme

In a notice titled 'No. 53/2023- CENTRAL TAX' published on 2 November 2023, the CBIC stated that only a specific group of taxpayers may utilise this GST Amnesty scheme to appeal against a GST tax demand order. The designated taxpayers are as follows:

1. Individuals who were unable to file an appeal against the GST demand order issued by the GST proper officer by 31 March 2023.
2. If an appeal made against the GST demand order earlier was rejected only because it was submitted after the deadline had passed.

Benefits of the amnesty scheme are available for a GST demand order issued on or before 31 March 2023. Therefore, even in the case of a GST demand order for the financial year 2018–19, amnesty benefits may be obtained.

The GST Amnesty Scheme is only available to the GST demand orders that were issued under Sections 73 or 74 on or before 31 March 2023. Therefore, taxpayers must carefully review the demand order. This implies that individuals cannot appeal against GST orders issued under various sections such as refund rejection and cancellation of GST registration.

How to Obtain Benefits from GST Amnesty Scheme

Firstly, the GST Department sends a show-cause notice to the taxpayer regarding the GST demand. The specific reason why the department issued a GST demand show cause notice is also disclosed in the same.

Upon receipt of this notice, the taxpayer has two options: either agree with it and pay the GST demand along with interest, or object and send a response to the department. Following the taxpayer's response, the GST Department will call a hearing so that the taxpayer's concerns can be discussed.

Following the hearing, if the GST Department finds that the GST demand is valid and rejects the taxpayer's response, they will issue an order. This is a GST demand order, and under the amnesty scheme, an appeal may be filed in response to it.

Process to File GST Amnesty Form

GST Form APL-01 must be used to file an appeal under the GST Amnesty Scheme against the GST tax demand order. According to sub-section (1) of Section 107 of the aforementioned Act, the concerned person must file an appeal against the said order in FORM GST APL-01 by no later than 31 January 2024, as stated by the CBIC in the notification. For the purpose of filing an appeal under the GST Amnesty Scheme, only this form is needed.

A taxpayer has to do the following in order to file the GST APL-01 form under the amnesty scheme. A taxpayer must determine whether a tax notice is entirely or partially inaccurate after receiving it.

In case the taxpayer does not agree with the GST demand notice, they should deposit 12.5% of the disputed amount with the GST department. The disputed amount must not be more than Rs.25 crore. At least 20% of the amount should be deposited using an 'Electronic Cash Ledger.'

GST Amnesty Scheme 2021

The income tax department has announced GST penalty waiver at a period from July 2017 to September 2019. During that time, a one-time extension of the time restriction was granted. Taxpayers can file their outstanding taxes on or before 31 March 2019. With the onset of COVID 19 pandemic, various key market players and tax experts urged the government to reinstate the GST amnesty plan for a couple of months in the first phase of pandemic. The government has accepted their request. 

On 1 June 2021, CBIC has again come up with the GST late fee waiver. The new GST late fee waiver applies to all outstanding GST-3B returns for tax span from July 2017 to April 2021.

Validity of the Amnesty Scheme for GST

As per the recent Central Tax notice number 33/2021 published on the 29 August 2021, the GST amnesty program was extended till 30 November 2021. This means that the taxpayers who have pending GSTR-3B returns between July 2017 and April 2021 can file the GST returns on or before 30 November 2021 at a lower maximum late charge.

Earlier as the CBIC’s latest Central Tax notice number 19/2021 published on 1 June 2021, the GST amnesty plan was applied from 1 June 2021 to 31 August 2021. For tax years beginning in July 2017 and ending in April 2021, any taxpayer who fails to submit GSTR-3B by the due dates may do so via the GST site by that date.

Challenges that Come Under the GST Amnesty Scheme

Although the goal of the GST Amnesty scheme is to provide relief to non filers who want to continue the business operations by disclosing the GST data correctly, it is not without challenges. Given below are the common problems associated with GST Amnesty Scheme:

No Relief for Late GSTR-1 filing under the scheme

As the scheme is not applicable to the GSTR-1 return, there is no relief or waiver of late fee for pending GSTR-1 filing for the same tax period because the taxpayer wants to file a GSTR-3B.

No Relaxation on Interest Due

The taxpayers who have tax liabilities and did not submit GSTR-3B will not get interest relief. However, the late charge will be waiver for submitting before 31 August 2021.

Revocation of Cancelled GST Registration

The CBIC released a press release and Central Tax Notification Number 34/2021 on August 29, 2021. In accordance with this, the deadline for requesting the restoration of a GSTIN that was cancelled between 1 March 2020, and 31 August 2021 owing to the failure to file GSTR-3B [Section 29(2) clauses (b) and (c) of the CGST Act] has been extended to 30 September 2021.

There is no explanation till 29 August about GSTINs which have been terminated earlier due to non filing of previous GSTR-3B reports about how and when they would be restored and revoked when the taxpayer has appealed.

Non-Admissibility of Input Tax Credit

Tax specialists are concerned about the admissibility of ITC under this system. Despite allowing unpaid taxes from earlier periods, the amnesty plan says nothing about ITC claims made on the same return for the prior fiscal year. The deadline for submitting ITC claims is outlined in the CGST Act. The earlier of two deadlines must be met in order to collect the ITC on a tax invoice or debit note that was issued within the fiscal year.