Corona is new; not confusion
APRIL 08, 2020
By Vijay Kumar
WE are not yet comfortable with Corona, but confusion is nothing new to us. We are used to it and know how to live with it. In spite of the horrendous corona, our sincere hardworking GST babus could overcome lockdown and created some very useful notifications, followed by a more necessary clarificatory circular.
The Central Tax Notifications, dated 03.04.2020 in brief are:
1. 30/2020: Amendment in the CGST Rules to allow taxpayers opting for the Composition Scheme for the financial year 2020-21 to file their option in FORM CMP-02 till 30th June, 2020 and to allow cumulative application of the condition in rule 36(4) for the months of February, 2020 to August, 2020 in the return for tax period of September, 2020.
2. 31/2020: A lower rate of interest of NIL for first 15 days after the due date of filing return in FORM GSTR-3B and @ 9% thereafter for those registered persons having aggregate turnover above Rs. 5 Crore and NIL rate of interest for those registered persons having aggregate turnover below Rs. 5 Crore in the preceding financial year, for the tax periods of February, 2020 to April, 2020. This lower rate of interest shall be subject to condition that due tax is paid by filing return in FORM GSTR-3B by the date(s) as specified in the Notification.
3. 32/2020: Waiver of late fee for delay in furnishing returns in FORM GSTR-3B for the tax periods of February, 2020 to April, 2020 provided the return in FORM GSTR-3B is filed by the date as specified in the Notification.
4. 33/2020: Waiver of late fee for delay in furnishing the statement of outward supplies in FORM GSTR-1 for taxpayers for the tax periods March, 2020 to May, 2020 and for quarter ending 31st March 2020 if the same are furnished on or before 30th day of June, 2020.
5. 34/2020: Extension of due date of furnishing statement, containing the details of payment of self-assessed tax in FORM GST CMP-08 for the quarter ending 31st March, 2020 till the 7th day of July, 2020 and filing FORM GSTR-4 for the financial year ending 31st March, 2020 till the 15th day of July, 2020.
6. 35/2020: Extending due date of compliance which falls during the period from the 20th day of March, 2020 to the 29th day of June, to 30th day of June.
7. 36/2020: Extends due date for furnishing FORM GSTR-3B for supply made in the month of May, 2020.
To explain these notifications, the CBIC came out with a Circular in order to ensure uniformity in the implementation of the provisions of the law across the field formations , and clarified certain issues, keeping the confusion alive, as alive as corona.
The CBIC Chairman in his weekly letter dated 6th April 2020 states,
On the GST side, as part of the GST Covid-19 relief package, seven GST notifications giving effect to the compliance-relief package announced by the Hon'ble Union Finance Minister have been issued. The package includes postponement of return filing, reduction of applicable interest rates, extending the period of SVLDRS, extending e-Way bill validity, etc. A clarification in respect of these measures announced by the Government has also been issued vide Circular No. 136/06/2020-GST , dated 03.04.2020.
See a sample from the clarifications:
- the due date for furnishing the return remains unchanged; i.e. 20th day of the month succeeding such month. The rate of interest has been notified as Nil for first 15 days from the due date, and 9 per cent per annum thereafter, for the said months.
- The reduced rate of interest is subject to the condition that the registered person must furnish the returns in FORM GSTR-3B on or before 24th day of June, 2020.
- In case the returns in FORM GSTR-3B for the said months are not furnished on or before 24th day of June, 2020 then interest at 18% per annum shall be payable from the due date of return, till the date on which the return is filed. In addition, regular late fee shall also be leviable for such delay along with liability for penalty.
Already tax experts are breaking their heads analysing these notifications and the Circular to ascertain what they mean to the taxpayers.
When the government is kind to the taxpayers during these corona times, why do they take such half measures? Should we bother so much about penalty, interest, late fee etc at this juncture? Of course, the government needs money to run the administration, but there is also a humane angle to it. Let us come out of this tragedy – we can get back to everything including penalties later.
Composition - Don't file the Return if….
Meanwhile, the GSTN has tweeted,
Normal and registered taxpayers who want to opt in for Composition in FY 2020-21 can apply in Form GST CMP02 till 30th June 2020.
The taxpayers SHOULD NOT file any GSTR-1/GSTR-3B, for any tax period of FY 2020-21, from any of the GSTIN on the associated PAN, or else they will not be able to opt in for FY 2020-21.
Form GST ITC-03 to reverse ITC for the stock in hand at the time of transition can be filed till 31st July, 2020.
Does a Normal taxpayer really exist?
GST Fake invoices in Income Tax Law
The Memorandum to the Finance Bill 2020 for clause 98, states,
In the recent past after the launch of Goods & Services Tax (GST), several cases of fraudulent input tax credit (ITC) claim have been caught by the GST authorities. In these cases, fake invoices are obtained by suppliers registered under GST to fraudulently claim ITC and reduce their GST liability. These invoices are found to be issued by racketeers who do not actually carry on any business or profession. They only issue invoices without actually supplying any goods or services. The GST shown to have been charged on such invoices is neither paid nor is intended to be paid. Such fraudulent arrangements deserve to be dealt with harsher provisions under the Act.
Therefore, it is proposed to introduce a new provision in the Act to provide for a levy of penalty on a person, if it is found during any proceeding under the Act that in the books of accounts maintained by him there is a (i) false entry or (ii) any entry relevant for computation of total income of such person has been omitted to evade tax liability. The penalty payable by such person shall be equal to the aggregate amount of false entries or omitted entry. It is also propose to provide that any other person, who causes in any manner a person to make or cause to make a false entry or omits or causes to omit any entry, shall also pay by way of penalty a sum which is equal to the aggregate amounts of such false entries or omitted entry. The false entries is proposed to include use or intention to use –
(a) forged or falsified documents such as a false invoice or, in general, a false piece of documentary evidence; or
(b) invoice in respect of supply or receipt of goods or services or both issued by the person or any other person without actual supply or receipt of such goods or services or both; or
(c) invoice in respect of supply or receipt of goods or services or both to or from a person who do not exist.
Accordingly, a new Section 271AAD has been inserted in the Income Tax Act with effect from 01.04.2020. For more details on this Section, please read the scholarly article, we carried yesterday.- Penalty under section 271AAD- Facets and Fallout.
If the GST System could have a proper invoice matching facility, this chaos could have been avoided. One day, we will have that; just wait.
KEEP YOUR DISTANCE FROM PEOPLE WHO WILL NEVER ADMIT THEY ARE WRONG AND WHO ALWAYS TRY TO MAKE YOU FEEL LIKE IT'S YOUR FAULT.
Until next week
