GST Update: Government waives penalty on late returns for July
Bringing much-needed relief, the Center, on the recommendations of the GST Council, has decided to not impose the fine of Rs. 200 per day on those who haven't been able to file their GST returns within the deadline. Note: This relaxation is only in place for July. However, the interest burden on late payment of dues remains in place. Here's more about it.
One has to pay the interest
July GST returns were to be filed by August 25. Now, in a tweet, Finance Ministry said, "Late fee for all taxpayers who could not file GSTR-3B for the month of July has been waived, but not the interest on late payment of dues. Interest will be applicable to all taxpayers who have not discharged their complete GST liability for July by August 25."
Whom does this help?
Those who failed to meet the August 25 deadline, will have to cough up a penalty of Rs. 200 per day until they file it, Jaitley had said earlier. According to estimates, 5.95 million taxpayers should've ideally filed their GST returns. However, on August 29 it was seen that only 3.83 million have complied. It means, 2.1 million taxpayers had to pay this penalty.
Rectifying mistakes
Moreover, according to a recent circular issued by the Finance Ministry, people, who have made errors while filing their first GST returns, will be given the chance to rectify it at the time of filing GSTR-1 and GSTR-2 forms for the month of July. GSTR-1 for July has to be filed between September 1 and 5 and GSTR-2, between September 6 and 10.
Balancing tax liability
Center will reconcile these forms, check for mismatches and correct under or excess-reporting accordingly. This corrected data would reflect on GSTR-3. GSTR-3 for July will have to be filed between September 11 and 15. If there's an additional tax liability for July, the taxpayer has to submit that payment with interest. Reduction in liability would make the excess input tax credit getting carried forward.
