GST Amnesty Scheme – Is There A “Catch” To Be Catch Hold Of?


From the inception of the F.Y. 2020-21, the Indian economy has suffered a downfall owing to the damage caused by the Corona pandemic. The majority of the sectors were hit hard due to the suspension of business activities for a longer duration, but the SME & MSME sectors were the worst hit by the pandemic as they found it difficult to meet their day-to-day business expenditure.

The taxpayers were even caught up in their thoughts on how to comply with the return filing process and paying off their dues to the government. The taxpayers were unable to file their returns due to nationwide lockdown, shortage of manpower & funds, etc. This led to an increase in the interest liability & late fees being levied on the unfiled returns which added to the woes of the taxpayers.

The government provided a much sought-after relief to the taxpayers by introducing an Amnesty Scheme in the year 2020 to provide an opportunity to the taxpayers to pay their pending liabilities with relaxation in the late fees. The scheme covered the period from July 2017 to January 2020 which further got extended to July 2020. The scheme aimed at providing a gateway to small and medium taxpayers, who were willing to file their pending returns but due to heavy late fees being piled up over time, they started dodging it. During the current second wave of the Corona pandemic taxpayers expected the scheme to be re-introduced for taxpayers which have pending returns to be filed.

The 43rd GST council meeting proposed to re-introduce the Amnesty Scheme for the period July 2017 to April 2021 on similar lines as it was introduced in the last year. This will provide an opportunity for the taxpayers to file their pending returns for the said period with reduced late fees. A 3-months bracket has been provided to taxpayers beginning from 01-06-2021 till 31-08-2021 to furnish their GSTR-3B returns for availing the benefit under this scheme.

But is there anything for the taxpayers to cheer about the re-introduced Amnesty Scheme, let’s make a comparative analysis?

Comparative Analysis of Amnesty Scheme




Max. Late Fees (CGST + SGST Both Included)

Max. Late Fees (CGST + SGST Both Included)

Taxpayers having Nil Tax Liability



Others                     1,000                        500

From the above table, it can be seen that the government has increased the quantum of late fees in the current Amnesty Scheme. Further, there were certain other expectations from the GST council meeting which remained unsatisfied that have been mentioned below.

  • Allowing ITC for the period Jul-17 to Mar-18, F.Y. 18-19 & F.Y. 19-20 to set off from the output liability of respective months while filing GSTR-3B.
  • Reduction in interest rate for late payment of the liability.
  • Clarity whether the bona fide taxpayers who have paid the late fees according to the applicable law at the time of filing, whether they will get the refund of such late fees paid.
  • Applicability of Amnesty Scheme restricted to GSTR-3B only and not for other returns like GSTR-1, GSTR-4, GSTR-10, etc.


Furthermore, from the tax period of June 2021# onwards the government has rationalized the late fees applicable under Section 47 of CGST Act, 2017 vide various notifications. A summarized view of the said rationalization has been presented in the table mentioned below.

* AATO in PFY means Annual Aggregate Turnover in Preceding Financial Year

# Reduction in late fees for delayed filing of GSTR-4 applicable from F.Y. 2021-22 onwards

^ Late fees of Rs. 25 per day each under CGST & SGST Acts for the period of delay

Author’s Enlightenment

The taxpayers should file their returns cautiously keeping in mind the below-mentioned points:

  • Filing the return within the dates specified (i.e., between 01-06-2021 to 31-08-2021) for availing the benefits of the Amnesty Scheme.
  • There is a reduction of late fees only, the interest rate for delayed payment of output liability remains the same. So, kindly ensure to deposit the same with the correct interest rates applicable.
  • Taxpayers should further ensure that they don’t avail ITC for the period July 2017 to March 2020 as the limitation period for availing the ITC for the said period has already expired. In case the taxpayers avail the ITC and set off the same against their output liabilities then they must better prepare themselves for a notice from the department.

This content is meant for information only and should not be considered as an advice or legal opinion, or otherwise. AKGVG & Associates does not intend to advertise its services through this.

Posted by:

CA Tarun Kapoor

AKGVG & Associates


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