Filing of Annual returns by composition taxpayers. – Negative Liability in GSTR-4
Filing of Annual returns by composition taxpayers. – Negative Liability in GSTR-4 Instances have come to notice where taxpayers are reporting negative liability appearing in their GSTR-4 Background: Since FY 2019-20, composition taxpayers has to pay the liability through Form GST CMP-08 on quarterly basis while GSTR-4 Return is required to be filed on annual basis after end of a financial year.
Reason of Negative Liability in GSTR4: The liability of the complete year is required to be declared in GSTR-4 under applicable tax rates. Taxpayers should fill up table 6 of GSTR-4 mandatorily. In case, there is no liability, the said table may be filled up with ‘0’ value. If no liability is declared in table 6, it is presumed that no liability is required to be paid, even though, taxpayer may have paid the liability through Form GST CMP-08. In such cases, liability paid through GST CMP-08 becomes excess tax paid and moves to Negative Liability Statement for utilization of same for subsequent tax period’s liability.
What the taxpayer did wrongly: Liability paid through Form GST CMP-08 is auto-populated in table 5 of the GSTR-4 for convenience of the taxpayers. Taxpayers who do not fill up table 6 of GSTR-4 i.e. no liability is declared, even though, taxpayer may have paid the liability through Form GST CMP-08; since the ‘Tax payable’ in GSTR-4 is computed after reducing the liability declared in GST CMP-08 and then auto-populated in table 5. Thus, if nothing is declared in table 6, then the negative liability entry appears in GSTR-4.
How to proceed in case of negative liability: If table 6 of GSTR-4 has not been filled due to oversight, a ticket may be raised to nullify the amount available in negative liability statement. If there is no liability to be paid during the year, the liability paid through Form GST CMP-08 shall move to negative liability statement and the same excess amount can be utilised to pay the liability of future tax periods.
Analysis
It is a welcome move that the GSTN has provided the inputs on a pro active manner. The composition scheme is opted by small taxpayers and for them cash flows are really a challenge especially in time of pandemic. It would have been really great if the law has a provision if excess cash is paid by composition taxpayers and laying in the Liability Register un utilized, the same can be claimed as refund. Similar provision is seen in Malaysian GST where the taxpayer can take refund of the ITC laying in their. though we cannot compare the provisions of other countries, we can take a cue from there and bring necessary amendments in near future. This will really help in improve in the ease of doing business.
Notification No. 16/2021 – Central Tax dated 1st June 2021
Interest on delayed payment of taxes is to be paid on the net liability, i.e., the amount debited in the cash ledger. This is a retrospective amendment.
Notification No. 17/2021 – Central Tax dated 1st June 2021
The due date for filing GSTR – 1 for the month of May 2021 has to be filed by 26th June 2021.
Notification No. 18/2021 – Central Tax dated 1st June 2021
Relaxation is given for the payment of interest for the delay in payment of taxes on account of the lockdowns. The notification is a retrospective one and effective from 18th May 2021.
Sr. No
Details/Particulars
Rate of Interest
Months
1
Taxpayers having turnover above ₹ 5 crores during the previous financial year
Reduced rate at 9% for the first 15 days and 18% if the delay is more than 15 days.
March – 21 April – 21 May – 21
2
Taxpayers having a turnover of less than ₹ 5 crores and paying taxes on a monthly basis
1st day to 15th day – 0% 16th day to 60th day – 9% 61st day onwards – 18% 1st day to 15th day – 0% 16th day to 45th day – 9% 46th day onwards – 18% 1st day to 15th day – 0% 16th day to 30th day – 9% 31st day onwards – 18%
March – 21 April – 21 May – 21
3
Taxpayers having a turnover of less than ₹ 5 crores and paying taxes on a monthly basis
1st day to 15th day – 0% 16th day to 60th day – 9% 61st day onwards – 18% 1st day to 15th day – 0% 16th day to 45th day – 9% 46th day onwards – 18% 1st day to 15th day – 0% 16th day to 30th day – 9% 31st day onwards – 18%
March – 21 April – 21 May – 21
4
Taxpayers who have opted for QRMP Scheme
1st day to 15th day – 0% 16th day to 60th day – 9% 61st day onwards – 18%
Jan-March 21 Quarter
Notification No. 19/2021 – Central Tax dated 1st June 2021
The late fee for GSTR – 3B has been reduced to taxpayers filing returns due to delays caused by the prevailing lockdowns and encouraging other taxpayers who have not filed returns from July 2017 to April 2021 with riders.
Late relaxation for the current financial year
Sr. No
Details/Particulars
Late fee waived off
Months
1
Taxpayers having turnover above ₹ 5 crores during the previous financial year
If filed within 15 days of the due date
March – 21 April – 21 May – 21
2
Taxpayers having a turnover of less than ₹ 5 crores and paying taxes quarterly
If filed within 60 days of the due date If filed within 45 days of the due date If filed within 45 days of the due date
March – 21 April – 21 May – 21
3
Taxpayers having a turnover of less than ₹ 5 crores and paying taxes on a quarterly basis
If filed within 60 days of the due date
Jan-March 21 Quarter
Late relaxation for the previous periods
Sr. No
Return Filing Period
Condition – 1
Condition – 1
Late Fee to be paid per month max
1
July 2017 to April 2021
Nil
Filed between 1st June 21 & 31st August
₹ 250*
2
July 2017 to April 2021
If Tax liability is there
Filed between 1st June 21 & 31st August
₹ 500*
*SGST * UT GST Amounts will be in addition to this amount, as this notification is only for the CGST.
Late relaxation for the future periods
The late fee waiver is provided for the future also starting from June 2021 due to the prevailing pandemic and lockdowns
Sr. No
Details/Particulars
Late Fee Maximum to be paid
1
Nil Tax liability
₹ 250*
2
Taxpayers having turnover up to ₹ 1.50 crores
₹ 1,000*
3
Taxpayers having turnover above ₹ 1.50 crores
₹ 2,500*
*SGST * UT GST Amounts will be in addition to this amount, as this notification is only for the CGST.
Notification No. 20/2021 – Central Tax dated 1st June 2021
Relaxation has been provided for the delayed filing of GSTR – 1 for small taxpayers from June 2021 onwards. This applies to the taxpayers who are filing GSTR – 1 on a quarterly basis also.
Sr. No
Details/Particulars
Late Fee Maximum to be paid
1
Nil Tax liability
₹ 250*
2
Taxpayers having turnover up to ₹ 1.50 crores
₹ 1,000*
3
Taxpayers having turnover above ₹ 1.50 crores and below ₹ 5.00 crores
₹ 2,500*
*SGST * UT GST Amounts will be in addition to this amount, as this notification is only for the CGST.
Notification No. 21/2021 – Central Tax dated 1st June 2021
Relaxation in late fees is also provided for taxpayers registered under the composition scheme.
Sr. No
Details/Particulars
Late Fee Maximum to be paid
1
Nil Tax liability
₹ 250*
2
Having tax liability to be discharged
₹ 1,000*
*SGST * UT GST Amounts will be in addition to this amount, as this notification is only for the CGST.
Notification No. 22/2021 – Central Tax dated 1st June 2021
Late fee relaxation has been provided to taxpayers registered as Tax Deductors and required to file GSTR – 7. The late has been capped at ₹ 1,000 per month for delay in return filing from June 2021 onwards.
Notification No. 23/2021 – Central Tax dated 1st June 2021
Relaxation is also provided for taxpayers falling under the category as Government Departments and Local bodies from issuing e-invoices.
Notification No. 24/2021 – Central Tax dated 1st June 2021
The time limits for the completion of compliance or any action by the tax authorities or any person which are falling between 15th April 2021 to 29th June 2021 has been extended in the following cases to 30th June 2021
a) completion of any proceeding or passing of any order or issuance of any notice, intimation, notification, sanction or approval or such other action, by whatever name called; or
b) filing any appeal, reply, or application or furnishing any report, document, return, statement, or other records, by whatever name is called.
The above extension is not applicable in the following cases
Related to Time of Supply
If the turnover of the composition taxpayer has crossed the threshold during this period
Section 25 – registration procedure
Section 27 – procedure-related to casual taxable person and the non-resident taxable person
Section 31 – Tax Invoice
Section 37 – provisions related to the filing of returns for outward supplies
Section 47 – provisions related to levy of late fee
Section 50 – provisions related to ley of interest
Section 69 – provisions related to power to arrest errant taxpayers
Section 90 – provisions related to Liability of partners of firm to pay tax
Section 122 – provisions related to penalties for certain offenses
Section 129 – provisions related to detention, seizure and release of goods and conveyance under transit
Section 39 – except for provisions related to sub-section (3), (4) and (5) related to TDS deductors, ISD and not resident taxpayers
Section 68 – provisions related to e-waybill
The time limit for completion of any action by any authority or by any person as per Rule 9 of the CGST Rules related to verification and approval of registration application, falling during the period from 1st May, 2021 to 30th June 2021, shall be extended to 15th July 2021
Notification No. 25/2021 – Central Tax dated 1st June 2021
The due date for filing of Form GSTR – 4 by composition taxpayer for the year April 2020 to March 2021 has been extended from 31st May 2021 to 31st July 2021.
Notification No. 26/2021 – Central Tax dated 1st June 2021
The due date for furnishing the declaration in FORM GST ITC-04, in respect of goods dispatched to a job worker or received from a job worker, during the period from 1st January 2021 to 31st March 2021, has been extended from 31st May 2021 to 30th June 2021.
This notification is a retrospective one and comes applicable from 31st May 2021.
Notification No. 27/2021 – Central Tax dated 1st June 2021
Taxpayers registered as a company under various provisions of the Companies Act 2013 can file returns using the Electronic Verification Code (EVC) until 31st August 2021.
Due to the ongoing pandemic and disruptions in business on account of lockdowns, relaxation has been provided while availing Input Tax Credit. Matching needs to be done on a monthly basis for the months of April 21, May 21 and June 21. It can be done cumulatively while flinging the GSTR – 3B for the month of June 2021.
Taxpayers who have opted for the Quarterly Returns and Monthly Payment (QRMP) have also been provided some relaxation for filing of Invoice Furnishing Facility (IFF) for the month of May 2021, and now it can be filed by 28th June 2021.
Notification No.1/2021 – Central Tax (Rates) dated 2nd June 2021
Sr. No
HSN Code
New Rate
Old Rate
1
9503 – Toys like tricycles, scooters, pedal cars etc. (including parts and accessories thereof) [other than electronic toys] 9503 – Toys like tricycles, scooters, pedal cars etc. (including parts and accessories thereof) [other than electronic toys] 9503 – Electronic Toys like tricycles, scooters, pedal cars etc. (including parts and accessories thereof)
2.5% 2.5% 2.5%
6% 6% 9%
2
Diethylcarbamazine
2.5%
6%
Notification No.2/2021 – Central Tax (Rates) dated 2nd June 2021
Sr. No
HSN Code
New Rate
Old Rate
1
“(ib) Maintenance, repair or overhaul services in respect of ships and other vessels, their engines and other components or parts.
2.5%
9%
Another major benefit is provided is for the landowners; now with this amendment, the landowners can utilize the input tax credit charged by the developer on the sale of apartments if sold before the issue of the occupation certificate.
Notification No.3/2021 – Central Tax (Rates) dated 2nd June 2021
The time of payment of GST by the landowner promoter shall be allowed to pay GST relating to such apartments any time before or at the time of issuance of completion certificate.
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