Extension of due date of furnishing of Income Tax Returns and Audit Reports

Extension of due date of furnishing of Income Tax Returns and Audit Reports

In view of the challenges faced by taxpayers in meeting the statutory and regulatory compliances due to the outbreak of COVID-19, the Government brought the Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020 (“the Ordinance’) on 31st March, 2020 which, inter alia, extended various time limits. The Ordinance has since been replaced by the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act.

The Government issued a Notification on 24th June, 2020 under the Ordinance which inter alia extended the due date for all Income Tax Returns for the FY 2019-20 (AY 2020-21) to 30th November, 2020. Hence, the returns of income which were required to be filed by 31st July, 2020 and 31st October, 2020 are required to be filed by 30th November, 2020. Consequently, the date for furnishing various audit reports including tax audit report under the Income tax Act 1961 (the Act) has also been extended to 31st October, 2020.

In order to provide more time to taxpayers for furnishing of Income Tax Returns, it has been decided to further extend the due date for finishing of Income Tax Returns as under:

(A) The due date for furnishing of Income Tax Returns for the taxpayers (including their partners) who are required to get their accounts audited [for whom the due date (ie, before the extension by the said notification) as per the Act is 31st October, 2020] has been extended to 31st January, 2021

B) The due date for furnishing of Income Tax Returns for the taxpayers who are required to furnish report in respect of international/specified domestic transactions [for whom the due date (i.e. before the extension by the said notification) as per the Act is 30th November, 2020] has been extended to 31st January, 2021.

(C) The due date for furnishing of Income Tax Returns for the other taxpayers (for whom the due date (i.e before the extension by the said notification) as per the Act was 31st July, 2020] has been extended to 31st December, 2020.

Consequently, the date for furnishing of various audit reports under the Act including tax audit report and report in respect of international/specified domestic transaction has also been extended to 31st December,2020.

Further, in order to provide relief to small and middle class taxpayers, the said notification dated 24th June, 2020 had also extended the due date for payment of self-assessment tax for the taxpayers whose self assessment tax liability is up to Rs. 1 lakh. Accordingly, the due date for payment of self-assessment tax for the taxpayers who are not required to get their accounts audited was extended from 31st July, 2020 to 30th November, 2020 and for the auditable cases, this due date was extended from 31st October, 2020 to 30th November, 2020

In order to provide relief for the second time to small and middle class taxpayers in the matter of payment of self-assessment tax, the due date for payment of self-assessment tax date is hereby again being extended. Accordingly, the due date for payment of self-assessment tax for taxpayers whose self-assessment tax liability up to Rs. 1 lakh has been extended to 31st January, 2021 for the taxpayers mentioned in para 3(A) and para is 3(B) and to 31st December, 2020 for the taxpayers mentioned in para 3(C).

The necessary notification in this regard shall be issued in due course.

Extension of due dates for Annual Return and Reconciliation Statement for 2018-19

The Government has been receiving a number of representations regarding need to extend due date for filing Annual Return (FORM GSTR-9) and Reconciliation Statement (FORM GSTR-9C) for 2018-19 on the grounds that on account of the COVID-19 pandemic related lockdown and restrictions, normal operation of businesses have still not been possible in several parts of the country. It has been requested that the due dates for the same be extended beyond 31″ October 2020 to enable the businesses and auditors to comply in this regard.
2. In view of the same, on the recommendations of the GST Council, it has been decided to extend the due date for filing Annual Return (FORM GSTR-9/GSTR-9A) and Reconciliation Statement (FORM GSTR-9C) for Financial Year 2018-19 from 31″ October 2020 to 31st December, 2020. Notifications to give effect to this decision would follow.
3. It may be noted that filing of Annual Return (FORM GSTR-9/ GSTR-9A) for 2018-19 is optional for taxpayers who had aggregate turnover below Rs. 2 Crore. The filing of reconciliation Statement in FORM 9C for 2018-19 is also optional for the taxpayers having aggregate turnover upto Rs. 5 Crore.

E-Way Bill generation facility to be blocked for Taxpayers who failed to file GSTR-3B for 2 or more Tax period from Oct 15

The Central Board of Indirect Taxes and Customs ( CBIC ) has clarified that, E-Way Bill generation facility to be blocked for Taxpayers who failed to file GSTR-3B for 2 or more Tax period from Oct 15, 2020.

In terms of Rule 138 E (b) of the CGST Rules, 2017, the E Way Bill generation facility of a person is liable to be restricted, in case the person fails to file their GSTR-3B returns, for a consecutive period of two months or more.

The GST Council in its last meeting has decided that this provision will be made applicable for the taxpayers whose Aggregate Annual Turn Over (AATO, PAN based) is more than Rs 5 Crores.

Thus, if the GSTIN associated with the respective PAN (with AATO over Rs 5 Cr.) has failed to file their GSTR-3B Return for 02 or more tax periods, up to the month of tax period of August, 2020, their EWB generation facility will be blocked on the EWB Portal. Please note that the EWB generation facility for such GSTINs (whether as consignor or consignee or by transporter) will be blocked on EWB Portal after 15th October, 2020.

The CBIC also said that, To avail continuous EWB generation facility on EWB Portal, you are therefore advised to file your pending GSTR 3B returns immediately.

Decision Taken in 42nd GST Council Meeting

 

The 42nd GST Council met under the Chairmanship of Union Finance & Corporate Affairs Minister through video conferencing here today.

KEY TAKE-AWAYS

The GST Council has made the following recommendations:

1. Levy of Compensation Cess to be extended beyond the transition period of five years i.e. beyond June, 2022, for such period as may be required to meet the revenue gap. Further details to be worked out.

2. Centre is releasing compensation of ₹ 20,000 crore to States today towards loss of revenue during 2020-21 and an amount of about ₹ 25,000 crore towards IGST of 2017-18 by next week.

3. Enhancement in features of return filing:In its 39th Meeting held in March 2020, the Council had recommended an incremental approach to incorporate features of the new return system in the present familiar GSTR-1/3B scheme. With a view to further enhance Ease of Doing Business and improve the compliance experience, the Council has approved the future roadmap for return filing under GST. The approved frameworkaims to simplify return filing and further reduce the taxpayer’s compliance burden in this regard significantly, such that the timely furnishing of details of outward supplies (GSTR-1) by a taxpayer and his suppliers would –

(i) allow him to view the ITC available in his electronic credit ledger from all sources i.e. domestic supplies, imports and payments on reverse charge etc. prior to the due date for payment of tax, and

(ii) enable the system to auto-populate return (GSTR-3B)through the data filed by the taxpayer and all his suppliers.

In other words, the timely filing of GSTR-1 statement alone would be sufficient as the return in FORM GSTR-3B would get auto prepared on the common portal.

To this end the Council recommended / decided the following:

a. Due date of furnishing quarterly GSTR-1 by quarterly taxpayers to be revised to 13th of the month succeeding the quarter w.e.f. 01.1.2021;

b. Roadmap for auto-generation of GSTR-3B from GSTR-1s by:

i. Auto-population of liability from own GSTR-1 w.e.f. 01.01.2021; and

ii. Auto-population of input tax credit from suppliers’ GSTR-1s through the newly developed facility in FORM GSTR-2B for monthly filers w.e.f. 01.01.2021 and for quarterly filers w.e.f. 01.04.2021;

c. In order to ensure auto population of ITC and liability in GSTR 3B as detailed above, FORM GSTR 1 would be mandatorily required to be filed before FORM GSTR3B w.e.f. 01.04.2021.

d. The present GSTR-1/3B return filing system to be extended till 31.03.2021 and the GST laws to be amended to make the GSTR-1/3B return filing system as the default return filing system.

4. As a further step towards reducing the compliance burden particularly on the small taxpayers having aggregate annual turnover < Rs. 5 cr., the Council’s earlier recommendation of allowing filing of returns on a quarterly basis with monthly payments by such taxpayers to be implemented w.e.f. 01.01.2021.

Such quarterly taxpayers would, for the first two months of the quarter, have an option to pay 35% of the net cash tax liability of the last quarter using an auto generated challan.

5. Revised Requirement of declaring HSN for goods and SAC for services in invoices and in FORM GSTR-1w.e.f. 01.04.2021 as under:

a. HSN/SAC at 6 digits for supplies of both goods and services for taxpayers with aggregate annual turnover above Rs. 5 crores;

b. HSN/SAC at 4 digits for B2B supplies of both goods and services for taxpayers with aggregate annual turnover upto Rs. 5 crores;

c. Government to have power to notify 8 digit HSN on notified class of supplies by all taxpayers.

6. Amendment to the CGST Rules: Various amendments in the CGST Rules and FORMS have been recommended which includes provision for furnishing of Nil FORM CMP-08 through SMS.

7. Refund to be paid/disbursed in a validated bank account linked with the PAN &Aadhaar of the registrant w.e.f. 01.01.2021.

8. To encourage domestic launching of satellites particularly by young start-ups,

 

Decision Taken in 40th GST Council Meeting

The GST Council has made the following recommendations on Law & Procedures changes.

Reduction in Late Fee for past Returns:
As a measure to clean up pendency in return filing, late fee for non-furnishing FORM GSTR-3B for the tax period from July, 2017 to January, 2020 has been reduced / waived as under: –

  • NIL’ late fee if there is no tax liability;
  • Maximum late fee capped at Rs. 500/- per return if there is any tax liability.

Therefor reduced rate of late fee would apply for all the GSTR-3B returns furnished between 01.07.2020 to 30.09.2020

Further relief for small taxpayers for late filing of returns for February, March & April 2020 Tax periods:
For small taxpayers ( turnover upto Rs. 5 crore),the rate of interest for late furnishing of return for February , March & April beyond specified dates (staggered upto 6th July 2020) is reduced from 18% per annum to 9% per annum till 30.09.2020
Relief for small taxpayers for subsequent tax periods (May, June & July 2020
Due to  COVID-19 pandemic, for taxpayers having aggregate turnover upto Rs. 5 crore, further relief provided by waiver of late fees and interest if the returns in FORM GSTR-3B for the supplies effected in the months of May, June and July, 2020 are furnished by September, 2020 (staggered dates to be notified).

One time extension in period for seeking revocation of cancellation of registration:
To facilitate taxpayers who could not get their cancelled GST registrations restored in time, an opportunity is being provided for filing of application for revocation of cancellation of registration up to 30.09.2020, in all cases where registrations have been cancelled till 12.06.2020.

Certain clauses of the Finance Act, 2020 amending CGST Act 2017 and IGST Act, 2017 to be brought into force from 30.06.2020.

press release can be access at :https://pib.gov.in/PressReleasePage.aspx?PRID=1631127

Shipping Bill Errors


To claim Refund of the IGST paid on Exports, Exporter has to file correct information in the GST returns and then it gets successfully validated by the GSTN, it is thereafter transmitted electronically to the Customs system wherein the GST return data is matched with the shipping bill data. If the matching is successful, ICES processes the claim for refund and the relevant amount of IGST paid with respect to each shipping bill gets electronically credited to  the exporter’s bank account.

Matching between two data source is done at invoice level and any mismatch between two leads to following errors :

The process of refund is very easy  and automated under GST regime but one has to be very cautious while dealing with the above-mentioned error, as any mistake in getting the error rectified can lead to stuck the refund of IGST.

This response code comes when all the decided parameters like GSTIN, SB number, Invoice Number etc. match between GSTN and Customs databases.

However, it might happen that even with SB000, the SB does not appear in the refund scroll. This could be due to:

a) The exports might have been made under bond or LUT, hence not liable for refund.

b) If a shipping bill covers multiple invoices, few of the invoices might have been successfully validated with         code SB000 whereas other invoices might be stuck with any of the other errors.

c) Higher rate of Drawback has been claimed for that SB, thus making the SB ineligible for IGST refund.

d) Where the IGST claim amount is less than Rs. 1000/-


 This may occur due to a mismatch between the SB No. furnished in   GSTR-1/6A and the SB No. with customs. The possible reason for such mismatch could  be a clerical error made  by the exporter   at   the time   of    filling   of GSTR-1/6A, which  can  be    rectified by  making amendments  in  GSTR-1  by  using  Form  9A at the  GST  Common  Portal.

 


This may occur due to non filling of EGM .To get this error rectified Exporter should contact their Shipping line to to file EGM on immediate basis

 


This error occurs when GSTIN declared in the SB does not match with the GSTIN used to file the corresponding GST Returns. In this case too, the Exporter may be asked to make necessary adjustments in GSTR-1 by use of amendment Form 9A. If, however, the exporter has declared PAN instead of GSTIN in the Shipping Bill, the option to sanction the refund through officer interface shall be available, provided that the PAN given in the SB matches with the PAN of the GSTIN used to file the returns.

An undertaking may be obtained from the GST registered unit which has filed the returns that they have no objection to the refund being granted to the exporter who has filed the Shipping Bill and that they will not claim any IGST Refund for exports under that SB separately. Once satisfied, the officer may sanction the applicable IGST Refund through the Officer Interface


This error code occurs due to duplicate transmission of SB record from GSTN. The previous transmission would have already been validated with SB000 by ICES. Since these invoices are already validated, this response code may not be treated as an error. The scroll status of such SBs can be checked. If, however, the corresponding SBs are not getting scrolled out despite having SB004 response code, the reasons could be any of    those listed above for SB000 cases.


This Error occurs due to mismatch of invoice number as declared in the SB and that declared in the GSTR 1.If this error is due to typographical mistake while entering data in GSTR-1, it can be amended in Form 9A .

But if this error is in Shipping Bill then it cannot be amended . there is an another  mechanism available to rectify this error which is known as officer interface . Under this   mechanism Exporter have to submit annexure A containing the wrong invoice no. declared in SB and corresponding correct invoice no.


In case of export through ICD, if the Gateway EGM is not filed electronically or is stuck in some error, response code SB006 shall appear. It is noticed that Gateway EGM in case of many ICD’s Shipping Bills have been manually filed, which shall not suffice and the EGM shall have to be filed in ICES at the gateway port. While Custom at gateway port are pursuing this matter with Shipping lines , The Exporters are advised to approach their Shipping lines to file EGM electronically.


 

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