GST Amnesty Scheme
According to the Ministry of Finance, between February and October 2020, the Government collected GST revenue amounting to Rs. 1.05 lakh crores. The figure is around 10% higher than what was collected last year, around the same time.
Regardless, several MSMEs still struggle to file GST every year, and as a result, they end up paying a hefty late fine. The Government has launched the GST Amnesty Scheme to grant some relief to the small businesses. To become a beneficiary under this scheme, businesses must be familiar with its vital aspects and plan their approach accordingly.
What Is GST Amnesty Scheme?
GST Amnesty Scheme is an arrangement that extends a one-time exemption to businesses, who did not file for GST returns that grants relief from paying a late fee and similar penalties.
Reports state that around 25 lakh businesses are yet to file for GST returns, and an average 10% of total assessees have never filed any from the time the regime was introduced. Typically, the non-filers do not make any valuable contributions, and furthermore, they increase the burden of the tax system.
So, to lower the burden on both businesses and the GST council, the Government introduced this scheme. One may alternatively consider this scheme to be a GST late fine waiver facility.
Eligibility Of GST Amnesty Scheme:
Assessees who merged from previous laws will be considered eligible for this scheme. However, those who have applied for new GST registration post- 1 July 2017 will not be eligible to enjoy the benefits extended.
Things To Know About GST Amnesty Scheme:
To make the most of this scheme, individuals need to know the following –
- MSMEs must pay Rs. 50 each day if they miss out on filing GST on the exact day. The Government usually initiates an amnesty scheme to boost tax law compliance.
- The scheme comes in handy for those SMEs who have not filed GST in many years and have accumulated a substantial late fee.
- More than 1 lakh businesses declared their tax dues under this scheme and have benefited from it to a great extent. To elaborate, companies declared dues accounting to Rs. 79968 crore, which reduced by as much as Rs. 40000 crore under this scheme.
There are times when the taxpayers find it difficult to manage their immediate cash flow or operational activities after meeting their tax penalties. In that case, they can avail our invoice discounting service via our online portal.
- At KredX, you will able to access funds within 24 hours to 72 hours*.
- By uploading your unpaid invoices on our portal, you can raise immediate funds to meet your working capital needs successfully.
Benefits Of GST Amnesty Scheme:
These pointers below elucidate the GST Amnesty scheme benefits in brief –
- It helps to lower the compliance cost of registration holders.
- The scheme proves effective in lowering the burgeoning pressure on the GST network.
- Above all, it encourages tax compliance.
Limitations Of GST Amnesty Scheme:
Few major limitations of this scheme includes –
- The timing of the scheme.
- Immunity against penal allegations and repercussions.
- The promise of not initiating investigation against participants.
To maximise benefits resulting from tax amnesty schemes, taxpayers should make it a point to find out about other relevant schemes as well. For instance, schemes like Vivad se Vishwas and GST Composition Scheme can come in handy for tax-paying businesses.
Vivad Se Vishwas Scheme – In A Nutshell:
This scheme was announced in budget 2020 as a No Dispute but Trust Scheme. In general sense, taxpayers can enter into this scheme in case of – disputed TDS, tax or TCS. Alternatively, if there is no such dispute related to taxes, taxpayers can still opt for this scheme to account for pending disputes regarding interest, fees, and penalty.
The primary objective of the scheme is to release pending direct tax disputes. The noteworthy purpose of this scheme is as follows –
- To lower pending litigations.
- To generate revenue.
- Helps to avail relief from pending tax disputes by filing taxes.
- Facilitates the process of receiving waiver through the payment of interest and penalty.
- Above all helps to avoid prosecution.
You must note that this scheme accompanies several exclusions and requires one to follow a series of steps to file declaration. So, individuals who wish to avail this scheme must find out all about these aspects in due advance.
Over the years, the facility to declare and resolve tax disputes online has helped taxpayers to a great extent. It has aided them to keep the entire process simple and streamline the GST Amnesty Scheme and other initiatives accordingly. It has further enabled them to track the status of their tax filing, comparatively in an easier manner.
Likewise, you can simplify the process of availing funds to a great extent by opting for our integrated working capital and growth capital-based solutions. Get in touch with us at KredX and streamline your working capital needs smoothly!
FAQs on GST Amnety Scheme:
A. The GSTR-1 amnesty scheme due date was extended to 17 January 2020.
A. It is a scheme initiated by the Government that aims to eliminate disputes related to direct taxes. Individuals can apply for this scheme by visiting the official e-portal of the Income Tax Department and subsequently submitting the DTVSV form.
A. The GST late fine is computed keeping in mind - late fine for both GSTR-9 and GSTR-9A is Rs.200 each day, which can go up to a maximum of 0.25% for CGST, plus 0.25% for SGST of the turnover.
A. This scheme is directed towards small taxpayers. It proves useful in eliminating cumbersome GST formalities; it also facilitates paying GST at a fixed rate of a business’s turnover. Usually, this scheme is availed by taxpayers with a turnover of less than Rs. 1.5 crore.
A. When taxpayers fail to file GSTR-1 by the extended due date, it leads to the blockage of e-way bills. Subsequently, they have to pay Rs. 50 each day for the total number of days delayed to as much as Rs. 10000/statement as late fine.
A. Although they are both financing options leveraged by an asset, there is an important distinction worthy of mentioning. With regard to bill factoring, the investor or the finance company owns the sales ledger. In this case, the investor holds the responsibility of collecting the due invoices from the customer. However, in bill discounting, the company itself bears the right to make the collection.
A. Yes, factoring includes bill discounting, but the customer knows that the invoices have been factored. The provider assumes the responsibility of handling sales ledger
A. The bills discounting calculation sheet preparation process differs from one financial institution to another. Please check with your lender before you discount your bills.
A. Treasury bills refer to Government Issued aids as a promissory note with guaranteed repayment due on a later date. They have a longer tenure compared to bill discounting. In the bill discounting procedure, the interest amount is charged by the bank from buyers and is to be paid at the end of the credit tenure.
A. Yes, bill discounting is an excellent option for your business as long as you exercise strong credit control procedures and maintain low debts.
A. In the simplest terms, bill discounting is a form of invoice discounting. You can sell unpaid bills to a financial institution to receive cash advances against a percentage of the bill value.