GST Amnesty Scheme 2025: Meaning & Benefits

Everyone liable to pay or file their GST returns must do so by complying with all rules and deadlines. In the case of GST, one must file it in a sequential manner.If the deadline for the same passes, then a taxpayer may have to pay penalties for missing their filings. Moreover, a long gap in GST filing may also result in the GST registration getting cancelled.To provide relief from such consequences, the government gives the benefit of the GST Amnesty Scheme, which allows taxpayers to file their pending GST returns without hefty penalties. For 2022, the government has brought back the GST Amnesty Scheme to account for missed filings due to the prolonged Covid-19 pandemic.

• The deadline to make corrections and amends in GSTR-3B and to claim missed Input Tax Credit is no longer the end of September of the following year. It was moved to the 30th November of the following year.
• This scheme was first introduced to provide relief to taxpayers who failed to file their returns between July 2017 and September 2018.
• The pending GST returns could be filed with no or lower late penalty fees and interest. This allowed taxpayers to clear their pending dues without paying hefty interest.
• Due to the Covid-19 pandemic in 2021, taxpayers requested the government to bring back the GST Amnesty Scheme for 2021.
• The government again introduced it for 2021.
• Similarly, the government has extended the GST Amnesty Scheme for 2022 for the same reasons.

GST Amnesty Scheme 2022Validity

The GST Amnesty Scheme for the year 2022 has been put forth from 1st April 2022 to 30th September 2022. This means that taxpayers with pending filings in this period can enjoy the benefits.

GST compliance is necessary in order to avoid the consequences of not filing GST returns. Previously, if taxpayers failed to file their returns on time, then they could face the following:

• Taxpayers weren't allowed to file for the latter GSTR-3B if any previous GSTR-3B was pending. Once the previous filings were cleared, only then the latest GST could be filed.
• When such older returns were filed, heavy late penalties and interest were charged. This became one of the reasons why such taxpayers refrained from clearing their older returns.
• Moreover, if the taxpayers haven’t filed their GSTR-3B for three consecutive quarters or six consecutive months, then their GST registration was cancelled. This affected their business heavily since customers wouldn’t want to do business with vendors not registered under GST.

The GST Amnesty Scheme can be handy in such situations. It’s an opportunity for taxpayers to clear pending filings without paying heavy charges. The main benefits of the GST Amnesty Scheme 2022 are as follows:

• Taxpayers who couldn’t file their GSTR-3B because of the Covid-19 pandemic can now do so without incurring heavy penalties.
• Those GST registrations that were cancelled due to non-filing of returns stand to be re-registered due to the amnesty scheme.
• The compromised economy and effects of the lockdown can somewhat be mitigated by the GST Amnesty Scheme, which provides relief to businesses with regards to late GSTR-3B filing. Small businesses, especially, stand to gain the most.
• The taxpayers who refrained from clearing pending returns can now do so without being charged heavy interest.

Any taxpayer that falls under the following criteria is eligible for the GST Amnesty Scheme 2022:

1. Every individual registered under the GST Act of 2017 is eligible for the GST Amnesty Scheme.
2. Any taxpayer that has missed their GST filing for previous years is eligible.
3. Any GST registered taxpayer whose registration has been cancelled due to non-filing.
4. Any other taxpayers as informed by the government may also be eligible and the government can notify regarding the same as and when required.

Last Date for the GST Amnesty Scheme 2022

The last date of this scheme is 30th September.

The GST Amnesty Scheme for 2022 allows waiving all arrears in cases where arrears are Rs. 10,000 or less. Dealers with arrears of Rs. 10 lakhs or less as of 1st April 2022 are allowed to pay 20% of total arrears as a lump sum amount instead of calculating the same with interest and penalty. The remaining 80% arrears in such cases would be waived off.

Businesses, especially smaller ones, have been affected heavily because of the Covid-19 pandemic. To have to pay heavy penalties on account of late GST filings could have been very difficult for them. Hence, the GST Amnesty scheme is a welcome relief for such businesses since they can clear their previously pending filings without the burden of high penalties.

The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.