Compliance Deadlines for Composition Taxpayers Relaxed

Ruchi Gandhi

10 Jul, 2020

Lately, the government had announced several relief measures aimed at catering to the needs of taxpayers affected by the countrywide lockdown in this pandemic situation. The Central Board of Indirect Taxes and Customs (CBIC) also issued a set of notifications concerning extensions to the due date.

If you are a composition taxpayer and are worried about your GST compliances amidst the Covid-19 situation, then this article will help you deliver information on some compliance deadlines being relaxed by the Government.

In this article, we are going to talk about some of the announcements made by the Government to facilitate the observance of GST rules by composition taxpayers. Moreover, if you are a normal taxpayer and are willing to opt for composition scheme this year, but have not been able to do so till now, some important relaxations in compliance deadlines are provided for them as well.

Compliance Deadlines for Composition Taxpayers

Relaxations announced by the Government: CMP-08

It is well known that the composition taxpayers are required to file a quarterly statement in Form GST CMP-08. A composition dealer must use Form CMP-08 to report the descriptions or summary of his / her self-assessed tax payable for a given quarter. It acts as a special statement-cum-challan.

Let us understand the relaxations given to the composition taxpayers with respect to CMP-08 filing. One can file the GST CMP-08 for the quarter ending March 2020 on or before 7^th July 2020 without any liability to pay interest.

• Penalty and Interest for filing CMP-08 after 7^th July:

As Form GST CMP-08 is not a return, no late fee is payable even if the filing is delayed beyond 7^th July 2020. However, interest will be payable @ 18% from 8^th July 2020 till the date of filing, i.e., if Form GST CMP-08 is filed after 7^th July 2020.

• Interest computation:

It should be noted here that as interest is not computed by the system in Form GST CMP-08, one needs to calculate the interest on their own and pay to the Government.

• The due date for filing GST CMP-08 for April-June Quarter:

Further, it should be penned down that there is no change in the date for filing of Statement in Form GST CMP-08 for the quarter of April-June, 2020, which is 18^th July 2020. This means that one has to file the CMP-08 for the April-June quarter by the extant due date which is 18^th July 2020.

Relaxations announced by the Government: GSTR-04

It is provided under GST law that the composition taxpayers are required to file their yearly return in GSTR-04. In comparison to a normal taxpayer who needs to furnish 3 monthly returns, a dealer who opts for the composition scheme is expected to furnish only 1 return which is GSTR-04 once a year by April 30^th, following a financial year.

Let us understand the relaxations given to the composition taxpayers with respect to GSTR-04 filing. One can file the annual return for the financial year 2019-20 in Form GSTR-04, on or before 15^th July 2020, without attracting any late fee or interest thereon.

• Penalty and Interest for filing GSTR-04 after 15^th July:

However, late fee and interest will be payable from 16^th July 2020 till the actual date of filing of the return, in case it is filed after 15^th July 2020.

Compliance Deadlines for Normal Taxpayers opting for Composition

It is commonly known that normal taxpayers can opt for composition scheme by the filing of Form CMP-02. So, here also let us see the relaxations proclaimed by the Government for the normal taxpayers opting for composition scheme.

• Opting for Composition scheme for FY 2020-21:

If a dealer wants to opt for a GST composition scheme, they need to intimate the government about it. One can opt for the composition scheme for the financial year 2020-21 by filing his or her option in Form GST CMP-02 till 30^th June 2020, instead of the earlier date of 31^st March 2020.

Here, a taxpayer is required to keep in mind that he should not file any GSTR-1/GSTR-3B for any tax period of the financial year 2020-21, for any GSTIN on the associated PAN, or else he will not be able to apply for composition scheme for the FY 2020-21. The option will become effective from 1^st April 2020.

• Filing of ITC-03:

Since a taxpayer shifting from normal tax regime to composition tax scheme would breach the ‘GST and input tax’ chain, he cannot avail any ITC. However, if he has already claimed an ITC on goods lying in his stock as on the date immediately preceding the FY from which composition scheme is applicable, he needs to reverse such ITC and intimate via filing form ITC-03. Let us understand the relaxations given to the composition taxpayers with respect to the filing of ITC-03.

If a taxpayer opts for the composition scheme for the financial year 2020-21, he can now file for reversal of input tax credit, by the filing of Form GST ITC-03 till 31^st July 2020, instead of the earlier date of 30^th May 2020.

Summary of Relaxations