The Council's impactful recommendations included waiver of interest and penalty on demand notices issued for FY 2017-18, 2018-19, and 2019-20. This relief, applicable to taxpayers who discharge the full tax amount by March 31, 2025, alleviates the financial burden, particularly for those grappling with initial GST implementation complexities. It's important to note that this benefit excludes cases where interest and penalty have already been paid.
Another crucial decision addressed the long-standing challenge of Input Tax Credit (ITC) leading to multiple notices and mismatches. The Council extended the time limit for claiming ITC through GSTR 3B returns filed up to November 30, 2021, for FY 2017-18 to 2020-21. This retrospective relief, effective from July 1, 2017, aims to significantly benefit taxpayers who faced difficulties claiming ITC within the prescribed timelines. By facilitating trade and reducing litigation, this move is a welcome step forward.
To streamline dispute resolution and make it more manageable, the Council recommended monetary limits for government litigation. These limits are set at ₹20 lakh for the GST Appellate Tribunal, ₹1 crore for High Courts, and ₹ 2 crore for the Supreme Court. It's important to understand that taxpayers can still pursue appeals beyond these limits. For instance, if a taxpayer prevails before the Commissioner (Appeals), the government can appeal to the Tribunal only if the matter exceeds the ₹20 lakh limit.
Furthermore, the pre-deposit amount required for filing appeals before the Appellate Authority has been reduced from ₹25 crore each (CGST and SGST) to ₹20 crore each. Additionally, the percentage of pre-deposit for appeals to the Tribunal has been reduced from 20% (capped at ₹50 crore each) to 10% (capped at ₹20 crore each). This financially relieves taxpayers involved in legal proceedings. It's important to note that this amendment applies only to future cases, and no refund is available for those who have already paid pre-deposits exceeding the new limits. The filing of appeals before the Tribunal will commence on a date notified by the government, with a three-month window for taxpayers to file.
The introduction of GSTR 1A is a noteworthy development. This new functionality allows taxpayers to report transactions missed or not reported in their GSTR 1 for the current tax period. This facilitates reporting such transactions before filing GSTR 3B for the current period. It's crucial to remember that this form is not applicable for previous tax periods.
The Council also announced an extension in the deadline for filing GSTR 4 from April 30 to June 30, applicable for FY 2024-25. Additionally, biometric verification via Aadhaar authentication for taxpayers who have opted for it will be implemented nationwide in a phased manner.
