Through a number of Act provisions, small taxpayers are generally given preferential treatment under the GST Law.
(a) For intrastate and interstate service provision up to R 20 Lakh (R 10 Lakh for the states of Manipur, Mizoram, Nagaland, and Tripura), there is no registration need.
(a) Effective April 1, 2019, there is no need for registration for intra-state supply of commodities up to ₹ 40 Lakh (₹ 20 Lakh in the states of Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Puducherry, Sikkim, Telangana, Tripura, and Uttarakhand).
(c) There is no tax on payments made in advance for the supply of goods.
(d) A composition plan has been developed for small business owners who supply both restaurant services and commodities. According to the plan, an individual whose turnover does not exceed ₹ 1.5 Cr (₹ 75 Lakh in the states of Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, and Uttarakhand) must file an annual return and make quarterly payments.
(e) A composition strategy for service providers has been developed. A person having a turnover up to ₹ 50 lakh is required by the plan to file annual returns and make quarterly payments starting in FY 2019–20, and to pay tax equal to 6% of that turnover.
(f) Composition taxpayers are required to make quarterly tax payments. These taxpayers are exempt from the need to keep comprehensive accounts and records, and they are required to file quarterly challans and a single annual return in lieu of monthly statements and a return.
(g) Small taxpayers shall receive free accounting and billing software from GSTN.
(h) At the zonal and state levels, Grievance Redressal Committees (GRCs) have been established with CGST and SGST authorities, as well as trade and industry representatives and other GST stakeholders (such as GST practitioners and GSTN, among others). At the state and zonal levels, these committees handle complaints from taxpayers that are either specific or generic in character.
New GST and Policy Measures Aimed at the MSME Industry
(a) The Small Taxpayer QRMP Program: Beginning on January 1, 2021, small taxpayers with aggregate annual turnover up to ₹ 5 Cr will have the option to file quarterly reports rather than monthly filings under the quarterly filing and monthly payment (QRMP) system. For such taxpayers, the number of returns in a year has decreased from 24 previously to 8. Approximately 89% of taxpayers who have registered for GST are eligible for this service.
(b) The upper maximum on late fees has been adjusted to correspond with taxpayer turnover and tax liability in order to lessen the burden of late fees on smaller taxpayers.
The following late fee is capped per return for failure to furnish FORM GSTR-3B and FORM GSTR-1:
(i) The maximum late fee for taxpayers with no tax due on Form GSTR-3B or no outward supplies on Form GSTR-1 is ₹ 500 (₹ 250 CGST + ₹ 250 SGST).
(ii) For additional taxpayers:
◊ The maximum late fee for taxpayers with Aggregate Annual Turnover (AATO) of ₹ 1.5 Cr in the previous year was ₹ 2,000 (₹ 1,000 CGST + ₹ 1,000 SGST);
◊ The maximum late fee for taxpayers with Aggregate Annual Turnover (AATO) in the previous year ranging from ₹ 1.5 Cr to ₹ 5 Cr was capped at ₹ 5,000/- (₹ 2,500/- CGST + ₹ 2,500/- SGST);
◊ The maximum late fee for taxpayers with an aggregate annual turnover (AATO) of more than ₹ 5 Cr in the previous year was ₹ 10,000/- (₹ 5,000/- CGST + ₹ 5,000/- SGST).
•If there is no tax liability on the return, the late charge for composition taxpayers is limited to ₹ 500/-(₹ 250/-CGST + ₹ 250/-SGST) per return; if not, it is ₹2,000/-(₹ 1,000/-CGST + ₹ 1,000/-SGST) per return.
• The late charge for submitting Form GSTR-7 after the deadline has been lowered to ₹ 50/-per day (₹ 25/-CGST + ₹ 25/-SGST), with a maximum of ₹ 2,000/-(₹ 1,000/-CGST + ₹ 1,000/-SGST) per return.
(c) For the months of March, April, and May of 2021, the following COVID-related relaxations have been made available to smaller taxpayers with AATOs up to ₹ 5 Cr:
• Interest Decrease:
9% interest for the following 45 days, 30 days, and 15 days for the months of March 2021, April 2021, and May 2021, after the first 15 days after the tax payment deadline.
• No late fee is charged:
For tax periods ending in March 2021, there will be no late fee for 60 days for returns in FORM GSTR-3B that are submitted after the deadline. The same was excluded for 45 days in April 2021 and 30 days in May 2021, respectively.
(d) Making the Annual Return Simpler:
• By virtue of Notification No. 32/2023-Central Tax dated July 31, 2023, taxpayers with Aggregate Annual Turnover up to ₹. 2 Cr are exempt from making an annual return in FORM GSTR-9 for FY 2022–2023.
• As per Notification No. 14/2022-Central Tax dated 05.07.2022, taxpayers with Aggregate Annual Turnover up to ₹ 2 Cr are exempt from filing annual returns in FORM GSTR-9 for FY 2021–2022.
• Notification has been given of changes made to sections 35 and 44 of the CGST Act by the Finance Act of 2021. Due to the fact that taxpayers can now self-certify the reconciliation statement rather to having it approved by a chartered accountant, the compliance requirement for providing reconciliation statements in FORM GSTR-9C has been loosened. From FY 2020–21 onward, the Annual Return is subject to this modification.
• For taxpayers with aggregate annual turnover up to ₹ 2 Cr, making an annual return in Form GSTR-9 for FY 2020–21 is now optional.
• Taxpayers with an aggregate annual turnover exceeding ₹ 5 Cr are required to file the reconciliation statement in FORM GSTR-9C for the fiscal year 2020–21.
(e) Starting on July 1, 2017, interest will be charged on net cash liability. The 45th meeting of the Council decided to apply the same ruling to ineligible ITC that was obtained and used.
(f) The following changes have been made to the CGST Rules’ Rule 45(3) regarding the requirement to file FORM GST ITC-04:
• Once every six months, taxpayers whose aggregate annual revenue in the previous fiscal year exceeded ₹5 Cr are required to provide FORM ITC-04;
• Taxpayers who had an aggregate annual revenue of up to ₹ 5 Cr in the previous fiscal year are required to submit FORM ITC-04 on a yearly basis.
(e) Clarifications pertaining to exports have been released in Circulars Nos. 159 and 161, both dated September 20, 2021. This has eliminated doubt over the meaning of intermediary services’ scope and the export of services as a whole.