GST Amnesty Scheme Update

Last Updated at: Mar 25, 2021
GST registration

A Bilaspur-based trader Satyakam Arya had made a plea to the Supreme Court to extend the Amnesty Scheme to give more time for the MSMEs and small businesses to file their returns. The Supreme Court rejected the plea, stating that the Amnesty Scheme was a policy decision and that SC didn’t have the power to direct the government or GST Council in that regard.

What Is the Amnesty Scheme

The GST system came into practice back in 2017 and the Finance Ministry noted that, even by 2020, many businesses have ignored it and have remained non-compliant. The government wanted these businesses to register under GST and, to do so, they introduced the Amnesty Scheme.

For people who were liable but haven’t filed returns on time, the late fees pile up. Through the Amnesty Scheme, this late fee was waived to a large extent. So, the people who were earlier hesitant to file for GST could now register and file returns without worrying about the humongous late fees or penalties. 

The following are the specifics of the Amnesty Scheme:

  • From 25 July 2020 to 30 September 2020, people were given a one-time waiver on the late fees for people who were registered but didn’t file returns between July 2017 to July 2020.
  • For taxpayers who filed NIL returns i.e. no tax liability, the late fees were completely waived. 
  • For others, the late fees were capped off at Rs. 250 per Act (i.e. Rs. 250 for CGST and Rs. 250 for SGST). Any late fees above that were waived.
  • This waiver applied to those people who filed their returns before 30 September 2020. Anybody who files after that will be liable to be the normal amount of late fees.

get GST registration  

The Plea

In 2020, the country was hit by a pandemic and the economy took a great hit. All the trade activities except for essentials were suspended and it forced many businesses to shut down. MSMEs had it particularly hard as they usually depend on regular transactions for survival.GST registration


So, many MSME owners found it hard to even pay their actual liabilities let alone late fees. When the government introduced the Amnesty Scheme, it was an opportunity for people to pay off their pending liabilities without paying any late fee. But the scheme was introduced at a time where the businesses were struggling to make ends meet. 

There were many requests from the people to extend the Amnesty Scheme so that they too can benefit from it. However, the government did not extend it. So, a Bilaspur-based trader Satyakam Arya pleaded to the Supreme Court seeking an extension of the scheme

He argued that as the livelihood of many traders is at stake in the issue, the Supreme Court should intervene and direct the government and the GST Council to extend the scheme. He pointed out that there were shut down of businesses during the pandemic. And that the late fees of Rs.50 per day for MSMEs was too much. 

Supreme Court Decision

The Supreme Court heard the plea and rejected it. It pointed out that the Amnesty Scheme was a matter of policy decision and had nothing to do with fundamental rights. The scheme itself was introduced as an intervention to help reduce the burden of people. This is for who have to file GST returns. The government has full authority over the realm of policymaking and the court cannot intervene until it affects the fundamental rights of the people. So, there would be no relief under Article 32 for the said plea.

GST can often be confusing like this. To avoid such confusions you can file your GST returns with Vakilsearch. Our experts do GST filing for hundreds of businesses every day. They are up to date with new schemes and developments in it. Once you sign up with Vakilsearch, you don’t have to bother about following up on GST news because we do it for you.