Union finance minister Nirmala Sitharaman said on Friday no late fees will be levied on registered entities with zero GST (Goods and Services Tax) return filing and who have not filed their returns between July 2017 and January 2020.

Amid a massive impact on tax revenues due to the coronavirus-induced lockdown which began in March-end, Finance Minister Nirmala Sitharaman today chaired the 40th GST Council meeting via video conferencing. This was the first meeting of the GST Council during the lockdown in which the impact of Covid-19 on revenue collection was also discussed.

“For the period from July 2017 to January 2020, which is prior to the COVID period, a lot of return filing has been pending. For all those who have no tax liabilities but who have not filed their returns between July 2017 to January 2020 there will be zero late fees,” she said Nirmala Sitharaman.

“For those who have a tax liability, a maximum late fee for non-filing of GSTR-3B returns for period July 2017 to January 2020 has been capped to Rs 500. This will apply to all returns submitted during July 1, 2020, to September 30, 2020,” Sitharaman said.

Small taxpayers whose aggregate turnover is up to ₹ 5 crores will be provided a waiver of late fees and interest if they file the form GSTR-3B for the supplies affected in months of May, June and July 2020, by September 2020, no late fee or interest: Sitharaman

Small taxpayers will have to pay no interest for late furnishing of GST returns till July 6, 2020; after that, the interest rate has been reduced to 9%, this will be valid till September 30, 2020: FM

They can file returns for May to July till September 2020 and no late fee will be charged, she added.

The decisions were taken during the 40th GST council meeting over video conferencing for the first time after the lockdown clamped to prevent the spread of the coronavirus disease (Covid-19).

FM also says discussion on taxing pan masala will hopefully be taken up at GST Council’s next regular meeting.

On the issue of compensation requirements of states, Sitharaman said a special one-agenda meeting will happen in July to discuss compensation.