STATE TAX BEARING

## Policy Analysis Report: Amendment to Delhi Goods and Services Tax Act, 2017 **1. Executive Summary:** This report analyzes a notification issued by the Government of the National Capital Territory of Delhi, representing an amendment to the Delhi Goods and Services Tax (DGST) Act, 2017. The amendment, effective from April 20, 2021, pertains to the waiver of late fees for filing FORM GSTR-3B for specific tax periods (March-April 2021 and January-March 2021) based on the taxpayer's aggregate turnover in the preceding financial year. The core purpose of this amendment is to provide relief to registered persons by waiving late fees for delayed filing of returns, subject to certain conditions related to turnover and timelines. This report details the specific provisions of the amendment, the affected taxpayers, and the expected impact of these changes. **2. Introduction:** The purpose of this report is to provide a detailed analysis of the notification issued by the Government of the National Capital Territory of Delhi regarding amendments to the Delhi Goods and Services Tax (DGST) Act, 2017. The analysis is based solely on the provided policy text and aims to inform stakeholders about the specifics of this amendment. **3. Policy Overview:** * **Original Policy:** Delhi Goods and Services Tax Act, 2017 * **Core Objective(s):** From the provided text, the core objective of this amendment is to provide relief to certain classes of registered taxpayers by waiving late fees associated with the delayed filing of FORM GSTR-3B returns. This implies a broader objective of facilitating compliance and potentially addressing challenges faced by businesses in meeting filing deadlines. **4. Background and Rationale:** This is an amendment to the DGST Act. The amendment appears to address potential difficulties faced by taxpayers in meeting the deadlines for filing GSTR-3B returns, particularly in the context of the COVID-19 pandemic or other economic disruptions that may have impacted business operations. By waiving late fees for specific periods and turnover categories, the amendment aims to alleviate the financial burden on businesses and encourage timely compliance in the long run. **5. Key Provisions / Changes:** This notification introduces a new proviso after the seventh proviso in the original notification No. 762018 State Tax, dated the 3rd Sept, 2019. The *new* rule is the waiver of late fees under Section 47 of the DGST Act for specific categories of registered persons who fail to furnish their GSTR-3B returns by the due date for specified tax periods. The changes are detailed in the following table (extracted from the policy text): | S. No. | Class of Registered Persons | Tax Period | Period for which late fee waived | | :----- | :------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | :--------------- | :----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | | 1. | Taxpayers having an aggregate turnover of more than rupees 5 crores in the preceding financial year | March, 2021 and April, 2021 | Fifteen days from the due date of furnishing return | | 2. | Taxpayers having an aggregate turnover of up to rupees 5 crores in the preceding financial year who are liable to furnish the return as specified under subsection 1 of section 39 | March, 2021 and April, 2021 | Thirty days from the due date of furnishing return | | 3. | Taxpayers having an aggregate turnover of up to rupees 5 crores in the preceding financial year who are liable to furnish the return as specified under proviso to sub section 1 of section 39 | January-March, 2021 | Thirty days from the due date of furnishing return | *Effect of this Change:* The amendment offers a conditional waiver of late fees for delayed GSTR-3B filings, differentiated based on the taxpayer's turnover and the tax period in question. Taxpayers with higher turnovers receive a shorter waiver period, while those with lower turnovers receive a longer period. **6. Target Audience and Stakeholders:** The primary target audience includes registered persons under the DGST Act who are required to file GSTR-3B returns. Specifically, the amendment directly affects taxpayers with an aggregate turnover of up to or more than Rupees 5 crores in the preceding financial year. The stakeholders also include the Department of Finance Expenditure of the Government of National Capital Territory of Delhi, and tax professionals assisting businesses with GST compliance. **7. Implementation Aspects (Inferred):** * **Responsible agency/bodies:** The Department of Finance Expenditure of the Government of National Capital Territory of Delhi is responsible for implementing and overseeing this amendment. * **Timelines:** The amendment is deemed to have come into effect on April 20, 2021. The waiver of late fees is applicable for specific periods in March and April 2021, as detailed in the table above. The periods for which late fee is waived are tied to due dates of filing the GSTR-3B return, but that specific due date is not mentioned in this text, so assumed to be defined elsewhere. * **Specific to the changes:** The implementation relies on the existing GST filing system, with the amendment providing specific conditions for automatic or manual waivers of late fees upon filing the GSTR-3B return within the extended timelines. **8. Expected Outcomes / Impact of Changes:** The intended outcome of this amendment is to reduce the financial burden on eligible taxpayers who may have faced difficulties in filing GSTR-3B returns on time. This amendment could lead to increased compliance and reduced litigation. **9. Conclusion:** The amendment to the Delhi Goods and Services Tax Act, 2017, provides a conditional waiver of late fees for GSTR-3B filings for specific taxpayers. This amendment provides financial relief and seeks to facilitate compliance.

Key Entities Referenced