The Central Board of Indirect Taxes and Customs has issued a notification dated 26th of May, 2022 stating that businesses registered under composition scheme that couldn’t file their annual return (GSTR-4) for the previous financial year will be exempted from the late fees for two months. The due date of filing GSTR-4 for financial year 2021-22 was 30th of April, 2022. As per the notification, businesses registered under the composition scheme will not have to pay the late fee till 30th June, 2022 for filing of their annual form GSTR-4 for the financial year 2021-22.
Under the GST law, the businessmen have to pay a late fee of Rs. 50 per day if they fail to file their return form GSTR-4 on time. If the businesses have zero tax liability, a maximum late fee of Rs 500 is levied. In other cases, the maximum late fee of Rs.2, 000 is payable. But as CBIC has allowed exemptions, businessmen don’t have to pay the late fee for May and June month this year.
Those businesses whose annual turnover is less than Rs 1.5 crore are eligible for the composition scheme. This limit for the some northern & eastern state is Rs 75 lakh. Under this scheme, small businesses don’t need to raise their tax invoices, instead, they can pay only 1% of their GST tax amount. However, this limit is 5 percent for the restaurant owners, while it is 6 percent for service providers under composition scheme.
In general, the maximum limit for adopting the GST composition scheme is 1.5 crores, while this limit is Rs 75 lakhs for the states of Northeast. Further, this limit is only 50 lakhs for the businesses associated with service providers. However, other businesses which are not associated with service sectors can take advantage of the composition scheme by including 10 % of the total amount received from the service sector in their other businesses.
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