Notification No. 81/2020 – Central Tax Explained

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Notification No. 81/2020 – Central Tax: Seeks to notify amendment carried out in sub-section (1), (2) and (7) of section 39 vide Finance (No.2) Act, 2019.

[To be published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (ii)]

S.O.....(E).— In exercise of the powers conferred by clause (b) of sub-section (2) of section 1 of the Finance (No. 2) Act, 2019 (23 of 2019), the Central Government hereby appoints the 10^th day of November, 2020, as the date on which the provisions of section 97 of the said Act shall come into force.

(Pramod Kumar)
Director,
Government of India

📚 Frequently Asked Questions (FAQs): Notification No. 81/2020 – Central Tax

Q1: What is Notification No. 81/2020 – Central Tax about?

Answer:
Notification No. 81/2020 – Central Tax brings into effect Section 97 of the Finance (No. 2) Act, 2019, which amends Section 39(1), (2), and (7) of the CGST Act, 2017.
It modifies the legal framework for GST return filing, particularly in preparation for the QRMP Scheme and other compliance simplifications.

Q2: What is Section 39 of the CGST Act?

Answer:
Section 39 deals with the furnishing of returns under GST.
It mandates that every registered taxpayer must submit periodic returns containing details of inward and outward supplies, ITC claimed, tax payable, and tax paid.
The amendments under Notification 81/2020 simplify this process by allowing certain classes of taxpayers to file returns quarterly instead of monthly.

Q3: What does Section 97 of the Finance (No. 2) Act, 2019 introduce?

Answer:
Section 97 amends three subsections of Section 39 of the CGST Act to:
Permit different filing frequencies for different classes of taxpayers;
Allow government-notified procedures for quarterly filing; and
Streamline the timing of tax payments.
These provisions support the QRMP Scheme later introduced via Notification No. 84/2020 – Central Tax.

Q4: When did Notification No. 81/2020 come into effect?

Answer:
The notification took effect on 10th November 2020, as officially declared in the Gazette of India under S.O. (E) reference by Pramod Kumar, Director, CBIC.

Q5: What is the main impact of this notification on taxpayers?

Answer:
This notification makes way for:
✅ Quarterly filing for small taxpayers (turnover ≤ ₹5 crore).
✅ Reduced compliance frequency.
✅ Monthly payment of tax via self-assessment (Form PMT-06).
✅ Easier reconciliation between GSTR-1 and GSTR-3B.
For expert support, visit Finodha GST Compliance.

Q6: How does this notification enable the QRMP Scheme?

Answer:
Before the QRMP scheme could be operationalized, the CGST Act needed to legally allow quarterly filing with monthly payments.
Notification No. 81/2020 activates those enabling provisions (via Section 97 of the Finance Act), forming the legal foundation for Notifications 84/2020 and 85/2020 – Central Tax.

Q7: Which sections were amended by Section 97?

Answer:
Section 97 of the Finance (No. 2) Act, 2019 amends:
Section 39(1): Allows the government to prescribe different return filing frequencies.
Section 39(2): Updates filing timelines for special taxpayers (e.g., Input Service Distributors, non-resident taxpayers).
Section 39(7): Revises payment timing linked to quarterly returns.

Q8: What was the situation before this notification?

Answer:
Before this amendment, all regular taxpayers had to file GSTR-3B and GSTR-1 monthly, regardless of their turnover.
After Notification 81/2020, the legal framework now permits quarterly filing for eligible small taxpayers, simplifying compliance.

Q9: Does this notification affect composition taxpayers?

Answer:
No. Composition taxpayers file returns under Section 39(2) read with Rule 62, which is governed separately.
However, they still benefit from simplified GST processes under the broader compliance reforms.
📎 Learn about composition registration: Apply for GST Registration via Finodha.

Q10: What authority allows the government to issue this notification?

Answer:
The notification is issued under clause (b) of sub-section (2) of Section 1 of the Finance (No. 2) Act, 2019, empowering the Central Government to notify commencement dates for provisions of the Act.

Q11: Does this notification directly change any return filing forms?

Answer:
Not directly.
However, it provides the legislative backing for later notifications and rule amendments that changed filing forms such as GSTR-3B and GSTR-1 timelines (via Notification Nos. 83–85/2020).

Q12: How does this benefit small businesses in India?

Answer:
Small taxpayers with turnover ≤ ₹5 crore can:
File returns quarterly instead of monthly.
Pay tax monthly without filing forms every month.
Focus more on business operations than compliance deadlines.
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Q13: What about the ITC (Input Tax Credit) under this change?

Answer:
This amendment streamlines ITC flow by enabling quarterly returns but monthly tax reporting, preventing credit mismatches between suppliers and recipients.
It also aligns with the auto-population system in GSTR-2B.

Q14: How does this notification connect to future GST simplifications?

Answer:
It is the first step toward India’s simplified GST compliance architecture, supporting later measures such as:
QRMP Scheme,
E-invoicing integration, and
Automated reconciliation mechanisms.

Q15: How can taxpayers ensure compliance with this new framework?

Answer:
Check turnover eligibility (≤ ₹5 crore) for QRMP filing.
Opt into the scheme via GST portal before the next quarter.
File quarterly GSTR-3B and monthly payments.
Keep proper records for ITC reconciliation.
💡 Need assistance? Consult a Finodha GST Expert.

🏁 Conclusion

Notification No. 81/2020 – Central Tax marks a major step in the modernization of GST return filing by officially activating key provisions of the Finance (No. 2) Act, 2019.
It simplifies the compliance landscape for small taxpayers and lays the foundation for the QRMP Scheme, enabling efficiency and ease of doing business.

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