Recommendations
of 43rd GST Council meeting
Amnesty
Scheme to provide relief to taxpayers regarding late fee for pending returns ;
Late fee also rationalized for future tax periods
COVID-19
related medical goods including ampho B for free distribution given full
exemption from IGST upto 31.08.2021
Custom
duty exemption also given to Amphotericin B
Simplification
of Annual Return for Financial Year 2020-21
The 43rd GST
Council met under the Chairmanship of Union Finance & Corporate Affairs
Minister Smt. Nirmala Sitharaman through video conferencing here today. The
meeting was also attended by Union Minister of State for Finance &
Corporate Affairs Shri Anurag Thakur besides Finance Ministers of States &
UTs and senior officers of the Ministry of Finance & States/ UTs.
The GST Council has made
the following recommendations relating to changes in GST rates on supply of
goods and services and changes related to GST law and procedure:
COVID-19
RELIEF
· As a
COVID-19 relief measure, a number of specified COVID-19 related goods such
as medical oxygen, oxygen concentrators and other oxygen storage and
transportation equipment, certain diagnostic markers test kits and
COVID-19 vaccines, etc., have been recommended for full exemption from
IGST, even if imported on payment basis, for donating to the government or
on recommendation of state authority to any relief agency. This exemption shall
be valid upto 31.08.2021. Hitherto, IGST exemption was applicable
only when these goods were imported “free of cost” for free distribution. The
same will also be extended till 31.8.20201. It may be mentioned that these
goods are already exempted from Basic Customs duty. Further in view of
rising Black Fungus cases, the above exemption from IGST has been
extended to Amphotericin B.
Further
relief in individual item of COVID-19 after Group of Ministers (GoM) submits
report on 8th June 2021
· As
regards individual items, it was decided to constitute a Group of Ministers
(GoM) to go into the need for further relief to COVID-19 related individual
items immediately. The GOM shall give its report by 08.06.2021.
OTHER
RELIEFS ON GOODS
· To
support the LympahticFilarisis (an endemic) elimination
programme being conducted in collaboration with WHO, the GST rate on Diethylcarbamazine
(DEC) tablets has been recommended for reduction to 5% (from 12%).
· Certain
clarifications/clarificatory amendments have been recommended in relation to
GST rates. Major ones are, -
o Leviability
of IGST on repair value of goods re-imported after repairs
o GST rate of 12% to apply on parts of sprinklers/ drip irrigation systems falling under tariff heading 8424 (nozzle/laterals) to apply even if these goods are sold separately.
SERVICES
· To
clarify those services supplied to an educational institution including
anganwadi (which provide pre-school education also), by way of serving of food
including mid- day meals under any midday meals scheme, sponsored by Government
is exempt from levy of GST irrespective of funding of such supplies from
government grants or corporate donations.
· To
clarify these services provided by way of examination including entrance
examination, where fee is charged for such examinations, by
National Board of Examination (NBE), or similar Central or State Educational
Boards, and input services relating thereto are exempt from GST.
· To make
appropriate changes in the relevant notification for an explicit provision to
make it clear that land owner promoters could utilize credit of GST charged to
them by developer promoters in respect of such apartments that are subsequently
sold by the land promoter and on which GST is paid. The developer promoter shall
be allowed to pay GST relating to such apartments any time before or at the
time of issuance of completion certificate.
· To
extend the same dispensation as provided to MRO units of aviation sector to MRO
units of ships/vessels so as to provide level playing field to domestic
shipping MROs vis a vis foreign MROs and accordingly, -
· GST on
MRO services in respect of ships/vessels shall be reduced to 5% (from 18%).
· PoS of
B2B supply of MRO Services in respect of ships/ vessels would be location of
recipient of service
· To
clarify that supply of service by way of milling of wheat/paddy into
flour (fortified with minerals etc. by millers or otherwise )/rice
to Government/ local authority etc.for distribution of such
flour or rice under PDS is exempt from GST if the value of goods in such
composite supply does not exceed 25%. Otherwise, such services would
attract GST at the rate of 5% if supplied to any person registered in GST,
including a person registered for payment of TDS.
· To
clarify that GST is payable on annuity payments received as deferred
payment for construction of road. Benefit of the exemption is for such
annuities which are paid for the service by way of access to a road or a
bridge.
· To
clarify those services supplied to a Government Entity by way of construction
of a rope-way attract GST at the rate of 18%.
· To
clarify that services supplied by Govt. to its undertaking/PSU by way of
guaranteeing loans taken by such entity from banks and financial institutions
is exempt from GST.
MEASURES
FOR TRADE FACILITATION
1.
Amnesty Scheme to provide relief to taxpayers regarding late fee for pending
returns
To provide relief to the
taxpayers, late fee for non-furnishing FORM GSTR-3B for the
tax periods from July, 2017 to April, 2021 has been reduced /
waived as under: -
· late
fee capped to a maximum of Rs 500/- (Rs. 250/- each for CGST &
SGST) per return for taxpayers, who did not have any tax liability for
the said tax periods;
· late
fee capped to a maximum of Rs 1000/- (Rs. 500/- each for CGST &
SGST) per return for other taxpayers;
The reduced rate of late
fee would apply if GSTR-3B returns for these tax periods are furnished
between 01.06.2021 to 31.08.2021.
2. Rationalization
of late fee imposed under section 47 of the CGST Act
To reduce burden of late
fee on smaller taxpayers, the upper cap of late fee is being rationalized to
align late fee with tax liability/ turnover of the taxpayers, as follows:
A. The
late fee for delay in furnishing of FORM GSTR-3B and FORM
GSTR-1 to be capped, per return, as below:
(i) For taxpayers
having nil tax liability in GSTR-3B or nil outward
supplies in GSTR-1, the late fee to be capped at Rs 500 (Rs 250
CGST + Rs 250 SGST)
(ii) For other
taxpayers:
· For
taxpayers having Annual Aggregate Turnover (AATO) in preceding year upto Rs 1.5
crore, late fee to be capped to a maximum of Rs 2000 (1000 CGST+1000 SGST);
· For
taxpayers having AATO in preceding year between Rs 1.5 crore to Rs 5 crore,
late fee to be capped to a maximum of Rs 5000 (2500 CGST+2500 SGST);
· For
taxpayers having AATO in preceding year above Rs 5 crores, late fee to be
capped to a maximum of Rs 10000 (5000 CGST+5000 SGST).
B. The
late fee for delay in furnishing of FORM GSTR-4 by composition
taxpayers to be capped to Rs 500 (Rs 250 CGST + Rs 250 SGST) per return, if tax
liability is nil in the return, and Rs 2000 (Rs 1000 CGST + Rs 1000 SGST) per
return for others.
C. Late
fee payable for delayed furnishing of FORM GSTR-7 to be
reduced to Rs.50/- per day (Rs. 25 CGST + Rs 25 SGST) and to be capped to a
maximum of Rs 2000/- (Rs. 1,000 CGST + Rs 1,000 SGST) per return.
All the
above proposals to be made applicable for prospective tax
periods.
3.
COVID-19 related relief measures for taxpayers
In
addition to the relief measures already provided to the taxpayers vide the
notifications issued on 01.05.2021, the following further relaxations are being
provided to the taxpayers:
A. For
small taxpayers (aggregate turnover upto Rs. 5 crore)
a. March
& April 2021 tax periods:
· NIL
rate of interest for first 15 days from the due date of furnishing the return
in FORM GSTR-3B or filing of PMT-06 Challan,
reduced rate of 9% thereafter for further 45 days and 30 days for March,2021
and April, 2021 respectively.
· Waiver
of late fee for delay in furnishing return in FORM GSTR-3B for
the tax periods March / QE March, 2021 and April 2021 for 60
days and 45 days respectively, from the due date of furnishing FORM
GSTR-3B.
· NIL
rate of interest for first 15 days from the due date of furnishing the
statement in CMP-08 by composition dealers for QE
March 2021, and reduced rate of 9% thereafter for further 45 days.
b. For
May 2021 tax period:
· NIL
rate of interest for first 15 days from the due date of furnishing the return
in FORM GSTR-3B or filing of PMT-06 Challan,
and reduced rate of 9% thereafter for further 15 days.
· Waiver
of late fee for delay in furnishing returns in FORM GSTR-3B for
taxpayers filing monthly returns for 30 days from the due date of
furnishing FORM GSTR-3B.
B. For
large taxpayers (aggregate turnover more than Rs. 5 crore)
· A lower
rate of interest @ 9% for first 15 days after the due date of filing return
in FORM GSTR-3B for the tax period May, 2021.
· Waiver
of late fee for delay in furnishing returns in FORM GSTR-3B for
the tax period May, 2021 for 15 days from the due date of
furnishing FORM GSTR-3B.
C.
Certain other COVID-19 related relaxations to be provided, such as
· Extension of due date of
filing GSTR-1/ IFF for the month of May 2021 by 15 days.
· Extension
of due date of filing GSTR-4 for FY 2020-21 to 31.07.2021.
· Extension
of due date of filing ITC-04 for QE March 2021 to 30.06.2021.
· Cumulative
application of rule 36(4) for availing ITC
for tax periods April, May and June, 2021 in the return for the period
June, 2021.
· Allowing
filing of returns by companies using Electronic Verification Code (EVC),
instead of Digital Signature Certificate (DSC) till 31.08.2021.
D.
Relaxations under section 168A of the CGST Act
Time limit for completion
of various actions, by any authority or by any person, under the GST Act, which
falls during the period from 15th April, 2021 to 29th June,
2021, to be extended upto 30th June, 2021,
subject to some exceptions.
[Wherever
the timelines for actions have been extended by the Hon’ble Supreme Court, the
same would apply]
4. Simplification
of Annual Return for Financial Year 2020-21
· Amendments
in section 35 and 44 of CGST Act made through Finance Act, 2021 to be
notified. This would ease the compliance requirement in
furnishing reconciliation statement in FORM GSTR-9C, as taxpayers
would be able to self-certify the reconciliation statement,
instead of getting it certified by chartered accountants. This change will
apply for Annual Return for FY 2020-21.
· The
filing of annual return in FORM GSTR-9 / 9A for FY 2020-21 to
be optional for taxpayers having aggregate annual turnover upto Rs 2 Crore;
· The
reconciliation statement in FORM GSTR-9C for the FY 2020-21
will be required to be filed by taxpayers with annual aggregate turnover above
Rs 5 Crore.
5.
Retrospective amendment in section 50 of the CGST Act with effect from
01.07.2017, providing for payment of interest on net cash basis, to be notified
at the earliest.
OTHER
MEASURES
GST Council recommended
amendments in certain provisions of the Act so as to make the present system of GSTR-1/3B return
filing as the default return filing system in GST.
Note: The recommendations of the GST Council have been presented in this release in simple language for information of all stakeholders. The same would be given effect through relevant Circulars/Notifications which alone shall have the force of law.
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