GST Update- 39th Council Meeting

The 39th GST Council meeting has been concluded on 14th March 2020 in New Delhi in the chairmanship of Union finance minister Nirmala Sitharaman and other panel ministers to discuss some important issues faced by the taxpayers.

The meeting focused on smoothening the roll out of the new return system and ensured the transition to the new return system is made in an incremental manner.

In an attempt to address the difficulties faced by the trade and industry and to ensure uniformity in the implementation of the provisions of the law across field formations, the council has recommended below points-

Changes related to GST Rate

Changes related to Laws and Procedure

1) Extension of GSTR 3B and GSTR 1

Continuation of existing system of furnishing FORM GSTR-1 & FORM GSTR-3B till September, 2020.

New GST Return forms were introduced causing a lot of hardship as the taxpayers were already facing problems in the existing GST Portal. Now New Returns would be applicable from 1st Oct 2020 onwards.

2) E-invoicing

Date of implementation of e-invoicing and QR Code to be extended to 01.10.2020

3) Annual Returns and Reconciliation Statement

Due date for annual return in FORM GSTR-9 and reconciliation statement in FORM GSTR-9C for FY 2018-19 to be extended to 30.06.2020 (earlier date was 31.03.2020).

4) Threshold Limit for GST Audit

Relaxation for filing of GSTR-9C (Reconciliation Statement) for the FY 2018-19 up to aggregate turnover of Rs. 5 crores. Earlier Limit was Rs. 2 Crore so now most of the MSME would be out of the preview of the audit.

5) New GSTR-1 filing dates
-Turnover more than Rs 1.5 cr -to file before 10th of the following month
-Turnover up to Rs 1.5 cr -to file before 13th of the following month
-The GSTR-2A can be generated on 14th of following month

6) Late Fees Waiver

No Late fees for delayed filing of the Annual return for financial year 2017-18 and 2018-19 for taxpayers with aggregate turnover less than Rs. 2 crores. This is a relief for the Tax papers as earlier penalties for the delay were there.

7) Related to Interest Liability

Interest for delay in payment of GST (delay in filing of GSTR 3B) to be charged on the net cash tax liability (only on the portion which is paid in cash) w.e.f. 01.07.2017 (Law to be amended retrospectively).

8) GSTR-1 for 2019-20 will be waived for certain taxpayers who could not opt for the special composition scheme (notification No. 2/2019-Central Tax (Rate) dated 7th March 2019) by filing Form CMP-02.

9) Due Date Extension GSTR-3B

Extension of due dates for FORM GSTR-3B for the month of July, 2019 to January, 2020 till 24th March, 2020 for registered persons having principal place of business in the Union territory of Ladakh. Also, a similar extension is recommended for Form GSTR-1 and Form GSTR-7.

10) Revocation of Cancelled GST Number

Where GST registrations have been cancelled till 14.03.2020, application for revocation of cancellation of registration can be filled up to 30.06.2020 (extension of period of application as one-time measure to facilitate those who want to conduct business).

11) KYS Scheme

A new facility called ‘Know Your Supplier’ to be introduced so as to enable every registered person to have some basic information about the suppliers with whom they conduct or propose to conduct business

12) Bunching of refund claims allowed across financial years to facilitate exporters

13) Prevention of fake invoicing

To curb fake invoicing and fraudulent passing of ITC, restrictions to be imposed on passing of the ITC in case of new GST registrations, before physical verification of premises and Financial KYC of the registered person

14) Exemptions Under IGST

Present IGST and cess exemptions on the imports made under the AA/EPCG/EOU schemes will continue up to 31st March 2021.

15) Amendment to the CGST Rules

-Procedure for reversal of ITC in respect of capital goods partly used for affecting taxable supplies and partly for exempt supplies under rule 43 (1) (c);

-Ceiling to be fixed for the value of the export supply for the purpose of calculation of refund on zero rated supplies;

-to allow for refund to be sanctioned in both cash and credit in case of excess payment of tax;

-to provide for recovery of refund on export of goods where export proceeds are not realized within the time prescribed under FEMA; and

-to operationalize Aadhaar authentication for new taxpayers

16) A special procedure will be prescribed for registered persons who are corporate debtors under the provisions of the Insolvency and Bankruptcy Code, 2016 to enable them to comply with the provisions of GST Law during the CIRP period.

17) Deferment of E – Wallet Scheme:

Time to finalize e – wallet scheme will be extended upto 31st March, 2021

18) Issuance of Circulars in respect of the following:

-Clarification in apportionment of ITC in cases of business reorganization u/s 18 (3) of CGST Act, 2017 read with Rule 41 (1) of CGST Rules, 2017;

-Appeals during non – constitution of Appellate Tribunal;

-Clarification of refund related issues;

-Clarification on special procedure for registered persons who are corporate debtors under the provisions of the Insolvency and Bankruptcy Code, 2016.

To remove glitches from the GST system, Nandan Nilekani, on behalf of Infosys, made a presentation addressing the system-related issues that are being faced by the taxpayers in the GST system.

The Council gave a go-ahead for the deployment of additional manpower (60 in number) on T&M basis and assured that both on procurement of additional hardware and hiring of manpower, expeditious approvals would be given however the return filing experience of the taxpayers and removal of technical glitches needs to be carried out urgently.

The GST Council expects these initiatives to be implemented by the 31st of July, 2020.