Key Changes Made in the 31st GST Council Meeting

Overview of 31st GST Council Meeting

The 31st GST Council Meeting was held in New Delhi on 22nd December, 2018. This meeting was chaired by Arun Jaitley, the Finance Minister of India. The changes made in the meeting will be implemented from 1st January, 2019.

1.  Due Dates:

• The due date for filing annual return forms GSTR-9, GSTR-9A, and GSTR-9C for the Financial Year 2017-18 has been extended till 30th June, 2019.
• The due date for filing GSTR-8 by e-commerce operators for October, November and December of 2018 has been extended till 31st January, 2019.
• The due date for submitting GST ITC-04 form for July 2017 to December 2018 has been extended till 31st March, 2019.
• Due date for filing Form GST REG-26 has been extended till 31st January, 2019 for those who did not file it completely but received a provisional ID till 31st December, 2017 for furnishing the required details to the jurisdictional officer.
• The due date for filing forms GSTR-1 and GSTR-3B for July 2017 to February 2019 or quarters of July 2017 to December 2018 has been extended till 31st March, 2019.
• Late fee for filing forms GSTR-1, GSTR-3B, and GSTR-4 for July 2017 to September 2018 after 22nd December, 2018 will be completely waived if the forms are filed till 31st March, 2019.

2.  Format Changes in Return Filing:

• Heading in forms GSTR-9 and GSTR-9A will be changed from ‘as declared in returns filed during the year’ to ‘made during the year’.
• Returns in forms GSTR-1 and GSTR-3B must be filed before filing returns in forms GSTR-9 and GSTR-9C.
• Returns in forms GSTR-4 must be filed before filing returns in form GSTR-9A.
• For inward supplies, the HSN code may be declared when the supply’s independent value is equal to 10% of the total value of inward supplies.
• Any additional payments can be completed through the form GST DRC-03 in cash only.
• ITC cannot be availed through the forms GSTR-9 and GSTR-9C.
• All invoices of previous year which were reported in form GSTR-1 will be auto-populated under Table-8A of form GSTR-9.
• Value of ‘no supply’ will be included in value of ‘non-GST supply’ and reported under Tables 5D, 5E, and 5F in form GSTR-9.
• Verification by the taxpayer uploading the reconciliation statement will be included in form GSTR-9C.

3.  Refunds:

• Documents relevant to RFD-01A form will be uploaded electronically at the time of filing the refund application through the GST common portal. The need for submission of physical copies will be eliminated.
• Form RFD-01A will be filed for refunds relating to assessment, provisional assessment, appeal, other orders, excess tax payment, tax paid on intrastate supply which is held to be interstate supply subsequently and vice versa, and any other refunds made.

4.  Input Tax Credit (ITC):

• The Input Tax Credit (ITC) for invoices of previous Financial Year have been allowed till 31st March, 2019, under specified conditions.
• Clarifications will be issued on refund related matters such as refund of ITC accumulated in inverted duty structure, refunds disbursal within stipulated time, allowed time for availing ITC on invoices, refund of ITC accumulated in compensation cess, etc.

5.  E-Way Bill:

• Those taxpayers who have not filed GST for two consecutive taxable periods will not be allowed to generate e-way bills.

6.  Tax Rate Rationalization:

• Many items from the 28% tax slab were brought down to 18% and 5%rates. These included gearboxes, tyres, digital and video cameras, lithium batteries, video game consoles, etc.
• Apart from auto-parts and cement, only luxury items including guns and arms will be charged at 28% tax rate.
• Only few goods and services will be charged at a tax rate of 18% or more.
• Some items which were being taxed at 12% have been brought down to 5% or 0% rate, and some which were taxed at 5% have been reduced to a nil tax rate.
• The services provided by banks under the Pradhan Mantri Jan Dhan Yojana (PMJDY) to Basic Savings Bank Deposit (BSBD) account holders will be exempted from GST.
• Air travel of pilgrims by non-scheduled/chartered operations facilitated by the government under bilateral arrangements for religious purposes will attract a GST of 5% with Input Tax Credit (ITC). Manufacture of renewable energy devices will also be charged at 5% GST.

7.  Formation of Group of Ministers (GoM):

• GoM will include 7 members and will be assisted by findings shared by committee of experts from Central Government, State Government, and the National Institute of Public Finance and Planning (NIPFP).
• GoM will focus on issues related to revenue trends by analyzing reason why structural patterns have affected revenue collection in some states.
• GoM will decide the threshold for exemption of MSMEs from GST.

8.  Others:

• As implied by the Revenue Secretary, Ajay Bhushan Pandey, a new system of return filing will be implemented on a trial basis in the April of 2019. It will be mandatorily implemented July 2019 onwards.
• A single authority will be implemented on pilot basis for disbursing refunds sanctioned by central and state tax authorities.
• Changes made by Amendment Acts, 2018 (CGST, SGST, UGST, and GST Compensation to State)and changes corresponding to SGST acts will be applicable from 1st February, 2019.
• The GST Council is in the process of introducing a composition scheme for the real estate sector and also for small service providers in the next meeting.
• The threshold of Rs. 20 lakhs for all interest will be reconsidered.
• In case of a conflict between State Appellate Advance Ruling Authorities of different states, a Centralized Appellate Authority of Advance Ruling (AAAR) will be created to bind the whole nation with its advance ruling decisions.
• Section 50 of CGST Act will be amended so that interest is levied only on the amount payable through electronic cash ledger.
• Committee of States will decide if lotteries won must be charged at 12% slab rate for state organized lotteries and 8% slab rate for authorized schemes.
• Law Committee and Fitment Committee will look into matters of extending the scope of composition scheme under GST.
• There will be a single cash ledger under each tax head (CGST, SGST, and IGST). It will be finalized with the GST network and Accounting Authorities.