39th GST Council Meeting Highlights

39th GST Council Meeting Summary

The 39th GST Council meeting that was headed by the Union FM Nirmala Sitharaman held on 14th March 2020 in New Delhi. In this GST Council Meet important decisions were taken. In this article, we will highlight all the decisions taken in this 39th GST Council Meeting.

1. New GST return system and e-invoicing Implementation Postponed

In this 39th GST Council Meeting, the implementation of the New GST Returns as well as e-invoicing and QR Code has been postponed to 1st October 2020. In simple words, the taxpayer needs to file the same tax returns that they were filing before. These old returns will remain valid till 30th September 2020.

2. Changes in the GST rates

i. The GST Council has decided to increased the GST rate levied on cell-phones and other specified mobile parts from 12% to 18%. This decision was taken by the GST Council to avoid an inverted duty structure. ii. GST Council decided to rationalize the GST rate for all the matches to 12%. Before this, the homemade matches attracted 5% whereas others attracted 18%. iii. The GST rate on aircraft MRO (Maintenance, Repair, and Overhaul) service is reduced from 18% to 5% with full Input Tax Credit (ITC). It shall be noted that these GST rate changes will be applicable from 1st April 2020.

3. GSTR-9 and 9C Due-Date Extended

i. The GST Council in this meeting decided to extend the due date for filing GSTR-9 and 9C till 30th June 2020 for the financial year 2018-19. Moreover, it is decided that the aggregate turnover limit prescribed for furnishing GSTR-9C will be increased from 2 Crore INR to 5 Crore INR. ii. In this meeting, it was also decided that the taxpayers having an aggregate turnover of less than 2 Crore INR needs not to pay any late fees for filing GSTR-9 for the Financial Year 2018-19.

4. Calculation of interest on delayed payments

In the 39th GST Council meeting, the council decided that the interest on delayed payments of GST shall be calculated on the net cash tax liability of the taxpayer. This change will come into effect from 1st July 2017 and the changes in the law will be made retrospectively.

5. Due-dates Extension and Waiver

i. As per this GST council meeting, the taxpayer who was not able to opt for composition scheme by filing CMP-02 form needs not to furnish the GSTR-1 for 2019-20. ii. In addition to this, any taxpayer whose place of business is in the Union Territory of Ladakh, for them the due date for filing GSTR-1 Form, GSTR-3B Form and GSTR-7 Form for the tax period of July 2019 to January 2020 is extended till 24th March 2020.

6. Revocation of cancellation of Registration

The GST council in this GST Council Meeting decided that the taxpayer who has applied for the cancellation of GST Registration till 14th March 2020 can revoke their cancellation application. The window for revocation application for GST registration cancellation is available till 30th June 2020.

7. Introduction of Know Your Supplier

In this 39th GST Council Meeting, a new concept was introduced named as Know Your Supplier. The introduction of this concept will help the taxpayer to know all the basic details about their suppliers or proposed suppliers.

8. Deferment of e-Wallet Scheme

In this meeting, the GST Council postponed the date for the introduction of the e-Wallet Scheme till 31st March 2021.

9. Other Important Decisions

i. To curb tax evasion and fake invoicing under GST, the restriction is imposed on passing the Input Tax Credit (ITC) in a case where the GST registration is new until the premises are verified and financial KYC are carried out. ii. GST Council prescribed certain special procedures, for the taxpayers who are corporate debtors going through insolvency under the provision Insolvency and Bankruptcy Code, 2016. iii. GST Council has introduced a special procedure for the taxpayer in Dadra and Nagar Haveli & Daman and Diu during the transition phase, due to the merger of these Union Territories with effect from 26th January 2020. The transition phase to be completed on 31st May 2020. iv. In 39th GST Council Meeting it was decided that the taxpayer can now process bulk refund claims. This step was taken by the GST Council for the benefit of the exporters.