After a long hiatus, the GST Council finally met and convened the 43rd GST Council Meeting on 28th May, 2021 through video conferencing. The meeting was chaired by the Chairman of Union Finance & Corporate Affairs Minister, Smt. Nirmala Sitharaman and 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.
What conclusions can be drawn from the 43rd GST Council Meeting?
1. Changes in GST Rates on supply of goods & services:
|Medical Oxygen||Full exemption from IGST||For donating to the government or on the recommendation of state authority to any relief agency, even if imported on payment basis valid till 31/08/2021|
|Other oxygen storage and transportation equipment|
|Certain Diagnostic Markers Test Kits|
|Other COVID-19 related goods|
|Diethylcarbamazine (DEC) to support Lympahtic Filarisis||Reduce GST rate from 12% to 5%|
|Parts of sprinklers/ drip irrigation systems falling under tariff heading 8424 (nozzle/laterals)||GST rate of 12%||Even when these goods are sold separately|
|Repair cost of goods re-imported after such repairs||IGST shall be applicable|
|Services supplied to an educational institution including anganwadi by way of serving of food||Exempt from levy of GST irrespective of funding of such supplies from government grants or corporate donations.|
|Fees charged on services provided by way of examination by National Board of Examination (NBE), or similar Central or State Educational Board, including input services||Exempt from GST|
|MRO services in respect of ships/vessels||Reduce GST rate from 18% to 5%||Place of Supply of B2B supply of MRO Services will be recipient of service|
|Service by way of milling of wheat/paddy into flour/ rice to Government/ local authority||Exempt||Distribution of such flour or rice under PDS if the value of goods under such composite supply does not exceed 25%.|
|5%||In other cases, including distribution to registered persons and persons registered for payment of TDS|
|Services supplied to a Government Entity by way of construction of a rope-way||18%|
|Services supplied by Govt. to its undertaking/PSU by way of guaranteeing loans taken by such entity from banks and financial institutions||Exempt|
- It has also been decided to constitute a group of ministers to decide more individual items that should be considered for immediate relief. The GOM is expected to submit their report by 8th June 2021.
- Landowner promoters can utilize credit of GST charged to them by developer promoters in respect of apartments that have been sold after paying GST at any time before or at the time of issuance of completion certificate.
Relaxation in late fees, interest rates and due dates through introduction of Amnesty Scheme
The Ministry of Finance had introduced various Covid-19 related relief measures vide notifications issued on 01.05.2021. Further relaxations have been introduced:
Relaxation in late fee:
|Description||Updated Fee||Tax Period||Conditions|
|Relaxation in late fee for non-furnishing GSTR-3B||Rs.500 per return||July, 2017 to April, 2021 (Return should be furnished between 01/06/2021 to 31/08/2021||A taxpayer who did not have any tax liability|
|Rs. 1,000 per return||Other taxpayers|
|Capping of late fee for delay in furnishing GSTR-3B and GSTR-1||Rs.500 per return||Prospective tax periods||A taxpayer who does not have any tax liability/ nil outward supplies in GSTR-1|
|Rs. 2,000 per return||Taxpayers having AATO* in preceding year up to Rs 1.5 crore|
|Rs. 5,000 per return||Taxpayers having AATO* in preceding year between Rs 1.5 crore to Rs 5 crore|
|Rs. 10,000 per return||Taxpayers having AATO* in preceding year above Rs 5 crores|
|Capping of late fee for delay in furnishing GSTR-4||Rs.500 per return||Prospective tax periods||Composition taxpayers, if tax liability is nil|
|Rs. 2,000 per return||Other taxpayers|
|Capping of late fee for delay in furnishing GSTR-7||Rs.50 per day – Rs. 2,000 per return||Prospective tax periods|
*AATO: Aggregate Annual Turnover
Relaxation in Interest Rates
|Small Taxpayers with aggregate turnover of up to Rs. 5 crores||March & April ’21||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, respectively|
|Waiver of late fee for delay in furnishing return in FORM GSTR-3B for 60 days and 45 days respectively, from the due date|
|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, reduced rate of 9% thereafter for further 45 days.|
|May ‘ 21||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 15 days.|
|Waiver of late fee for delay in furnishing return in FORM GSTR-3B for 30 days from the due date|
|Large Taxpayers with aggregate turnover of more than Rs. 5 crores||May ‘ 21||Lower rate of interest @ 9% for first 15 days after the due date of filing return in FORM GSTR-3B|
|Waiver of late fee for delay in furnishing return in FORM GSTR-3B for 15 days from the due date|
Extension in due dates
|GSTR Form||Tax Period||Revised Due Date|
|GSTR-1/ IFF||May ’21||26/06/2021|
|ITC-04||QE March ’21||30/06/2021|
- Allowing cumulative application under 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 08.2021.
- Time limit for completion of various actions, by any authority or by any person, under the GST Act, which falls during the period from 15thApril 2021 to 29th June 2021, to be extended up to 30th June, 2021, subject to some exceptions.
- Taxpayers are allowed to self-certify their reconciliation statement under FORM GSTR-9C for FY 20-21.
- Reconciliation statement in FORM GSTR-9Cfor the FY 2020-21 is required to be filed by taxpayers with annual aggregate turnover above Rs 5 Crore only.
- Filing of annual return in FORM GSTR-9/ 9A for FY 2020-21 is optional for taxpayers having aggregate annual turnover up to Rs 2 Crore.
- GST Council recommended amendments in certain provisions of the Act to make the present system of filing GSTR-1 GSTR-3Bas the default return filing system in GST.
Did the 43rd GST Council Meeting meet taxpayers’ expectations?
The Ministry of Finance did introduce a series of amendments and relaxations through the 43rd GST Council Meeting. The Finance Ministry has estimated a GST shortfall at Rs 2.69 lakh crore which needs to be distributed to states as GST Compensation. The Finance Ministry has decided to borrow Rs 1.58 lakh crore.
However, the Ministry has yet again paid no heed to other pressing issues such as:
- Issues relating to Inverted Duty Structure
- Subsume petrol and diesel under the ambit of GST