Highlights from today’s GST Council meeting

The council has decided following changes in respect to supply of goods and services and to fix technical issues in the GST system :

  • To raise the GST rate on mobile handsets and specified components to 18%.
  • To lower the rate on aircraft maintenance, repair and overhaul (MRO) services to 5%.
  • To rationalize the tax rate on handmade and machine made matchsticks to 12%.
  • The interest payable for the delay in payment of GST will be charged on the net tax liability, not the gross tax liability with effect from 1 July, 2017. It means the law will be amended with retrospective effect.
  • Shri Nandan Nilekani would attend the next 3 meetings of the GST Council and update the council of the status of implementation of the decisions taken by the Council and assist the Council in taking appropriate decisions on technology related issues,  
  • Support the timely implementation of various initiatives, the Council gave a go ahead for 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 has made the following recommendations on Law & Procedures changes :

  1. Where 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).
  2. Relaxation to MSMEs from furnishing of Reconciliation Statement in FORM GSTR-9C, for the financial year 2018-19, for taxpayers having aggregate turnover below ₹ 5 crores.
  3. Due date for filing the Annual return and the Reconciliation Statement for financial year 2018-19 to be extended to 30.06.2020.
  4. Late fees not to be levied for delayed filing of the Annual return and the Reconciliation Statement for financial year 2017-18 and 2018-19 for taxpayers with aggregate turnover less than ₹2 crores.
  5. 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.
  6. The requirement of furnishing FORM GSTR-1 for 2019-20 to be waived for taxpayers who could not opt for availing the option of special composition scheme under notification No. 2/2019-Central Tax (Rate) dated 07.03.2019 by filing FORM CMP-02.
  7. A special procedure is being prescribed for registered persons who are corporate debtors under the provisions of the Insolvency and Bankruptcy Code, 2016 and are undergoing the corporate insolvency resolution process, so as to enable them to comply with the provisions of GST Laws during the CIRP period.
  8. 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. Similar extension is also recommended for FORM GSTR-1 & FORM GSTR-7.
  9. Certain class of registered persons (insurance company, banking company, financial institution, non-banking financial institution, GTA, passenger transportation service etc.) to be exempted from issuing e-invoices or capturing dynamic QR code.
  10. The dates for implementation of e-invoicing and QR Code to be extended to 01.10.2020.
  11. Extension of the time to finalize e-Wallet scheme up to 31.03.2021.
  12. Extension of the present exemptions from IGST and Cess on the imports made under the AA/EPCG/EOU schemes up to 31.03.2021.
  13. Continuation of existing system of furnishing FORM GSTR-1 & FORM GSTR-3B till September 2020.
  14. 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.
  15. Clarification in apportionment of ITC in cases of business reorganization under section 18 (3) of CGST Act read with rule 41(1) of CGST Rules.
  16. Clarification on special procedure for registered persons who are corporate debtors under the provisions of the Insolvency and Bankruptcy Code, 2016, undergoing the corporate insolvency resolution process.
  17. Procedure for reversal of input tax credit in respect of capital goods partly used for affecting taxable supplies and partly for exempt supplies under rule 43 (1) (c).
  18. Ceiling to be fixed for the value of the export supply for the purpose of calculation of refund on zero rated supplies.
  19. Allow for refund to be sanctioned in both cash and credit in case of excess payment of tax.
  20. Provide for recovery of refund on export of goods where export proceeds are not realized within the time prescribed under FEMA.
  21. Operationalise Aadhaar authentication for new taxpayers.
  22. Certain amendments to be carried out in the GST laws.

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