Recommendations of 43rd GST Council meeting

The 43 GST Council met under the Chairmanship of Union Finance & Corporate Affairs Minister
Smt. Nirmala Sitharaman through video conferencing here today. The meeting 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.
The GST Council has made the following recommendations relating to changes in GST rates on
supply of goods and services and changes related to GST law and procedure:
COVID-19 RELIEF
As a COVID-19 relief measure, a number of specified COVID-19 related goods such as medical
oxygen, oxygen concentrators and other oxygen storage and transportation equipment, certain
diagnostic markers test kits and COVID-19 vaccines, etc., have been recommended for full
exemption from IGST, even if imported on payment basis, for donating to the government or on
recommendation of state authority to any relief agency. This exemption shall be valid upto
31.08.2021. Hitherto, IGST exemption was applicable only when these goods were imported “free of
cost” for free distribution. The same will also be extended till 31.8.2021. It may be mentioned that
these goods are already exempted from Basic Customs duty. Further in view of rising Black Fungus
cases, the above exemption from IGST has been extended to Amphotericin B.
Further relief in individual item of COVID-19 after Group of Ministers (GoM) submits report on 8 June 2021

As regards individual items, it was decided to constitute a Group of Ministers (GoM) to go into the
need for further relief to COVID-19 related individual items immediately. The GOM shall give its
report by 08.06.2021.


OTHER RELIEFS ON GOODS
To support the LympahticFilarisis (an endemic) elimination programme being conducted in
collaboration with WHO, the GST rate on Diethylcarbamazine (DEC) tablets has been
recommended for reduction to 5% (from 12%).
Certain clarifications/clarificatory amendments have been recommended in relation to GST rates.
Major ones are, –
Leviability of IGST on repair value of goods re-imported after repairs
GST rate of 12% to apply on parts of sprinklers/ drip irrigation systems falling under tariff heading
8424 (nozzle/laterals) to apply even if these goods are sold separately.

SERVICES
To clarify those services supplied to an educational institution including anganwadi(which provide
pre-school education also), by way of serving of food including mid- day meals under any midday
meals scheme, sponsored by Government is exempt from levy of GST irrespective of funding of
such supplies from government grants or corporate donations.
To clarify these services provided by way of examination including entrance examination, where fee
is charged for such examinations, by National Board of Examination (NBE), or similar Central or
StateEducational Boards, and input services relating thereto are exempt from GST.
To make appropriate changes in the relevant notification for an explicit provision to make it clear that
land owner promoters could utilize credit of GST charged to them by developer promoters in respect
of suchapartments that are subsequently sold by the land promotor and on which GST is paid. The
developer promotor shall be allowed to pay GST relating to such apartments any time before
or at the time of issuance of completion certificate.
To extend the same dispensation as provided to MRO units of aviation sector to MRO units of
ships/vessels so as to provide level playing field to domestic shipping MROs vis a vis foreign MROs
and accordingly, –
GST on MRO services in respect of ships/vessels shall be reduced to 5% (from 18%).
PoS of B2B supply of MRO Services in respect of ships/ vessels would be location of recipient of
service
To clarify that supply of service by way of milling of wheat/paddy into flour (fortified with
minerals etc. by millers or otherwise )/rice to Government/ local authority etc.for distribution of
such flour or rice under PDS is exempt from GST if the value of goods in such composite
supply does not exceed 25%. Otherwise, such services would attract GST at the rate of 5% if
supplied to any person registered in GST, including a person registered for payment of TDS.
To clarify that GST is payable on annuity payments received as deferred payment for
construction of road. Benefit of the exemption is for such annuities which are paid for the service
by way of access to a road or a bridge.

To clarify those services supplied to a Government Entity by way of construction of a rope-way
attract GST at the rate of 18%.
To clarify that services supplied by Govt. to its undertaking/PSU by way of guaranteeing loans taken
by such entity from banks and financial institutions is exempt from GST.

MEASURES FOR TRADE FACILITATION:

  1. Amnesty Scheme to provide relief to taxpayers regarding late fee for pending
    returns:

    To provide relief to the taxpayers, late fee for non-furnishing FORM GSTR-3B for the
    tax periods from July, 2017 to April, 2021 has been reduced / waived as under: –
    i. late fee capped to a maximum of Rs 500/- (Rs. 250/- each for CGST & SGST) per return for
    taxpayers, who did not have any tax liability for the said tax periods;
    ii. late fee capped to a maximum of Rs 1000/- (Rs. 500/- each for CGST & SGST) per return
    for other taxpayers;
    The reduced rate of late fee would apply if GSTR-3B returns for these tax periods are
    furnished between 01.06.2021 to 31.08.2021.

2. Rationalization of late fee imposed under section 47 of the CGST Act:

To reduce burden of late fee on smaller taxpayers, the upper cap of late fee is being
rationalized to align late fee with tax liability/ turnover of the taxpayers, as follows

A. The late fee for delay in furnishing of FORM GSTR-3B and FORM GSTR-1 to be
capped, per return, as below:

(i) For taxpayers having nil tax liability in GSTR-3B or nil outward supplies
in GSTR-1, the late fee to be capped at Rs 500 (Rs 250 CGST + Rs 250 SGST)
(ii) For other taxpayers:
a. For taxpayers having Annual Aggregate Turnover (AATO) in
preceding year upto Rs 1.5 crore, late fee to be capped to a maximum
of Rs 2000 (1000 CGST+1000 SGST);
b. For taxpayers having AATO in preceding year between Rs 1.5 crore
to Rs 5 crore, late fee to be capped to a maximum of Rs 5000 (2500
CGST+2500 SGST);
c. For taxpayers having AATO in preceding year above Rs 5 crores, late
fee to be capped to a maximum of Rs 10000 (5000 CGST+5000
SGST).

B. The late fee for delay in furnishing of FORM GSTR-4 by composition taxpayers to
be capped to Rs 500 (Rs 250 CGST + Rs 250 SGST) per return, if tax liability is nil in
the return, and Rs 2000 (Rs 1000 CGST + Rs 1000 SGST) per return for others.

C. Late fee payable for delayed furnishing of FORM GSTR-7 to be reduced to Rs.50/-
per day (Rs. 25 CGST + Rs 25 SGST) and to be capped to a maximum of Rs 2000/-
(Rs. 1,000 CGST + Rs 1,000 SGST) per return.

All the above proposals to be made applicable for prospective tax periods.

3. COVID-19 related relief measures for taxpayers:

In addition to the relief measures already provided to the taxpayers vide the
notifications issued on 01.05.2021, the following further relaxations are being
provided to the taxpayers:

A. For small taxpayers (aggregate turnover upto Rs. 5 crore)

a. March & April 2021 tax periods:
i. 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 for March,2021 and April, 2021 respectively.
ii. Waiver of late fee for delay in furnishing return in FORM GSTR-3B for the tax periods
March / QE March, 2021 and April 2021 for 60 days and 45 days respectively, from the due
date of furnishing FORM GSTR-3B.
iii. 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, and reduced rate of 9% thereafter for further 45
days.

b. For May 2021 tax period:
i. 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, and reduced rate of 9% thereafter for further 15 days.
ii. Waiver of late fee for delay in furnishing returns in FORM GSTR-3B for taxpayers filing
monthly returns for 30 days from the due date of furnishing FORM GSTR-3B

B. For large taxpayers (aggregate turnover more than Rs. 5 crore)

A lower rate of interest @ 9% for first 15 days after the due date of filing return in FORM
GSTR-3B for the tax period May, 2021.
ii. Waiver of late fee for delay in furnishing returns in FORM GSTR-3B for the tax period May,
2021 for 15 days from the due date of furnishing FORM GSTR-3B.

C. Certain other COVID-19 related relaxations to be provided, such as

  1. Extension of due date of filing GSTR-1/ IFF for the month of May 2021
    by 15 days.
  2. Extension of due date of filing GSTR-4 for FY 2020-21 to 31.07.2021.
  3. Extension of due date of filing ITC-04 for QE March 2021 to 30.06.2021.
  4. Cumulative application of rule 36(4) for availing ITC for tax periods
    April, May and June, 2021 in the return for the period June, 2021.
  5. Allowing filing of returns by companies using Electronic Verification Code
    (EVC), instead of Digital Signature Certificate (DSC) till 31.08.2021.

D. Relaxations under section 168A of the CGST Act: Time limit for completion of
various actions, by any authority or by any person, under the GST Act, which falls
during the period from 15 April, 2021 to 29 June, 2021, to be extended upto 30
June, 2021, subject to some exceptions.
[Wherever the timelines for actions have been extended by the Hon’ble Supreme
Court, the same would apply]

4. Simplification of Annual Return for Financial Year 2020-21:

i. Amendments in section 35 and 44 of CGST Act made through Finance Act, 2021 to be
notified. This would ease the compliance requirement in furnishing reconciliation statement
in FORM GSTR-9C, as taxpayers would be able to self-certify the reconciliation statement,
instead of getting it certified by chartered accountants. This change will apply for Annual
Return for FY 2020-21.
ii. The filing of annual return in FORM GSTR-9 / 9A for FY 2020-21 to be optional for
taxpayers having aggregate annual turnover upto Rs 2 Crore;
iii. The reconciliation statement in FORM GSTR-9C for the FY 2020-21 will be required to be
filed by taxpayers with annual aggregate turnover above Rs 5 Crore.

  1. Retrospective amendment in section 50 of the CGST Act with effect from 01.07.2017,
    providing for payment of interest on net cash basis, to be notified at the earliest.

OTHER MEASURES
i. GST Council recommended amendments in certain provisions of the Act so as to make the
present system of GSTR-1/3B return filing as the default return filing system in GST.

Note: The recommendations of the GST Council have been presented in this release in simple
language for information of all stakeholders. The same would be given effect through relevant
Circulars/Notifications which alone shall have the force of la

New Functionalities enabled on GST Portal during the month of April 2021

New Functionalities enabled on GST Portal during the month of April 2021

Change and improvements are the main reasons for success of any reform or product and the same is being adopted by the GSTN. It is goods to note that GSTN is coming up with new features day in day out and enabling the taxpayers to have seamless experience. These new features will definitely improve the user experience as well as improve the efficiency of compliances and minimizing the errors.

Let’s discuss about the new features/functionalities released by GSTN during the month of April 2021

Auto Generation of Form GSTR – 2B for QRMP (Quarterly Returns Monthly Payment) Taxpayers  

For availing input tax credit matching as per Rule 69 of the CGST Rules is to be carried out based on the taxpayers Purchase Register and data auto populated in From GSTR – 2B based on the suppliers filing of Form GSTR – 1 or IFF (Invoice Furnishing Facility). The QRMP Tax payers have also to do matching and for that Form GSTR – 2B is the basis and now the same is made available to the those taxpayers

  1. Taxpayers can now view and download their system generated Quarterly Form GSTR-2B, for Jan-March, 2021 quarter, by clicking on Auto-drafted ITC statement for the quarter on 14th April, 2021, by selecting the last month of the quarter (M3).
  2. Form GSTR-2B contains details of filed IFFs (for Month M1 & M2) & filed Form GSTR 1 (for Month M3). Form GSTR 2B has two sections of ITC i.e. ITC available and ITC not available (which flows from the supplier’s filed IFF & Form GSTR-1, imports etc.). It also contains tax liability of the taxpayer (which flows from the taxpayers own filed IFF & Form GSTR-1).
  3. The default view of Form GSTR-2B is quarterly. However to view Form GSTR-2B of a particular month (M1, M2 or M3), taxpayer has an option to select appropriate month, from the view drop-down to view that month’s data.
  4. A hyperlink ‘View advisory’ has also been provided, which on clicking displays the criteria/ cut-off dates considered for generation of quarterly GSTR-2B, as a pop-up, with details of Supplies from/type i.e. Monthly taxpayer, Taxpayer in QRMP Scheme, NRTP, ISD & Import from Overseas/SEZs, and ‘From
  • Offline Matching Tool enabled for QRMP Taxpayers

Matching of taxpayers purchase register and data based on the filing of Suppliers Form GSTR – 1 or IFF is an time consuming and complex activity as the taxpayers will many transactions during the return filing period. Automation is the need as it will avoid the user errors and saves time and efforts. Some taxpayers cannot afford investments on technology and for such taxpayers the GSTN has provided an offline utility for matching. With the rollout of QRMP scheme, now the same utility is being made available to the QRMP taxpayers also.

  1. The Matching Offline Tool has been updated and now taxpayers under QRMP Scheme will also be able to use it.
  2. The system generated Form GSTR-2B JSON file can be used for matching details, as available with them in their purchase register, using the updated Matching Offline Tool.
  3. Taxpayers under QRMP Scheme can now navigate to Services > Returns > Returns Dashboard, select the Financial Year and Return Filing Period > SEARCH and click on Download button on Auto – drafted ITC Statement – GSTR -2B tile to download system generated Form GSTR-2B JSON file, for opening and matching it in the matching tool.
  4. In the Matching tool dashboard page, an option to select the quarter has been provided and in the purchase register, quarters Apr-Jun, Jul-Sep, Oct Dec and Jan-Mar have been added as the tax periods.
  • Auto-population of ITC data in Form GSTR – 3B for QRMP taxpayers

The success of any product or service will depend on the ease of its operations and usage it and providing auto population of data is another key element for return filing.  Reconciliations or error occur when there is data entry. Form GSTR – 3B being a  business critical return, the accuracy in filing of it is the need of the hour and similar to regular taxpayer the Input tax credit data is now being auto populated for QRMP Taxpayers also.

  1. Figures of ITC available and ITC to be reversed, will now be auto-populated in Table 4 of Form GSTR-3B of the taxpayers under QRMP scheme, from their system generated quarterly Form GSTR-2B.
  2. On the GSTR-3B dashboard page, an additional button ‘System computed GSTR-3B’ has also been provided, by clicking which system computed Form GSTR-3B can be downloaded in PDF format.
  3. Taxpayer under QRMP scheme can edit the auto-drafted values as per their records and save the updated details in their Form GSTR-3B. The system will show a warning message to taxpayers in case ITC available is increased by more than 5% or ITC to be reversed is reduced even partially, by them. However, the system will not stop the filing of Form GSTR-3B in these cases.
  • Auto-population of Liability data in Form GSTR – 3B for QRMP taxpayers

Similar to input tax credit, the data related to the tax liability to the be discharged by the QRMP taxpayers will be auto populated in Form GSTR – 3B

Liability in Table-3 (except 3.1(d)) of Form GSTR-3B, for the taxpayers under QRMP Scheme, will now be auto-populated on the basis of Filed quarterly Form GSTR-1 (of Month 3) and Filed IFF (of Month 1 & 2). Liability of table 3.1 (d) is auto populated from the filer’s Form GSTR 2B.

Note: Data saved/ submitted in Form GSTR-1 or in IFF, will not be auto-populated as Liability, in Table-3 of Form GSTR 3B

  • Generation of From GSTR – 11 based on From GSTR – 1 and GSTR – 5

Entities and organizations which are falling part of the Geneva Convention or as notified by commissioner from time to time have to the take registration under UIN scheme. The main idea of having a different registration number and basis on that they can claim refund on taxes paid by them for their purchases. These organizations are not required to pay taxes as part of the treaty and they are exempted but in GST as exemptions are very limited or restriced they are provided with refund mechanism and for that they have file From GSTR – 11. Now for these taxpayers also based on the suppliers GSTR – 1 or GSTR – 5, the data is auto populated.

UIN holders are required to file details of purchases (inward supplies) in their Form GSTR-11. Now their Form GSTR-11 will be generated on the basis of Form GSTR-1 & Form GSTR-5, filed by their supplier taxpayers. This will facilitate UIN holder’s in filing their refund claim

GIST of Notifications issued on 1st May 2021

GIST of Notifications issued on 1st May 2021

Due to the ongoing second wave of the Covid – 19 pandemic, there are a lot of restrictions imposed on the business and common person to curtail the spread of the virus. As a  part of lockdowns or restrictions, the trade and industry cannot run the business full-fledged and causing a lot of hardships in the filing of returns or meet the compliance requirements. Keeping in view of all these, the Government has provided relaxation under GST in for wavier/part wavier of interest, late fee and extension of due date for filing of returns.

Notification No 8/2021 – Central Tax Dated 1st May 2021 – Reduction & wavier of Interest for delayed payment of taxes

Interest will not be applicable for the delay in filing of returns for the first 15 days, and from 16th day to 30th day, it will be charged at 9%, and after 30 days, the interest rate will be 18%, i.e., the normal rate. The above benefit will be applicable for the following class of persons for the months of April and May 2021

  1. Taxpayers having aggregate turnover above ₹ 5 crores during the previous financial year
  2. Taxpayers having aggregate turnover up to ₹ 5 crores during the previous financial year and filing GSTR – 1
  3. Taxpayers having aggregate turnover up to ₹ 5 crores during the previous financial year and filing returns under QRMP (Quarterly Returns Monthly Payment) Scheme  
  4. Taxpayers who are availing of the Composition Scheme benefit

The above notification is a retrospective notification and is effective from 18th April 2021

Notification No 9/2021 – Central Tax Dated 1st May 2021 – Relaxation in Late fee

Levy of the late fee has been waived for the taxpayers who are filing GSTR – 3B

  1. Late fee has been waived off for the first 15 days for taxpayers having aggregate turnover above ₹ 5 crores during the previous financial year
  2. Late fee has been waived off for the first 30 days for taxpayers who are filing GSTR – 3B on a monthly basis and quarterly basis having aggregate turnover up to ₹ 5 crores during the previous financial year

The above notification is a retrospective notification and is effective from 20th April 2021

Notification No 10/2021 – Central Tax Dated 1st May 2021

The due date for filing of GSTR – 4 by composition taxpayers has been extended to 31st May 2021.

The above notification is a retrospective notification and is effective from 30th April 2021

Notification No 11/2021 – Central Tax Dated 1st May 2021

The due date for furnishing the declaration in FORM GST ITC-04, in respect of goods dispatched to a job worker or received from a job worker, during the period from 1st January 2021 to 31st March 2021 has been extended from 25th April 2021 to 31st May 2021.

Notification No 12/2021 – Central Tax Dated 1st May 2021 – Extension in filing due date for filing of GSTR – 1

The due date for filing of GSTR – 1 for the month of April 2021 has been extended to 26th May 2021.

Notification No 13/2021 – Central Tax Dated 1st May 2021 – Relaxation in matching

Relaxation in matching for the availing input tax credit for April 2021 has been provided, and the taxpayers have to do matching for the months of April and May together while filing GSTR – 3B for the month of May 2021.

Taxpayers who are filing returns under QRMP Scheme can file IFF (invoice furnishing facility) by 28th May 2021.

Notification No 14/2021 – Central Tax Dated 1st May 2021 – Relaxation in compliance proceedings due date

The time limits for the completion of compliance or any action by the tax authorities or any person which are  falling between 15th April 2021 to 30th May 2021 has been extended in the following cases

 a) completion of any proceeding or passing of any order or issuance of any notice, intimation, notification, sanction or approval or such other action, by whatever name called; or

b) filing any appeal, reply, or application or furnishing any report, document, return, statement, or other records, by whatever name is called.

The above extension is not applicable in the following cases

  1. Related to Time of Supply
  2. If the turnover of the composition taxpayer has crossed the threshold during this period
  3. Section 25 – registration procedure
  4. Section 27 – procedure-related to casual taxable person and the non-resident taxable person
  5. Section 31 – Tax Invoice
  6. Section 37 – provisions related to the filing of returns for outward supplies
  7. Section 47 – provisions related to levy of late fee
  8. Section 50 – provisions related to ley of interest
  9. Section 69 – provisions related to power to arrest errant taxpayers
  10. Section 90 – provisions related to Liability of partners of firm to pay tax
  11. Section 122 – provisions related to penalties for certain offenses
  12. Section 129 – provisions related to detention, seizure and release of goods and conveyance under transit
  13. Section 39 – except for provisions related to sub-section (3), (4) and (5) related to TDS deductors, ISD and not resident taxpayers
  14. Section 68 – provisions related to e-waybill

Provided that where, any time limit for completion of any action, by any authority or by any person, specified in, or prescribed or notified under rule 9 of the Central Goods and Services Tax Rules, 2017, falls during the period from the 1st day of May 2021 to the 31st day of May 2021, and where completion of such action has not been made within such time, then, the time limit for completion of such action, shall be extended up to the 15th day of June 2021;