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.

5. 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

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 1^st 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 16^th day to 30^th 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 18^th April 2021

Notification No 9/2021 – Central Tax Dated 1^st 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 20^th April 2021

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

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

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

Notification No 11/2021 – Central Tax Dated 1^st 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 1^st 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 26^th May 2021.

Notification No 13/2021 – Central Tax Dated 1^st 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 28^th May 2021.

Notification No 14/2021 – Central Tax Dated 1^st 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 15^th April 2021 to 30^th 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;

GST TIP – 438

As per Circular No. 33/07/2018-GST dated 23rd Feb 2018, the taxpayer in case utilizes the credit carried forward from the blocked CENVAT Credit from the Electronic Credit Ledger, the same has to be paid with interest and penalty.

GST TIP – 436

As per Circular No. 33/07/2018-GST dated 23rd Feb 2018, in case if the taxpayers utilizes the same and the adjudication is not in favor of the taxpayer, the taxpayer has to pay the amount of the utilized CENVAT Credit in the Electronic Credit Ledger with interest and penalty as per the provisions of the CGST Act.

GST Tip – 399

As per Notification No 56/2017 – Central Tax , GSTR – 3B has to be filed on monthly basis till 31st March 2018. GSTR – 3B has to be used for discharge  liability towards tax, interest, penalty, fees or any other amount payable under GST.

GST Tip – 349

A summary of the order issued under sub-section (9) of section 73 or sub-section (9) of section 74 or sub-section (3) of section 76 shall be uploaded electronically in FORM GST DRC-07, specifying therein the amount of tax, interest and penalty payable by the taxpayer to whom the notice is issued.

GST Tip – 346

When the concerned officer issues notice to the taxable person for not paying or short payment of tax or erroneously refunded or input tax credit wrongly availed or utilised by reason of fraud or any wilful misstatement or suppression of facts to evade tax, if the taxable person pays the interest @ 18% and penalty @25% and intimates the concerned officer in FORM GST DRC-03, then the concerned officer will shall issue an order in FORM GST DRC-05 concluding the proceedings in respect of the said notice.

GST Tip – 345

On payment of penalty and interest on a voluntary basis by the taxpayer before the issue of notice by the concerned tax officer in FORM GST DRC-01, the tax officer will not issue the notice and he will acknowledge the payment of interest and penalty in FORM GST DRC-04.

GST Tip – 344

Before serving of the notice in FORM GST DRC-01 by the tax officer, the taxpayer can pay the taxpayer can pay interest @ 18% as per section 50 of the CGST Act and also a penalty of 15% as per Subsection 5 of section 74 and submit the same to the concerned officer in FORM GST DRC-03.

GST Tip – 341

As per Section 74 of the CGST Act if the tax officer feels that tax is not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised by reason of fraud or any wilful misstatement or suppression of facts to evade tax, then the concerned tax official shall serve a notice on the taxable person for the  tax which has not been so paid or which has been so short paid or to whom the refund has erroneously been made, or who has wrongly availed or utilised input tax credit, requiring him to show cause as to why he should not pay the amount specified in the notice along with interest payable at rate of 18% or as recommended by the GST Council.