Everything you need to know about the 43rd GST Council Meeting
- Jun 3, 2021 | Manjula Muthukrishnan
Amidst the second wave of the Coronavirus pandemic, the Goods and Services Tax Council held its 43rd council meeting in New Delhi on May 28th, 2021. They discussed various concerns, including new Covid-19 relief measures, changes in tax rates, simplification of annual returns, etc. Here are the highlights of the 43rd GST council meeting.
COVID-19 relief measures
Covid-19 relief measures for certain goods and services as well as for taxpayers were approved.
Goods and Services
Purchase of specific items like medical oxygen, oxygen concentrators, other oxygen storage or oxygen transport equipment, diagnostic test kits, and Covid-19 vaccines has been recommended for a total exemption from Integrated Goods and Services Tax (IGST). However, these exemptions are applicable only if the goods are imported with the intent to donate to the Government or are purchased on the recommendation of State Authorities for donating to a relief agency. Additionally, this exemption is only valid for three months until the end of August 2021.
At present, IGST and Basic Custom Duty exemption were applicable only when certain COVID-19 relief goods were imported to distribute but were free of cost. This exemption is now applicable till the end of August 2021.
Keeping in line with the current COVID-19 relief measures implemented earlier in May, the GST council has recommended the following relief measures for taxpayers.
For taxpayers with an annual turnover of up to ₹5 crores.
The interest rate on late furnishing of GSTR3B or late filing of PMT06 challan for the tax periods of March and April 2021 are reduced to NIL for the first 15 days. Additionally, the interest rate was brought down from 18% to 9% for 45 and 30 days thereafter. The late fee for furnishing GSTR3B for the tax periods of March and April 2021 is waived off for 60 and 45 days from the due date of furnishing the tax return form.
For taxpayers who have opted for the Composition Scheme under GST
The interest rate for late furnishing of CMP-08 for the tax period of March 2021 has reduced to NIL for the first 15 days and reduced further to 9% for 45 days thereafter. Additionally, the rate of interest for the first 15 days from the deadline for furnishing GSTR3B and PMT-06 challan for the tax period of May 2021 is reduced to NIL for the first fifteen days and 9% for the next fifteen days.
Similarly, the late fee is waived for taxpayers who are filing monthly returns for 30 days from the due date of furnishing GSTR3B.
For taxpayers who have an annual turnover exceeding ₹5 crore
The interest applicable on late filing of GSTR3B is reduced to 9% for the first fifteen days of the tax period of May 2021. Additionally, the late fee for delayed filing of GSTR3B for the tax period of May 2021 is waived for the first fifteen days from the due date.
Other COVID-19 relief measures for taxpayers
- The due date for filing GSTR1 and/or IFF for the tax period of May 21st has been extended by 15 days.
- The due date for filing GSTR4 for FY2020-21 is extended to July 31st, 2021.
- The due date for filing ITC04 for QE March 2021 is extended to June 30th, 2021.
- Taxpayers can file a cumulative application for availing of input tax credit (ITC) for the tax periods of April, May, and June 2021 in the tax filing period of June 2021.
- Taxpayers can use the Electronic Verification Code instead of a Digital Signature Certificate to file returns until August 31st, 2021.
Other relief measures for taxpayers
Relief measures for facilitating trade
The late fee for not furnishing GSTR3B for the tax periods from July 2017 to April 2021 has been capped to a maximum of ₹500 per return. However, this reduced rate is applicable only if the pending GSTR3B returns are filed between June 1st to August 31st, 2021.
Late fee imposed under Section 47 of the CGST Act will be rationalised
In a bid to reduce the burden of penalties on taxpayers, the late fee for delayed filing of GSTR3B and GSTR1 is being capped at ₹500 per return for taxpayers having nil tax liabilities under GSTR3B and nil outward supplies under GSTR1.
Additionally, those taxpayers with an annual aggregate turnover exceeding ₹1.5 crores in the preceding year will be required to pay a late fee capped at ₹2000. Taxpayers with an annual aggregate turnover exceeding ₹5 crores in the prior year will be required to pay a late fee capped at ₹10,000.
For taxpayers who have opted for the Composition Scheme under GST and have failed to file GSTR4, the late fee will be capped at ₹500 per return only if the tax liability is nil. Otherwise, the late fee has been capped at ₹2000 per return.
Annual return filing for FY2020-21 to be simplified
The GST council has announced that certain amendments in section 35 and section 44 of the CGST Act made through the Finance Act, 2021 will ease the compliance requirement for furnishing reconciliation statement in Form GSTR9C. This amendment will allow taxpayers to self verify the reconciliation statement instead of getting it verified by a chartered accountant.
The above-mentioned change will be applicable while filing the annual return for FY2020-21.
Additionally, filing GSTR9 and GSTR9A will be optional for taxpayers with an aggregated turnover of up to ₹2 crores.