The 40th GST Council Meeting by the finance ministry is held on 12th June 2020 via video conferencing. This is the very first GST council meet after the blow-up of the corona-virus pandemic. Thus there have been a lot of talks and speculations about this meeting citing that the consequences of the decisions made can be huge.
The last meeting i.e. the 39th GST Council Meeting took place in March on the 14th when COVID-19 wasn’t as big as it is today. Since then 5 lockdowns have been announced and the government has released several measures for businesses to fight back the economic crises.
- Lockdown 1: COVID 19 Relief measures introduced on 24th March 2020
- Advisory for Composition Dealers amidst COVID 19
- Form PMT 09 for transfer of E-Cash Ledger Balance
- Clarification Issued by CBIC for GST Refund Issues
- Lockdown 3.0: COVID 19 New Relief Measures issued in May
- Updates in GST Dues dates amidst COVID 19 Lockdown
Decisions taken in the 40th GST Council Meeting:
- No late fees for taxpayers who have no tax liability but have not filed GST returns for tax-period July 2017 – Jan 2020
- For taxpayers having tax liability, maximum late fee for non-filing of GSTR-3B returns for period Jul 2017 – Jan 2020 has been capped to ₹ 500 This will apply to all returns submitted during Jul 1, 2020 – Sep 30, 2020.
- For small taxpayers whose aggregate turnover is up to ₹5 crore, the rate of interest for late furnishing of GST returns for Feb, Mar and April 2020, beyond July 6, 2020, the rate of interest is being reduced from 18% to 9%.
- Small taxpayers will have to pay no interest for late furnishing of GST returns till July 6, 2020 post that reduced interest @9% will be applicable till September 30, 2020.
- For small taxpayers whose aggregate turnover is up to ₹ 5 crore are waived off late fees and interest if they file GSTR-3B for months of May, June and July 2020, by September 2020.
- For Compensation requirements of states, a special one-agenda meeting will happen in July to discuss compensation.
Expectations from the 40th GST Council Meeting
- Relaxation or delay on 180 days ITC Reversal CGST Rule 37(2): Due to the lockdown, the 180 days ITC Reversal CGST Rule 37(2) which is about ITC Reversal due to non-payment of vendor’s invoice within 180 days may get relaxed or delayed.
- Calamity Cess: Discussion and decision are expected on calamity cess. The finance ministry may introduce it or not considering the present scenario. However, there are several talks about the cess.
- GST Rates on non-essential items: Since increasing the GST rates on non-essential items may lower their demands, the finance ministry is not in favour of increasing the rates.
- Due dates extension: Citing the lockdown, several due-dates have been pushed ahead and/or changed. Now, the dates are further expected to see some changes. Especially the ones related to claiming the input tax credit. ITC claims u/s 16 (4) for FY 2018-9 are said to be extended.
- Update in GST Returns filing dates extensions for cyclone-affected areas: There is a possibility for change or extension in the GST Returns filing dates extensions for cyclone-affected areas.
- Late fees waiver: Since there are long pending dues, the GSTR 3B late fees may get waived or businesses may get relief for their earlier pending returns.
- E-Invoicing under GST: The Council may defer/extend e-invoicing for the time-being or relax certain category of taxpayers from E-Invoicing and QR Code.
- Other pandemic measures:
It is expected that certain other measures will be taken amidst COVID-19 crises:
- Aid in the form of reduction of GST rates for certain sectors such as hospitality, real estate, airlines etc. is also expected.
- The GST rate reduction on essentials like medical equipment, vegetables and food items is also expected.
- Clarity on the availability of ITC on masks, hand gloves, sanitizers, and other medical facilities etc. provided to the staffs during pandemic crises.
To read our coverage on the previous Council Meet decisions, you may refer here: