Key Takeaways from the 43rd GST Council Meet
The Goods and Services Tax (‘GST’) Council in its 43rd meeting held on May 28, 2021 via video conferencing has made recommendations w.r.t. various issues related to changes in rate of Tax on supply of goods and services and changes related to GST laws and procedures, key highlights of which is as under:
- GST Rate on Covid-19 related goods
a. Exemption from Integrated Goods and Services Tax (‘IGST’) granted till August 31, 2021 on Covid-19 related goods such as medical oxygen, oxygen concentrators, other oxygen storage and transportation equipment, certain diagnostic markers test kits, Covid-19 vaccines and Amphotericin B, even if imported on payment basis for donation to the Government or to any relief agency on recommendation of state authority.
- GST rates revised on supply the following goods and services:
|Particulars||Earlier rate||Revised rate|
|Diethylcarbamazine (DEC) tablets||12%||5%|
|Maintenance Repair Operations services in respect of ships/vessels||18%||5%|
- Clarifications in relation to taxability of goods
a.Leviability of IGST on repair value of goods re-imported after repairs.
b.GST applicable @ 12% on parts of sprinklers/ drip irrigation systems falling under Heading 8424 (nozzle/laterals), even the goods are sold separately.
- Clarifications in relation to taxability of Services
a.Exemption to services supplied by the Government to its undertaking/PSU by way of guaranteeing loans taken by such entity from banks and financial institutions.
b.GST payable on annuities payments received as deferred payment for construction of road. Annuities paid for the service by way of access to a road or a bridge is exempt.
c.Landowner promoters may opt to utilize Input Tax Credit (‘ITC’) of GST charged by developer promoters in respect of apartments which are subsequently sold and GST is paid by land owner.
d.Exemption to services supplied to an educational institutionincluding anganwadi (which provide pre-school education also), by way of serving of food including mid- day meals under any midday meals scheme, sponsored by the Government irrespective of funding of such supplies from the Government grants or corporate donations.
e.Exemption to services provided by way of examination including entrance examination, where fee is charged for such examinations by the National Board of Examination (NBE), or similar Central or State educational Boards, and input services in relation to such service.
f.Exemption on service supplied 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 public distribution services (PDS) if value of goods in such composite supply does not exceed 25%.
g.Services supplied to a Government Entity by way of construction of a rope-way leviable to GST at rate of 18%.
- Amnesty Scheme to provide relief to taxpayers regarding late fee for pending returns
|Taxpayers having Tax liability||Maximum INR 500 per return subject to condition that Form GSTR-3B furnished between June 1 to August 31, 2021||July 2017 to April 2021||Form GSTR- 3B|
|Taxpayers having no Tax liability||Maximum INR 1,000 per return subject to condition that Form GSTR-3B furnished between June 1 to August 31, 2021|
|Taxpayers having Tax liability||INR 500 per return||May 2021 onwards||Form GSTR- 1 or Form GSTR- 3B|
|Taxpayers having aggregate turnover upto INR 15 million in preceding year||INR 2000 per return|
|Taxpayers having aggregate turnover between INR 15 million to 50 million in preceding year||INR 5000 per return|
|Taxpayers having aggregate turnover above 50 million in preceding year||INR 10000 per return|
|Taxpayers having Tax liability||INR 500 per return||Form GSTR- 4|
|For all taxpayers||Reduced to INR 50 per day and maximum of INR 2,000 per return||Form GSTR- 7|
- Reduction in rate of interest for delayed payments of tax
|Particulars||Rate of Interest||Period|
|Taxpayers having aggregate turnover more than INR 50 million||For first 15 days – 9%
Thereafter – 18%
|Taxpayers having aggregate turnover upto INR 50 million||For first 15 days – Nil
Next 45 days (for March) and next 30 days for April– 9%
Thereafter – 18%
|March to April 2021|
|For first 15 days – Nil
Next 15 days – 9%
Thereafter – 18%
|Composition taxpayers||For first 15 days – Nil
Next 45 days – 9%
Thereafter – 18%
- Waiver of late fees for late filing of GST returns
|Particulars||Time Period for which late fees waived||Period|
|Taxpayers having aggregate turnover more than INR 50 million||15 days from due date of furnishing Form GSTR-3B||May 2021|
|Taxpayers having aggregate turnover upto INR 50 million
|March 2021 and April 2021 – 60 days and 45 days, respectively from due date of furnishing Form GSTR-3B||March to April 2021 and quarter ending March 2021|
|30 days from due date of furnishing Form GSTR-3B||May 2021|
- Due date for filing of GST returns extended
|Forms||Period||Due date||Extended due date|
|Form GSTR-1/Invoice Furnishing Facility (details of outward supplies of goods or services)||May 2021||June 11, 2021||June 26, 2021|
|Form GSTR-4 (registered person having opted for composition levy)||FY 2020-2021||May 31, 2021||July 31, 2021|
|Form ITC-04 (details of goods/capital goods sent for job work and received back)||January – March 2021||May 31, 2021||June 30, 2021|
- Annual return and Audit
a.Amendments in Section 35 and 44 of Central Goods and Services Tax Act, 2017 (‘the CGST Act’) made vide the Finance Act, 2021 w.r.t. furnishing of self-certified reconciliation statement, instead of chartered accountant certificate, applicable for FY 2020-21.
b.Filing of annual return in Form GSTR 9/9A for FY 2020-21 optional for taxpayers having annual turnover upto INR 20 million. Further, reconciliation statement in Form GSTR-9C for FY 2020-21 required to be filed by taxpayers with annual aggregate turnover above INR 50 million.
- Other procedural changes
a.Reconciliation of ITC in terms of Rule 36(4) of the Central Goods and Services Tax Rules, 2017 to be done cumulatively for the months of April, May and June, 2021 in the return for the month of June 2021.
b.Facility of filing returns through EVC enabled instead of Digital Signature Certificate till August 31, 2021.
c.Time limit for completion of various actions by any authority or by any person under the CGST Act, which falls during the period April 15 to June 29, 2021 extended upto June 30, 2021 subject to specified exceptions.
d.Retrospective amendment in Section 50 of the CGST Act w.e.f. July 1, 2017 for payment of interest on net cash basis to be notified.
e.Amendments to be made in the CGST Act to make present system of filing of return in Form GSTR-1and Form GSTR-3B as default return filing system under GST.
Author – Indirect Tax Team