40th GST Council Meeting

The 40th GST Council meeting was held under the Chairmanship of Union Finance & Corporate Affairs Minister Smt. Nirmala Sitharaman through video conferencing on Friday, 12th June 2020.

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 important recommendations on Law & Procedures changes.

1. Measures for Trade facilitation:

   a. Reduction in Late Fee for past Returns:

   As a measure to clean up pendency in return filing, late fee for non-furnishing FORM GSTR-3B for the tax period from July, 2017 to January, 2020 has been reduced / waived as under: –

   i. NIL late fee if there is no tax liability;
   ii.
   Maximum late fee capped at Rs. 500/- per return if there is any tax liability.

   The reduced rate of late fee would apply for all the GSTR-3B returns furnished between 01.07.2020 to 30.09.2020

   b. Further relief for small taxpayers for late filing of returns for February, March & April 2020 Tax periods:

   For small taxpayers (aggregate turnover up to Rs. 5 crore), for the supplies effected in the month of February, March and April, 2020, the rate of interest for late furnishing of return for the said months beyond specified dates (staggered up to 6th July 2020) is reduced from 18% per annum to 9% per annum till 30.09.2020. In other words, for these months, small taxpayers will not be charged any interest till the notified dates for relief (staggered up to 6th July 2020) and thereafter 9% interest will be charged till 30.09.2020.

   c. Relief for small taxpayers for subsequent tax periods (May, June & July 2020):

   In wake of COVID-19 pandemic, for taxpayers having aggregate turnover up to Rs. 5 crore, further relief provided by waiver of late fees and interest if the returns in FORM GSTR-3B for the supplies effected in the months of May, June and July, 2020 are furnished by September, 2020 (staggered dates to be notified).

   d. One time extension in period for seeking revocation of cancellation of registration:

   To facilitate taxpayers who could not get their cancelled GST registrations restored in time, an opportunity is being provided for filing of application for revocation of cancellation of registration up to 30.09.2020, in all cases where registrations have been cancelled till 12.06.2020.

2. Certain clauses of the Finance Act, 2020 amending CGST Act 2017 and IGST Act, 2017 to be brought into force from 30.06.2020.

   Summary

   Decisions of 40th GST Council Meeting held on 12th June 2020

   GST Return	Tax Period	Condition	Late Fee
   GSTR-3B	July, 2017 to January, 2020	GSTR 3B furnished between 1.07.2020 to 30.09.2020	NIL(If there is no tax liability)
   			Maximum late fee capped at Rs. 500/- per return (If there is any tax liability.)
   GSTR-3B	May 2020 June 2020 July 2020	Taxpayers having aggregate turnover up to Rs. 5 crore And GSTR 3B is furnished by September, 2020	No Late Fee and Interest

   GST Return	Condition	Tax Period	Due Date	Rate of Interest for delay in filling GSTR 3B
   As per Notification No.31/2020-Central Tax dated 3rd April 2020
   GSTR-3B	Taxpayers having aggregate turnover more than 1.5 crore and up to Rs. 5 crore	February 2020	29th June 2020	9% p.a if GSTR 3B Filed after 29th June 2020 but within 30th September 2020
   		March 2020	29th June 2020	9% p.a if GSTR 3B Filed after 29th June 2020 but within 30th September 2020
   		April 2020	30th June 2020	9% p.a if GSTR 3B Filed after 30th June 2020 but within 30th September 2020
   GSTR-3B	Taxpayers having aggregate turnover up to 1.5 crore	February 2020	30th June 2020	9% p.a if GSTR 3B Filed after 30th June 2020 but within 30th September 2020
   		March 2020	3rd July 2020	9% p.a if GSTR 3B Filed after 3rd July 2020 but within 30th September 2020
   		April 2020	6th July 2020	9% p.a if GSTR 3B Filed after 6th July 2020 but within 30th September 2020

   Highlights from Press Meeting of Union Finance & Corporate Affairs Minister Smt. Nirmala Sitharaman through video conferencing

   Correction of the Inverted Tax Structure

   FM told that there is an issue of less tax revenue and excess refund being granted for accumulated ITC due to inverted tax structure and every minister agreed that that there is a need to correct. Although a unanimity was achieved over the matter, the same has been postponed to the future meeting as a decision could not be taken at this point in time as it is not the time to correct the rates. An elaborate discussion happened about the issue pertaining to only the textile industry. However, sectors such as footwear and fertilisers could not be taken up for discussion.

   Discussion on GST Compensation to states and UTs

   FM told that in July 2020 there shall be a meeting to discuss exclusively one-agenda point i.e. Compensation Cess. Compensation which has to be given to states and if at all it results in to a borrowing how and who is going to pay it, will be taken up in a special council meeting for which the dates will be decided.

   Rate Rationalisation of some goods Postponed

   FM told that the UP has been asking for rates on certain items like brick kilns and pan masala related items. FM has assured of taking up the matter in the next regular GST Council meeting.

   Encl:

   • Press release
   • Agenda Volume 1, Agenda Volume 2, Agenda Volume 3, Agenda Volume 4
   • Minutes of the Meeting
   • https://youtu.be/8s6LxUKcAuU