43rd GST Council Meeting: Vital Decisions

Highlights of 43rd Meeting of the GST Council

1) Many *COVID-19 related goods have been recommended for full exemption from IGST till 31.08.21* 

2) Group of Ministers (GoM) to review  need for further relief to COVID-19 related items

3) Amnesty Scheme to provide relief to taxpayers regarding *late fee for pending returns for GSTR3B for the tax periods from July, 2017 to April, 2021* as under if returns filed by 31.08.2021.

a. *No Tax liability* - late fee capped to a maximum of *Rs 500/-* per Return

b. *Others *- late fee capped to a *maximum of Rs 1,000/-* per Return

4) *Reduction of Late Fees* for future periods per Return

a. Nil Tax Liability  in GST3B or no outward Supply in GSTR1 - *ate fee to be capped at Rs 500/-*

b. Other Cases – For Taxpayers having turnover

i. Upto Rs.1.5 cr – Max Rs.2,000/-

ii. 1.5 Cr - 5 Cr – Max 5,000/-

iii. Above 5 Cr – Max 10,000/-

c. GSTR4 – If nil tax liability – Rs.500/- & others Rs.2,000/-

5) *Extension in due dates for filing returns for March – May 2021* and reduction in Interest rates for delay in payment of Tax

6) *Annual Return to be simplified* as there is no need for GST Audit for FY 2020-21

7) *New Amendment in Real Estate:* In case of Joint Development of Apartments,  GST paid  by Land owner  to the Builder for his share of flats in the project, can be availed as ITC if flat is sold by the land owner & GST paid.

8) Certain clarifications/ amendments have been recommended in relation to GST rate for few other goods and services.  

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IThe 43rd GST Council chaired by Finance Minister Nirmala Sitharaman made a vital decisions as follows:

1.  GST Exemption to some COVID-19 supplies till 31st August 2021:

GST rates for covid vaccination maintained at 5%; zero rate for COVID-19 related products ruled out.

GST Council likely to meet again iiiin a few days to consider further GST rate cuts on Covid related material.

Further, GST rate cut was proposed for medical grade oxygen, oxygen concentrators, pulse oximeters, Covid testing kits.

2. A Particular Medicine for Black Fungus also exempted GoM to be formed to check if further reductions to be given to new items, GoM to submit reports before 8th June 

3. Amnesty Scheme with reduced late fee to be launched for GST Small Taxpayers :

To provide relief to small taxpayers, amnesty scheme has been recommended for reducing late fee To benefit around 89% of GST taxpayers, they can file pending returns, avail benefits of scheme, with reduced late fees.

4. Rationalization of Late fee for Small Taxpayers to be applicable to future liabilities:

Late fees have also been rationalized Maximum amount of late fee has been reduced; will come into effect from future tax periods This will provide long-term relief for small GST Taxpayers

5. Annual Return form to be rationalized, Govt to amend CGST Rules 

6. Annual Return filing to continue to be optional for Small Taxpayers :

Annual Return Filing will continue to be optional for 2020-21, for small Tax payers with turnover less than Rs. 2 Crore Reconciliation statements for 2020-21 to be furnished by taxpayers with turnover of Rs. 5 Crore or more

7. A Special Session on GST Compensation Cess before 22nd July 2021:

On GST compensation cess, same formula as last year to be adopted this year too Rough estimate is that Centre will have to borrow Rs. 1.58 Lakh Crore and pass it on to States.