Weekly Updates [22 – 28 May, 2021 – 204th Week of GST]

The 43rd meeting of the GST Council was held on 28 May 2021 through video conferencing and The Council arrived at the following conclusions therein. Please note that being a recommendatory body, the Council can only recommend the changes, which would become effective only after the relevant notificiations are issued by the Government in this regard –

In order to provide relief during the ongoing pandemic situation, certain specified COVID-19 related goods such as medical oxygen, oxygen concentrators and other oxygen storage and transportation equipments, diagnostic markers test kits, vaccines etc. have been recommended for full exemption from IGST, even if imported for donating to the government or any relief agency (on recommendation of state authorities). This exemption shall be valid upto 31.08.2021. Please note that this exemption shall be applicable irrespective of whether the specified goods are imported on payment basis or free of cost. Further, the above exemption has also been extended to Amphotericin B on account of rising cases of Black Fungus in the country.A GoM has been consituted which shall submit its report on or before 08.06.2021 regarding further relief to be provided on COVID-19 related individual items.GST rate on DEC tablets has been recommended to be reduced to 5% from 12% on account of Lymphatic Filariasis elimination programCertain clarificatory amendments have been recommended in relation to GST rates on other goods and services as well, like –Leviability of IGST on repair value of goods re-imported after repairs.GST rate of 12% to apply on parts of sprinklers/ drip irrigation systems to apply even if these goods are sold separatelyTo clarify those services of serving of food, including mid-day meals under any midday meals scheme, sponsored by Government, being supplied to an educational institution inluding anganwadi (which provide pre-school education also), is exempt from levy of GST irrespective of whether such supplies are funded by government grants or corporate donationsTo clarify those services of exams, including entrance exams, where fee is charged for such exams, provided by NBE or similar Central/ State Education Boards and input services related thereto are exempt from GST.To make appropriate changes in the relevant notification for an explicit provision to make it clear that land owner promoters could utilize ITC of GST charged to them by developer promoters for such apartments that are subsequently sold by the land promoter and on which GST is paid. The developer promoter shall be allowed to pay GST on such apartments any time before or at the time of issuance of completion certificate.GST on MRO services in respect of ships/ vessels shall be reduced from 18% to 5%PoS of B2B supply of MRO services in respect of ships/ vessels would be the location of the recipient.To clarify that supply of service of milling of wheat/ paddy into flour/ rice to Government/ LA etc. for distribution of such flour/ rice under PDS is exempt if the value of goods in such composite supply does not exceed 25%. Otherwise, GST at the rate of 5% shall be levied on such services if supplied to any person registered in GST, including a person registered for payment of TDS.To clarify that GST is payable on annuity payments received as deferred payment for construction of road. The exemption is only for such annuities which are paid for the service of access to a road/ bridge.To clarify those services of construction of rope-way supplied to a Government Entity attract GST at 12%.To clarify that services of guaranteeing loans taken from banks and FIs, supplied by Govt to its undertaking/ PSU, is exempt.An amnesty scheme has been recommended to be provided to taxpayers in the form of reduction of late fee for non-furnishing of FORM GSTR – 3B for the tax periods from July, 2017 to April, 2021, if the same is filed between 01.06.2021 to 31.08.2021, as follows –Capping of late fees to ₹ 500 (₹ 250 CGST + ₹ 250 SGST) per return for taxpayers who did not have any tax liability for the said tax periods,Capping of late fees to ₹ 1000 (₹ 250 CGST + ₹ 250 SGST) per return for other taxpayersThe upper limit of late fee is being rationalized prospectively, to align the same with tax liability/ turnover, as follows, in order to reduce the burden of late fee on smaller taxpayers:The late fee for delay in furnishing FORM GSTR – 1/ 3B to be capped per return as below:Nil tax liability – ₹ 500 (₹ 250 CGST + ₹ 250 SGST)Other taxpayers –Having annual aggregate turnover in preceding year up to ₹ 1.5 crores – ₹ 2,000 (₹ 1,000 CGST + ₹ 1,000 SGST)Having annual aggregate turnover in preceding year between ₹ 1.5 crores to ₹ 5 crores – ₹ 5,000 (₹ 2,500 CGST + ₹ 2,500 SGST)Having annual aggregate turnover in preceding year above ₹ 5 crores – ₹ 10,000 (₹ 5,000 CGST + ₹ 5,000 SGST)The late fee for delay in furnishing FORM GSTR – 4 to be capped per return as below:Nil tax liability – ₹ 500 (₹ 250 CGST + ₹ 250 SGST)Other taxpayers – ₹ 2,000 (₹ 1,000 CGST + ₹ 1,000 SGST)The late fee payable for delay in furnishing FORM GSTR – 7 to be reduced to ₹ 50 (₹ 25 CGST + ₹ 25 SGST) per day and to be capped to ₹ 2,000 (₹ 1,000 CGST + ₹ 1,000 SGST).In addition to the relief measures already provided to the taxpayers in relation to COVID-19, the following further relaxations are being provided to the taxpayers:For small taxpayers (aggregate turnover up to ₹ 5 crores)for March, 2021 and April, 2021 –Interest shall be leviable at NIL rate for first 15 days from the due date of furnishing FORM GSTR – 3B/ PMT – 06 challan, 9% for the next 45 days and 30 days for March 2021 and April 2021 respectively.Late fee for delay in furnishing FORM GSTR – 3B for March 2021/ QE March 2021 and April 2021 shall be waived for 60 days and 45 days respectively from the due dates.Interest shall be leviable at NIL rate for first 15 days from the due date of furnishing CMP – 08 for QE March 2021 and 9% for next 45 days.for May, 2021 –Interest shall be leviable at NIL rate for first 15 days from the due date of furnishing FORM GSTR – 3B/ PMT – 06 challan, 9% for the next 15 days.Late fee for delay in furnishing FORM GSTR – 3B shall be waived for 30 days from the due date.For large taxpayers (aggregate turnover above ₹ 5 crores)Lower interest rate of 9% for first 15 days after the due date of filing FORM GSTR – 3B for May, 2021Late fee for delay in furnishing FORM GSTR – 3B for May, 2021 shall be waived for 15 days from the due date of furnishing FORM GSTR – 3B.Other relaxations –Extension of due date of filing FORM GSTR – 1/ IFF for May 2021 by 15 daysExtension of due date of filing FORM GSTR – 4 for FY 2020-21 to 31.07.2021Extension of due date of filing ITC – 04 for QE March 2021 to 30.06.2021Cumulative application of Rule 36(4) for availing ITC for April, May and Jun 2021 in the return for June, 2021.Allowing filing of returns by companies using EVC instead of DSC till 31.08.2021Time limit for completion of various actions by any authority/ person, under the GST Act, which falls during the period from 15 April 2021 to 29 June 2021 shall be extended upto 30 June 2021, subject to some exceptions.The amendments brought in by Finance Act, 2021 in Section 35 and 44 has been recommended to be notified. This would ease the compliance requirement in furnishing FORM GSTR – 9C, as taxpayers would be able to self-certify the same, instead of getting it certified by a CA. This change will apply for Annual Return for FY 2020-21.The filing of FORM GSTR – 9/ 9A for FY 2020-21 to be optional for taxpayers having aggregate annual turnover up to ₹ 2 crores.FORM GSTR – 9C for the FY 2020-21 will be required to be filed by taxpayers with annual aggregate turnover above ₹ 5 crores.Retrospective amendment in Section 50 of the CGST Act w.e.f. 01.07.2017, providing for payment of interest on net cash basis, to be notified at the earliest.Amendments in certain provisions of the Act has been recommended so as to make the present system of FORM GSTR – 1/ 3B return filing as the default return filing system in GST.

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