Finance Minister Nirmala Sitharaman gave important information in a press conference after the 40th meeting of the GST Council. She said that the GST Council, the apex body which has decided on the Goods and Services Tax, discussed the effects of Covid-19. She further said that the inverted duty structure affecting GST collection was also discussed in the meeting.
#Highlights of GST council 40th meeting
1- Late fee relief to the taxpayers:
After the lockdown, major decisions have been taken in the interest of businessmen in the meeting of Goods and Services Tax (GST) Council. Union Finance Minister Nirmala Sitharaman said that in the period from July 2017 to January 2020, those who have not filed GST returns and who do not have any tax due will no longer have to pay any late fees on filing returns. The 40th meeting of the GST Council under the leadership of Finance Minister is taking place through video conferencing.
2- Less Fee on not filing of Monthly return:
In a media briefing after the GST Council meeting, the Finance Minister said that for July 2017 and January 2020, late fees for those who have tax liability will have to be paid a maximum of Rs 500 for not making monthly sales Return. At the same time, traders can file GST returns pending from 1 July to 30 September 2020.
3- Late fees waived and interest relief for MSME filers:
In the 40th GST council meeting, the FM said that small taxpayers with a total turnover of Rs 5 crore who will not file GST returns of February, March, and April 2020 till July 6, will be allowed to file returns with an annual interest rate of 9 percent by September. Earlier the interest rate was fixed at 18 percent. At the same time, such taxpayers will not have to pay late fees and interest in the event that they will fill GSTR-3B by September due to the supply being affected in the months of May, June, and July this year.
4- Deadline for cancellation of GST registration has been extended:
The period seeking repeal of canceled GST registration was allowed up to 30 September 2020 for all registrations that were canceled by 12 June 2020. As per the GST Act, there was a time limit of thirty days from the date of the issue of the canceled order.
5- Discussion on GST compensation to states:
Finance Minister Sitharaman said that a meeting would be called in July to discuss only one agenda - compensation cess. It is a compensation given to the states. The finance minister said that if the states had to pay compensation, it would somehow become a debt. The Finance Minister said that the Council has currently deferred any decision regarding the inverted duty structure. She said that there was no discussion about the reduction in the GST rate in the 40th GST Council meeting. She said that 45% of GST was collected in the last two months as compared to other months.
#Last meeting held on 14 March
In the last meeting of the GST Council held on 14 March, Sitharaman had said that the central government will look into the legal validity of the council to raise debt from the market to meet the compensation requirement. Under the GST Act, states have been guaranteed compensation for the first five years after the implementation of GST from July 1, 2017. The five tax slabs under the GST structure are 5, 12, 18, and 28 percent.
Late fees were exhausted in GSTR-3B returns
The central government has announced the elimination of fees on the delay in GSTR-3B returns to be filed from February 2020 to May 2020. Apart from this, the facility to file Nil GST returns with SMS is also provided. The biggest concern of the GST Council is the lack of GST collection. The council also has to give a large share of them to the states.