The 39th GST Council meeting was held today i.e. 14th March 2020 at Vigyan Bhawan, New Delhi. The meeting was chaired by the Finance Minister Nirmala Sitharaman. Tax practitioners and taxpayers had high expectations from the 39th GST Council Meeting as the meeting was held just two weeks before the due date for Annual Return Filing for FY 2018-19 and the implementation of the New GST Return System. The GST Council in its 39th meeting announced that due date to file GSTR 9 and 9C for FY 18-19 will be extended till 30th June 2020.Here are the key decisions taken:
1. Interest to be charged on net cash liability with effect from 1/07/2017
The FM in her budget speech had proposed that the interest collection will be on Net Gst Liability and the Section 50 of the CGST Act will be amended. However later the clarification from CBDT came that interest collection will continue to be collected on the Gross GST payment till the amendment is made with a prospective effect. Taxpayers had raised concerns on the same, the GST Council in its 39th meeting announced that Interest on late GST liability to be charged on net cash liability with effect from 1/07/2017
2. The new return system has been deferred until the end of July.
The New GST Return was scheduled to be implemented from the 1st of April 2020, it's implementation has been delayed keeping in mind the technical inefficiencies until the end of July. The FM said that the meeting started with the address of Neelkani who told that the New Return System is not yet ready. The FM also told that INFOSYS will give a presentation in every council meeting to ensure that the glitches in the portal are dealt with.
3. Late fees not be levied for the late filing of GSTR 9 and 9C for FY 17-18 and 18-19:
GST Council announced that late fees not be levied for the late filing of GSTR 9 and 9C for FY 17-18 and 18-19 for taxpayers with turnover less than Rs 2crore.
4. Where registrations have been cancelled till 14.03.2020, application for revocation of cancellation of registration can be filled up to 30.06.2020 (extension of period of application as one-time measure to facilitate those who want to conduct business
5. Relaxation to MSMEs from filing reconciliation statement for FY 18-19:
The Council has decided to give relaxation to MSMEs from filing reconciliation statement for FY 18-19 for all taxpayers having aggregate turnover below Rs 5crore
6. Continuation with the present system of GSTR 3B and GSTR-1 till September.
7. GST rates on mobile phones raised to 18%
For correction in inverted duty structure the GST rates on mobile phones has been increased to 18%. The rate calibration is due to accumulation of ITC since rate of Inputs are higher than the rates of output (Mainly due to Input Service and Capital Goods which are taxed at 18%).
8. The requirement of furnishing FORM GSTR-1 for 2019-20 to be waived for taxpayers who could not opt for availing the option of special composition scheme under notification No. 2/2019-Central Tax (Rate) dated 07.03.2019 by filing FORM CMP-02.
9. Deferment of E-invoice and QR Code to 1/10/2020:
Certain class of registered persons (insurance company, banking company, financial institution, non-banking financial institution, GTA, passenger transportation service etc.) to be exempted from issuing e-invoices or capturing dynamic QR code; and
b. The dates for implementation of e-invoicing and QR Code to be extended to 01.10.2020.
10. Other decisions:
-GST rate on hand made and machinery made matches(matchsticks) kept the same at 5%
- GST rate on MRO services in respect to aircraft reduced to 5%
- A new facility called ‘Know Your Supplier’ to be introduced so as to enable every registered person to have some basic information about the suppliers with whom they conduct or propose to conduct business.
11. Issuance of circulars in respect of:
a. Clarification in apportionment of ITC in cases of business reorganization under section 18 (3) of CGST Act read with rule 41(1) of CGST Rules;
b. Appeals during non-constitution of the Appellate Tribunal;
c. Clarification on refund related issues; and
d. Clarification on special procedure for registered persons who are corporate debtors under the provisions of the Insolvency and Bankruptcy Code, 2016, undergoing the corporate insolvency resolution process.
12. Amendments to the CGST Rules: Key amendments are as below:
a. Procedure for reversal of input tax credit in respect of capital goods partly used for affecting taxable supplies and partly for exempt supplies under rule 43 (1) (c);
b. ceiling to be fixed for the value of the export supply for the purpose of calculation of refund on zero rated supplies;
c. to allow for refund to be sanctioned in both cash and credit in case of excess payment of tax;
d. to provide for recovery of refund on export of goods where export proceeds are not realized within the time prescribed under FEMA; and
e. to operationalize Aadhaar authentication for new taxpayers.
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