(Last Updated On: March 17, 2020)
The 39th GST Council meeting was held on March 14, 2020. The GST Council has taken several decisions which include measures related to facilitation of trade, deferment of e-invoice and e-wallet scheme, amendments to GST rules, GST rate changes in case of certain goods and services and several other initiatives proposed.
Infosys also submitted suggestions for smooth rollout of the new return filing system and to address the system related issues that are currently being faced by the taxpayers on the GST portal.
The recommendations shall come into effect on issuance of relevant circulars or notifications by the Central Government. The highlights of the key recommendations of the 39th GST Council meeting are enumerated below:-
| 1. | | Interest on Net Cash Liability |
| | Interest for delay in payment of GST to be charged on the net cash tax liability basis, which means that interest shall not be charged on ‘ITC component’. This shall be made effective retrospectively w.e.f. 1-7-2017. |
| 2. | | Application for Revocation of Cancellation of Registration |
| | Cases where registrations have been cancelled till 14-3-2020, application for revocation of cancellation of registration can be filled up to 30-6-2020. This extension of period to apply for revocation of cancellation of registration is the one-time measure in order to facilitate taxpayers who want to continue with their businesses. |
| 3. | | Annual Return & Reconciliation Statement |
| | Following decisions were made in respect of filing of Annual Return and Reconciliation Statement: |
| ♦ | | Relaxation to be granted to taxpayers having aggregate turnover below Rs. 5 crores from furnishing of Reconciliation Statement in Form GSTR-9C for the F.Y. 2018-19. |
| ♦ | | Extension of due date for filing the Annual return and the Reconciliation Statement for F.Y. 2018-19 to 30-6-2020. |
| ♦ | | Waiver of late fees for delayed filing of the Annual return and the Reconciliation Statement for F.Y. 2017-18 and F.Y. 2018-19 for those taxpayers having aggregate turnover of less than Rs. 2 crores. |
| 4. | | Requirement to furnish GSTR-1 waived off in special cases |
| | The requirement of furnishing Form GSTR-1 for F.Y. 2019-20 to be waived for taxpayers who could not avail of the option of special composition scheme as per Notification No. 2/2019-Central Tax (Rate) dated 7-3-2019 by filing Form CMP-02. |
| 5. | | Extension of due dates of returns for specified persons |
| | For registered persons having principal place of business in the Union territory of Ladakh, the due date of filing Forms GSTR-3B, GSTR-1 and GSTR-7 for the period July, 2019 to January, 2020 to be extended till 24-3-2020. |
| 6. | | E-invoice & QR Code |
| | The implementation of e-invoicing and QR Code to be extended to 1-10-2020. It was also suggested that certain class of registered persons such has insurance company, banking company, financial institution, non-banking financial institution, GTA, passenger transportation service, etc., be exempted from issuing e-invoices or capturing QR Code. |
| 7. | | Continuation of existing return filing system |
| | Existing system of furnishing returns in Form GSTR-1 and Form GSTR-3B to be continued till September, 2020. This means that the new return filing system will be implemented from October, 2020. |
| 8. | | Refund claims |
| | Bunching of refund claims spread across different financial years will be allowed in order to facilitate exporters. |
| 9. | | Rate related changes |
| | The following are the rate related revisions suggested by the GST Council: |
| ♦ | | Increasing the GST rate on Mobile Phones and specified parts to 18% from the present 12%. |
| ♦ | | GST rate on all types of matches including handmade matches and other than handmade matches to be rationalised to uniform rate of 12%. |
| ♦ | | GST rate on Maintenance, Repair and Overhaul (MRO) services in respect of aircraft to be reduced from 18% to 5% with full ITC. Further, place of supply for B2B MRO services to be changed to the location of recipient. This change will assist in setting-up of MRO services in India. |
| 10. | | Other Recommendations |
| | Other important recommendations made by the GST Council are as follows: |
| ♦ | | Restrictions to be imposed on passing of the ITC in case of new GST registrations before physical verification of premises and Financial KYC of the registered person. This action is proposed to curb the menace of fake invoicing and fraudulent passing of ITC. |
| ♦ | | Exemptions from IGST and Cess on the imports made under the AA/EPCG/EOU schemes to be extended up to 31-3-2021. |
| ♦ | | A special procedure to be prescribed for registered persons who are corporate debtors under the provisions of the Insolvency and Bankruptcy Code, 2016 and are undergoing the corporate insolvency resolution process. The procedure will enable such registered persons to comply with the provisions of GST Laws during the CIRP period. |
| ♦ | | A new facility called ‘Know Your Supplier’ to be introduced. This facility will provide every registered person basic information about the suppliers with whom they conduct or propose to conduct business. |
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