Highlights of 43rd GST Council Meeting dated 28th May, 2021

Looking for the updates of the 43rd GST Council Meeting? Here are the most important ones-

Introduction  

The 43rd GST Council meeting was held on 28th of May, 2021 under the chairmanship of Finance Minister Smt. Nirmala Sitharaman almost after 6 months through video conferencing in the National Capital. The meeting was also attended by Union Minister of State for Finance & Corporate Affairs Shri Anurag Thakur besides Finance Ministers of States & UTs and senior officers of the Ministry of Finance& States/ UTs. Let us have a look at the outcome of the 43rd GST Council Meeting Held on 28.05.2021.

The expectations and speculations were made that the GST Council in its 43rd meeting would discuss a reduction in the tax rate on COVID 19 medicines, vaccines along with the medical equipment as well as means to make up for the shortfall in revenues promised to states earlier.

No reduction in GST on vaccination and other medical equipment

• The GST on vaccination, ventilators and other COVID related drugs is paid by the Centre and the State Government and getting back to them as said by Tarun Bajaj.
• Reduction in the rate of GST does not give any benefit to the end user rather it will only benefit to the Private Hospitals only as the Government hospitals are providing all COVID related treatments free of cost.
• Finance Minister Nirmala Sitharaman added that “The main concern and interest of the Centre and the State/UT Government is to ensure that every person in India get vaccines in time and that the state get due share of revenue in time.”
• However, it has been decided the import of the medicines used for the treatment of the black fungus shall be exempted from the duty.
• Also, as decided by the GST Council, the waiver of IGST on free COVID-19 related supplies imported from abroad shall be continued till 31st August, 2021.
• As regards individual items, it was decided to constitute a Group of Ministers (GoM) to go into the need for further relief to COVID-19 related individual items immediately. The GOM shall give its report by 08.06.2021.
• GST rate on certain COVID 19 related medicines such as Diethylcarbamazine (DEC) tablets have been reduced from 12% to 5%.

GST Compensation to the State- same formula as last year to be adopted this year too

• The Government estimated the shortfall in GST Compensation payable to the States at Rs. 2.69 Lakh crore for the current Financial Year.
• Out of this 2.69 lakh, the centre will borrow 1.58 lakh crores and give it on to the states to make up for the shortfall in their revenues.
• Also, the council decided to hold a special session to consider the extension in the five-year GST shortfall compensation period beyond 2022.

Annual Return Filing will be optional for small taxpayers

• For the small taxpayers with turnover less than Rs 2 Crores, filing of Annual Return in from GSTR 9 / 9A will continue to be optional for the Financial year 2020-21.
• However, only the taxpayers with turnover of Rs. 5 Crores or more will have to file the Reconciliation Statements for 2020-21 in form GSTR 9C.
• Also, CGST will allow the self-certification of the Reconciliation Statements, there will be no need for the certification of the Chartered Accountants.

Amnesty Scheme for the small Taxpayers

• An Amnesty Scheme has been recommended by the GST Committee to provide relief to the small taxpayers by reducing the late fees payable by the small taxpayers and medium sized taxpayers.
• To provide relief to the taxpayers, late fee for non-furnishing FORM GSTR-3B for the tax periods from July, 2017 to April, 2021 has been reduced / waived as under:

• For this purpose the Group of Ministers will be formed who will examine and submit the report suggesting the need for further reduction on the GST rates and will decide the new rates in the exemptions.

Reduction in the late fees imposed under section 47 of the CGST Act

COVID 19 related reliefs to the taxpayer as decided in the 43rd GST Council Meeting

• Extension of due date of filing GSTR-1/ IFF for the month of May 2021 by 15 days.
• Extension of due date of filing GSTR-4 for FY 2020-21 to 31.07.2021.
• Extension of due date of filing ITC-04 for QE March 2021 to 30.06.2021.
• Cumulative application of rule 36(4) for availing ITC for tax periods April, May and June, 2021 in the return for the period June, 2021.
• Allowing filing of returns by companies using Electronic Verification Code (EVC), instead of Digital Signature Certificate (DSC) till 31.08.2021.
• Apart from the above mentioned reliefs, the following further relaxations are being provided to the taxpayers.

In the 43rd GST Council meeting it has also been recommended to make amendments in certain provisions of the Act so as to make the present system of GSTR-1/3B return filing as the default return filing system in GST.

All the eyes are now on the Group of Ministers (GoM) that has been formed just to examine and prepare a report on the further relaxation and reduced rates of GST on COVID related medicines and items. Let’s wait till 8th of June that is the deadline for the GoM to give the detailed report.

Hope this article was helpful. Refer to the topics discussed in the 42nd GST Council meeting followed by the extended meeting of 42nd GST Council Meeting.