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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:

Description

Maximum amount of late fees

Late fees for non-furnishing of Form GSTR 3B for the period of July to April, 2021 for the taxpayers who do not have any Tax liability for the said period.

Rs. 500/- (Rs. 250 each for CGST & SGST)

Late fees for non-furnishing of Form GSTR 3B for the period of July to April, 2021 for other taxpayers.

Rs. 1000/- (Rs. 500 each for CGST & SGST)

Important Note: The reduced rate of late fee would apply if GSTR-3B returns for these tax periods are furnished between 01.06.2021 to 31.08.2021.

  • 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

 

Tax Liability / Turnover

Late filing fees

The late fee for delay in furnishing of FORM GSTR-3B and FORM GSTR-1

Nil Tax Liability in GSTR 3B

Rs. 500/- (Rs. 250 each for CGST & SGST)

Nil outward supply in GSTR 1

Rs. 500/- (Rs. 250 each for CGST & SGST)

Annual Aggregated Turnover up to 1.5 Crore

Rs. 2000/- (Rs. 1000 each for CGST & SGST)

Annual Aggregated Turnover between 1.5 Crore to 5 Crore

Rs. 5000/- (Rs. 2500 each for CGST & SGST)

Annual Aggregated Turnover above 5 Crore

Rs. 10000/- (Rs. 5000 each for CGST & SGST)

The late fee for delay in furnishing of FORM GSTR-4 by composition taxpayers

Nil Tax Liability

Rs. 500/- (Rs. 250 each for CGST & SGST)

For other tax payers

Rs. 2000/- (Rs. 1000 each for CGST & SGST)

Late fee payable for delayed furnishing of FORM GSTR-7

Minimum Late fees

Rs. 50/- (Rs. 25 each for CGST & SGST)

Maximum late fees

Rs. 2000/- (Rs. 1000 each for CGST & SGST)

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.

March & April 2021 tax periods for small taxpayers

GST Return Form

Period for relief

Relief given / reduction in the rate of interest

Form GSTR 3B / PMT-06 Challan

For first 15 days

Nil rate of interest

 

For 45 days for March, 2021

9% rate of interest

 

For 30 days for April, 2021

9% rate of interest

Delay in furnishing Form GSTR 3B

For 60 days for March / QE March, 2021

Waiver of late fees

 

For 45 days for April, 2021

Waiver of late fees

CMP-08 by composition dealers

For first 15 days for QE March, 2021

Nil rate of Interest

 

For 45 days for April, 2021

9% rate of interest

For May 2021 tax period for small taxpayers

Form GSTR 3B / PMT-06 Challan

For first 15 days

Nil rate of interest

 

For 15 days for May, 2021

9% rate of interest

Delay in furnishing Form GSTR 3B

For 30 days for May, 2021

Waiver of late fees

For May 2021 tax period for large taxpayers (aggregate turnover more than Rs. 5 crore)

FORM GSTR-3B

For first 15 days after the due date

9% rate of interest

Delay in furnishing Form GSTR 3B

For 15 days for May, 2021

Waiver of late fees

 

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.

 

Categories: Articles - GST GST
Dharti: Dharti Thakkar (B.Com, LLB) is a young, enthusiastic and intellectual Content Writer at Ebizfiling.com. She studied Law and after practicing as an Advocate for quite some time, her interest towards writing drew her to choose a different career path and start working as a Content Writer. She has been instrumental in creating wonderful contents at Ebizfiling.com !
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