39th GST Council Recommendations on changes in Law & Procedures

The 39^th GST Council met under the Chairmanship of Union Finance & Corporate Affairs Minister Smt. Nirmala Sitharaman on 14th March 2020. Many long awaited issues are discussed and useful clarifications are recommended by Council.

The GST Council has made the following recommendations on Law & Procedures changes. Press release issued by the Ministry of Finance as below-

1. Interest for delay in payment of GST:  Interest under Section 50 of CGST Act for delayed payment of GST to be charged on the net cash tax liability w.e.f. 1st July 2017. It is observed in last few days that GST department issued notices for recovering Interest on Gross liability i.e. without considering the ITC and utilization thereof. Hence it is really a helpful recommendation and step forward to Stop litigation on the same issue by recommending retrospective amendment.

2. Revocation of cancellation of registration: Where registration have been cancelled till 14^th March 2020, the application for revocation of cancellation of registration can be filled up to 30^th June 2020 (extension of period of application as one-time measure to facilitate those who want to conduct business).

3. Annual Return: Relaxation to MSMEs from filing Reconciliation Statement in FORM GSTR-9C for the financial year 2018-19 having aggregate turnover below Rs. 5 crores.

Due date for filing the Annual return and the Reconciliation Statement for F.Y 2018-19 to be extended to 30.06.2020;

No Late fees to be levied for delayed filing of the Annual return and the Reconciliation Statement for financial year 2017-18 and 2018-19 for taxpayers with aggregate turnover less than Rs. 2 crores;

4. Basic Information on GSTN: New facility called ‘Know Your Supplier’ to be introduced so as to enable every registered person to have some basic information of the person with whom he wants to conduct business. Currently we can get only jurisdiction and Name and status of filing information through GST portal Search Taxpayer’s tab.

5. E-Invoicing: Certain class of person to be exempted from issuance of e-invoices or capturing dynamic QR-Code and implementation of QR-Code to be extended to 01.10.2020.

6. IGST on Import for Advance Authorization / EPCG/EOU and Deferment of e-wallet Scheme: Extension of exemption from payment of IGST and Cess on imports made under Advance Authorization / EPCG/EOU scheme up to 31st March 2021; Extension of the time to finalize e-Wallet scheme up to 31.03.2021.

7. New Returns: Current Return structure of filing of GSTR-1 and GSTR-3B returns shall continue till September 2020.

8. Clarification on Apportionment of ITC, Refund, Appeal and Corporate Debtor: Circular shall be issued to clarify apportionment of ITC, Appeal during non-constitution of Appellate Tribunal, refund related issues and regarding Corporate Debtors, etc.

9. Amendment to CGST Rules: CGST Rules shall be amended to

1. Ceiling to be fixed for the value of the export supply for the purpose of calculation of refund on zero rated supplies;

2. To allow for refund to be sanctioned in both cash and credit in case of excess payment of tax;

3. To provide for recovery of refund on export of goods where export proceeds are not realized within the time prescribed under FEMA; and

4. To operationalize Aadhaar authentication for new taxpayers.

5. Certain amendments to be carried out in the GST laws.

10. Physical verification of premises and Financial KYC: To curb fake invoicing and fraudulent passing of ITC, 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.

11. GST on Mobile: GST rate on Mobile Phones and specified parts presently attracting 12% to 18%. The recommendation of the Fitment Committee for calibrating the GST rate structure to correct the inverted duty structure on various items like Mobile phones, Footwear, Textiles and Fertilizers was placed before the GST Council for discussion. It is proposed to issue notifications giving effect to these recommendations of the Council on 01st April, 2020.

Copy of Press Release Notes issued by the Ministry of Finance can be viewed by clicking at the links provided below: