The 49th meeting of the GST Council was held on 18th February 2023, press release has of the same is also released , but on some issues, more than what is in the press release, has been said in the press conference of the Hon. Finance Minister, such as the GST Appellate Tribunal and its structure. The facts and statements given in the press conference in this respect are very important.
In this 49th meeting, some of the decisions are made directly benefitting or affecting the Tax Payers have been made especially related to reduction of late fee for late filing of annual return of GST regular dealers for Financial Year 2022-23 onwards, Amnesty scheme for waiver or reduction of late fee for non-filing of annual return of regular and composition dealers of previous years , extension of time for submission of application for revocation of cancelled registration, extension of time for filing return for cancellation of tax assessment made on the basis of best judgement, amnesty for revocation of already cancelled registration.
The rate of tax has been reduced on some commodities, but these are very few , which we will discuss further, but it is surprising that the rate of tax on items like “pencil sharpener” has been reduced after discussion in the council. Good one , at least the children will be happy with this decision . Apart from this, the rate of tax on “Raab” – Liquid Jaggery has been reduced.
But the important thing is that the matter of reducing the tax rate of cement has not yet come up in the fitment committee and this is a very disappointing news. Among vehicles, the fitment committee is yet to come to a decision on whether MUVs should be taxed at par with SUVs. There is no consensus yet on online gaming tax.
For pan masala, gutka and tobacco, the recommendations of the Group of Ministers- GOM have also been accepted, in which the main is that capacity dependent tax system will not be introduced, arrangements like “tracking measures” to prevent tax evasion and tax leakage and export of these items will be done based on “LUT” only etc. To collect compensation cess on these items at the first stage, the proposal to change the system of levy according to the value-based taxation will be replaced by specific duty and it will go from “Ad valorem to Specific Duty.”
In order to fulfil the promise of GST compensation to the states, the finance minister has told that a large part of it has been paid and the rest of those states whose AG certificates have not come, they will also be paid after the receipt of these certificates. . The withheld amount is only 10 percent and 90 percent amount has been paid to all the states.
It is specially mentioned here that despite there being no money in the Compensation Fund of the Central Government, this amount is being paid from the Common Fund, which will be recovered from the collection of “Compensation Cess” in coming time.
Let us look at some of the main decisions in details taken in the 49th GST council meeting and what is declared in the Press conference of the Hon. Finance Minister:-
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1. |
REDUCTION IN LATE FEE FOR ANNUAL RETURNS – FOR RETURNS FOR THE FINANCIAL YEAR 2022-23 ONWARDS
The late fee for filing GSTR-9 has been reduced. This reduced late fee will be applicable for the financial year 2022-23 and subsequent years. The reduction of late fees is being made for the dealers having turnover up to Rs. 20 Crores. Let us have a look at this two-stage reduction in the Late fees. Those who are regular dealers and whose turnover is up to Rs 5 crore, their annual return GSTR-9 late fee will be Rs 50 per day, Subject to maximum up to 0.04 percent of the total turnover. For regular dealers whose annual turnover is more than Rs 5 crore but up to Rs 20 crore, this late fee will be Rs 100 per day, Subject to maximum up to 0.04 percent of the total turnover. On turnover above Rs. 20 crores, the present normal late fee which is going on now will be applicable as it is and there is no reduction on the dealers having turnover above Rs. 20 Crores. At present this late fee is Rs. 200 per day subject to maximum 0.5% of the total annual turnover and now it will only be applicable on the dealers whose turnover is More than Rs. 20 Crores. |
| 2. | CONDITIONAL AMNESTY SCHEME FOR ARREAR ANNUAL RETURNS
A conditional waiver or reduction in late fees will be there with respect of Annual Returns viz. GSTR-9 (Regular Dealers), GSTR-4 (Composition Dealers) and GSTR-10 (Final Return after Cancellation of Registration) for the previous years which have not yet been filed . The amnesty will soon be there for these dealers who failed to furnish these returns for the period up to Financial Years 2021-22 . You will remember that GSTR-4 of composition dealers was left out in the previous amnesty scheme and this GSTR-4 will also be included in current amnesty, so let’s wait for this amnesty scheme and its declaration one can found how much relief is given. |
| 3. | RELIEF IN REVOCATION THE CANCELLATION OF REGISTRATION
At present, the application for revoking the cancelled registration have to be made within 30 days. This time is now being increased from 30 days to 90 days and even after lapse of this 90 days, the commissioner or the officer authorized by him will have the power to extend this time up to 180 days. Such change will be done by amending section 30 and rule 23 of the CGST Act, 2017. AMNESTY FOR OLD CANCELLED REGISTRATIONS Let us now see what relief is being given to those whose registrations have been cancelled due to non-filing of returns and the time to get them revoke again has already passed and we can term as Old Cancelled Registrations. All these dealers having these old cancelled registrations (Due to non-filing of returns) will now be given a “due date” where an application can be made to regularize these cancelled registrations with certain conditions. |
| 4. | TIME TO CANCEL BEST JUDGMENT ASSESSMENT IS BEING EXTENDED AND AMNESTY IS BEING BROUGHT FOR OLD CASES
An amendment is also being made in section 62 of the GST law. This section deals with decisions taken on the basis of best judgment on non-filing of returns. At present , if the outstanding returns are filed within 30 days from the date of service of this order, then the assessment made based on best judgment automatically gets cancelled. Now this time is being extended to 60 days, which can be extended for another 60 days with certain conditions. AMNESTY FOR OLD BEST JUDGEMENT ASSESSMENT In cases where orders have been made as per the best judgment but even after lapse of stipulated time related returns could not be filed by the dealer. We can term these assessee as old best judgement Assessments. An amnesty scheme is also being brought for them, according to which returns with interest and late fees will be filed till a “specific due date” with certain conditions. In this regard, keep in mind that whether or not an appeal has been filed in such cases or whether the appeal has been decided or not, it will not make any difference and this amnesty will be available in all these cases. |
| 5. | REDUCTION IN TAX RATE ON CERTAIN ITEMS
It has also been decided to revise the tax rates on some items like – tax rate on pencil sharpener from 18 percent to 12 percent. Apart from this, 5 percent tax rate is being imposed on Liquid Jaggery- “Rab” instead of 18 percent when it is packed and labelled. If it is not packed and labelled, then this liquid jaggery- Rab will be tax free. Apart from this, due to confusion, the tax that has been paid on “Raab” till now will be considered as correct. |
| 6. | THE SCOPE OF EXEMPTION FROM GST ON FEES FOR ENTRANCE EXAMINATIONS IS INCREASED
The scope of exemption on fees charged for entrance examinations has been further extended and now it includes all types of authorities and boards established by the Central and State Governments, including the National Testing Agency, for conducting entrance examinations in educational institutions. Now GST will not be levied on the fees charged for the examination conducted by these authorities as mentioned above. Keep in mind that till now this exemption was available to educational institutions, state, and central education boards, now its scope is being extended to give relief to the more students. |
| 7. | ANOTHER STEP TOWARDS SET UP OF APPELLATE TRIBUNAL
One more step has been taken for establishment of GST Appellate Tribunal and the Council has given its consent, with some changes to the report of the Group of Ministers- GOM presented for it. It was informed in the press conference that there will be only one tribunal which will be in New Delhi and it will have benches in the states. As for the number of members in the tribunal, it has been told in the press conference itself that there will be 4 members in the tribunal, out of which 2 will be judicial members and 2 will be technical members. Of the technical members, 1 shall be from CGST and 1 from SGST to complete the proper representation. How many benches of the tribunal will be there in a state, the states will decide considering the need of their trade and Industry and in this way, there can be more than one bench in a state and in the same way if the states are small, as are the states of the North East, there can be only one bench for more than one state. The states will give their reports as per their requirement in this respect and then for this they will have to take consent from the GST Council. Now, for the time it will take for the establishment of the tribunal and the work to start, the finance minister has told that the report she has received from the group of states will be sent to the states immediately with some changes and they will have to prepare the final draft in 7 days and returned to the council. After this the whole process will be completed in such a way that it can be placed along with the Finance Bill in the first week of March. The continuous and long delay in the establishment of the tribunal was a serious matter, now it seems that this will be another step towards the establishment of much awaited GST Appellate Tribunals , but it remains to be seen how much time is now more needed for actual starting of work at these tribunals in practice . |
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