GST Council’s Recommendation on GST Procedures

The all empowered GST Council (GSTC) had its 39^th meeting on 14^th March, 2020. The meeting deliberated with a three pronged focus, viz, changes in law and procedure for trade facilitation, GST rates rationalization and I.T. facilities. The GSTC also took certain decisions to defer the new facilities/utilities and/or extend the due dates and date of implementation of various utilities. Some of the major recommendations and decisions on implementation and procedural are enumerated hereunder:

(1) Interest for delay in payment of GST to be charged on net cash tax liability w.e.f. 01.07.2017 instead of gross tax liability (Law to be amended retrospectively).

This is one of the major relief to assessees who were subjected to recovery notices all over the country.

(2) Where registrations have been cancelled till 14.03.2020 by the department, application for revocation of cancellation of registration can be filled up to 30.06.2020 (extension of period of application as one-time measure to facilitate those who want to conduct business).

(3) In respect of annual return:

(a) Due date for filing the Annual return and Reconciliation Statement (9 and 9C) for Financial Year 2018-19 to be extended to 30.06.2020

(b) Relaxation to MSMEs from furnishing of annual return Reconciliation Statement in FORM GSTR-9C, for the financial year 2018-19, for taxpayers having aggregate turnover below Rs. 5 crores.

(c) Late fees not to be levied for delayed filing of the annual return and the Reconciliation Statement for financial years 2017-18 and 2018-19 for taxpayers with aggregate turnover less than Rs. 2 crores.

(4) Deferment of new Returns and E-invoicing (not from 1.4.2020 now):

(a) The proposed implementation of new return filing and E-invoicing has been extended from 1.4.2020 till 1st of October, 2020. The existing mechanism of filing return i.e. GSTR-3B and GSTR-1 shall, therefore continue till September, 2020.

(b) Further, certain class of registered persons (insurance company, banking company, financial institution, non-banking financial institution, GTA, passenger transportation service etc.) to be exempted from issuing e-invoices or capturing dynamic QR code.

(c) The date for implementation of e-invoicing and QR Code to be extended upto 1.10.2020.

(5) Extension of dates:

(a) Extension of the time to finalize e-Wallet scheme up to 31.03.2021.

(b) Extension of the present exemptions from IGST and Cess on the imports made under the AA/EPCG/EOU schemes up to 31.03.2021.

(c) The requirement of furnishing Form GSTR-1 for 2019-20 to be waived for taxpayers who could not opt for availing the option of special composition scheme under Notification No. 2/2019-Central Tax (Rate) dated 07.03.2019 by filing Form CMP-02.

(d) Extension of due dates for Form GSTR-3B for the month of July, 2019 to January, 2020 till 24th March, 2020 for registered persons having principal place of business in the Union territory of Ladakh. Similar extension has also been recommended for Form GSTR-1 & FORM GSTR-7.

(6) Other changes :

(a) A special procedure is being 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, so as to enable them to comply with the provisions of GST Laws during the CIRP period.

(b) Bunching of refund claims allowed across financial years to facilitate exporters.

(c) Seeking information return from banks.

(d) A new facility called ‘Know Your Supplier’ to be introduced so as to enable every registered person to have some basic information about the suppliers with whom they conduct or propose to conduct business.

(e) To curb practice of 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. 

It appears that with the above proposals, GST Council is more keen on improving the technical and procedural glitches to have smooth in GST implementation, for the time being.

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