Highlights of 43rd GST Council Meeting held on 28th May 2021

1. The land owner promoters could utilize credit of GST charged to them by developer promoters in respect of such apartments that are subsequently sold by the land promoter and on which GST is paid. The developer promoter shall be allowed to pay GST relating to such apartments any time before or at the time of issuance of completion certificate.

2. Exemption on Covid Related Items extended up to 31st August, 2021

Sr HSN Chapter Code Item Name Existing Rate Revised Rate
1 2804 Medical Oxygen 12%
2 9018 Oxygen Concentrators 12%
3 30 Test Kits 5%
4 3002/3006 Covid 19 Vaccine 5%
5 2941/42 Amphotericin B 18%
6 3004 Diethylcarbamazine 12% 5%

The Council has clarified a number of issues, which are provided hereunder:

3. GST rate of 12% to apply on parts of sprinklers/ drip irrigation systems falling under tariff heading 8424 (nozzle/laterals) to apply even if these 2 goods are sold separately.

4. Services supplied to an educational institution including aanganwadi (which provide pre-school education also), by way of serving of food including mid-day meals under any midday meals scheme, sponsored by Government is exempt from levy of GST.

5. The services provided by way of examination including entrance examination, where fee is charged for such examinations, by National Board of Examination (NBE), or similar Central or State Educational Boards, and input services relating thereto are exempt from GST.

6. Earlier, the government had reduced the GST Rate on MRO Services in relation to an Aircraft from 18% to 5%. Now, in order to provide level playing field to the domestic shipping MROs vis a vis foreign MROs.

  • GST Rate on MRO Services in respect of Ships/Vessels shall be reduced to 5% from 18%.
  • In case of B2B Transactions, Place of Supply of Services would be the location of recipient of service.

7. Service by way of milling of wheat/paddy into flour (fortified with minerals etc. by millers or otherwise) /rice to Government/ local authority etc. for distribution of such flour or rice under PDS is exempt from GST if the value of goods in such composite supply does not exceed 25%. Otherwise, such services would attract GST at the rate of 5% if supplied to any person registered in GST, including a person registered for payment of TDS.

8. GST is payable on annuity payments received as deferred payment for construction of road. Benefit of the exemption is for such annuities which are 3 paid for the service by way of access to a road or a bridge.

9. Services supplied to a Government Entity by way of construction of a rope-way attract GST at 18%.

10. Services supplied by Govt. to its undertaking/PSU by way of guaranteeing loans taken by such entity from banks and financial institutions are exempt from GST.

Trade Facilitation Measures

1. Amnesty Scheme to provide Relief to taxpayers regarding late fee for pending returns:

Fresh Amnesty Scheme has again been provided by the government so as to encourage the taxpayers to come forward and file their pending GST Returns.

Type of Taxpayers Max Late Fee Payable per Return Remarks
No Tax Liability 500 Benefit of Amnesty Scheme will be available if the pending GST Returns are filed between 01.06.21 to 31.08.21.
Other Taxpayers 1000

2. Rationalization of Late Fees imposed under Section 47 of the CGST Act, 2017

To reduce burden of late fee on smaller taxpayers, the upper cap of late fee is being rationalized to align late fee with tax liability/ turnover of the taxpayers, as follows:

Category Maximum Late Fees for GSTR 3B Maximum Late Fees for GSTR 1
Nil Tax Liability 500 500
Other Tax Payers
a. Annual Aggregate Turnover is up to Rs. 1.5 Crores 2,000 2,000
b. Annual Aggregate Turnover is between Rs. 1.5 Crores to 5 Crores 5,000 5,000
c. Annual Aggregate Turnover above Rs. 5 Crores 10,000 10,000

3. Late Fees for Other Returns are also being rationalized.

Type of Return Applicable to Whom? Maximum Late Fees
GSTR – 4 – Nil Tax Liability Composition Taxpayers 500
GSTR – 4 – Others Composition Taxpayers 2,000
GSTR 7 E Commerce Operators Rs. 50 / day, subject to maximum Rs. 2,000

Note: It must be noted that the reduced late fees as recommended above would be applicable for prospective periods, after the issuance of Notifications by the government. There will be no change in the late fees already paid by taxpayers and collected by government for delay in filling of above forms.

Relaxation in Interest and Late Fees for March, April and May 2021

Category of Taxpayer Period Late Fees Interest
Small Taxpayers having turnover up to Rs. 5 Crores March 2021 Waiver of Late Fees for delay in furnishing GSTR 3B for 60 days from the due date.
  • Nil Interest for first 15 days from the due date
  • 9% Interest Rate from 16th to 45 days from the due date.
April 2021 Waiver of Late Fees for delay in furnishing GSTR 3B for 45 days from the due date.
  • Nil Interest for first 15 days from the due date
  •  9% Interest Rate from 16th to 30 days from the due date.
May 2021 Waiver of Late Fees for delay in furnishing GSTR 3B for 30 days from the due date.
  • Nil Interest for first 15 days from the due date
  • 9% Interest Rate from 16th to 30 days from the due date.
  • Nil Rate of Interest for first 15 days from the due date
  • 9% Rate of Interest up to 45 days from the due date
Large Taxpayers May 2021 Waiver of Late Fees for delay in furnishing GSTR 3B for 15 days from the due date.
  • 9% Interest for first 15 days after the due date
  • 9% Interest Rate from 16th to 30 days from the due date.

Filling of Annual Return in GSTR 9 and Reconciliation Statement in GSTR 9C

Category GSTR 9 GSTR 9C
Turnover up to Rs. 2 Crores Optional Optional
Turnover between Rs. 2 Crores to Rs. 5 Crores Yes Optional
Turnover more than Rs. 5 Crores Yes Yes

From FY 2020–21 onwards, the Reconciliation Statement in Form GSTR 9C will be self-attested by the taxpayer, instead of getting it certified by a chartered accountant.

Other Measures

Relaxations under section 168A of the CGST Act

  • Time limit for completion of various actions, by any authority or by any person, under the GST Act, which falls during the period from 15th April, 2021 to 29th June, 2021, to be extended up to 30th June, 2021, subject to some exceptions. [Wherever the timelines for actions have been extended by the Hon’ble Supreme Court, the same would apply].
  • Retrospective Amendment in Section 50 of theCGST Act, 2017, providing for interest on net cash liability to be notified at the earliest.
  • Certain provisions of the Act will be amended so as to make the present system of GSTR 1 / GSTR 3B return filling as the default return filling system.

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