Key takeaways from GST Council 38th Meeting held on 18th December 2019

Vidya Khanna

Rates & Exemption changes

1. 28% GST to be levied for both state run and state authorized lotteries from 01^st March 2020:

Till now there are 2 rates notified on lotteries under Rule 31A of CGST Rules 2017, these are:-

a) 12% on lotteries run by the organizing states

b) 28% on lotteries authorized by organizing state

2. Rationalize rates on Woven and non-woven bags and sacks of polyethylene or polypropylene strips or the like, whether or not laminated, of a kind used for packing of goods which fallunder HSN 3923 or 6305 – will have uniform rate of 18% from 12% on all bags falling under HSN 3923 or 6305 including Flexible intermediate bulk containers (FIBC) to be effective w.e.f 01^st Jan 2020.

3. To be Effective from 01^st Jan 2020, a Variation in Exemption under Heading 9972 issued under Notification no. 12/2017- CT(R ) dated 28.06.2017 substituted by Notification No. 32/2017-Central Tax (Rate), dated 13-10-2017:

“Upfront amount (called as premium, salami, cost, price, development charges or by any other name) payable in respect of service by way of granting of long term lease (of thirty years, or more) of industrial plots or plots for development of infrastructure for financial business, provided by the State Government Industrial Development Corporations or Undertakings or by any other entity having 20% (till now 50%). or more ownership of Central Government, State Government, Union territory to the industrial units or the developers in any industrial or financial business area.”

Procedural & Compliance changes

1. Extension of due date of Annual Return Form GSTR – 9 and Reconciliation Statement Form GSTR – 9C for the FY 2017-18 to 31/01/2020 from the deadline 31/12/2019.

2. For facilitation of GSTR -1 filing and invoice matching, waiver of Late fees to all taxpayers who had not filed GSTR- 1 from July 2017 to Nov 2019 provided all the returns are filed by 10/01/2020.

3. If the taxpayers do not file Form GSTR-1 by 10/01/2020 for two tax periods, the e-way bill facility will be blocked.

4. Change in Rule 36(4) of CGST Rules, 2017:-Till now Input tax credit to be availed on self-assessment basis is restricted to No. of invoices/debit notes reflecting in GSTR-2A + 20% of eligible credit available in respect of invoices/debit notes not uploaded by the supplier in his GSTR-1 u/s 37(1). Proposed change shall be restricted to 10% of eligible credit available in respect of invoices/debit notes not uploaded by the supplier in his GSTR-1 from present 20% to improve compliance and invoice matching.

5. To check the menace of fake invoices, GST authorities are empowered to take suitable action against fraudulently availed input tax credit in certain situations.

6. A Standard operating procedures (SOP) would be issued for tax officers in respect of action to be taken in case of non filling of GSTR-3B returns.

7. In view of difficulties in certain North-eastern states and J&K, the due dates for filing of GST returns for the month of Nov 2019 has been extended to 31/12/2019.

Press Release  of 38th GST Council Meeting issued on 18th December 2019-

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