The 40th GST Council meeting was held on June 12, 2020 through video conferencing under the chairmanship of Union Finance Minister Smt. Nirmala Sitharaman and other panel ministers. Brief updates of the GST Council Meeting and its analysis wherever necessary are provided below:
1) Reduction in late fee for past returns
Several taxpayers have failed to file GSTR-3B for the period July 2017 to January 2020. As a trade facilitation measure, the Council has recommended the following:
|Sl.No||Whether there exists any tax liability in a particular month||Amount of late fee per return|
CONDITION: The reduced rate of late fee would apply for all the GSTR-3B returns furnished between July 1, 2020 to September 30, 2020
2) Reduced interest of 9% to be levied in case of delay in furnishing of returns for the month of February, March and April 2020.
In terms of Notification No. 31/2020-Central Tax dated April 3, 2020, class of registered persons having an aggregate turnover upto Rs. 5 crores in the preceding financial year were granted relief by way of conditional waiver of interest if GSTR-3B is filed within the date specified in the abovementioned notification. For ease of reference, particulars and conditions of notification are reproduced below:
|Class of Registered persons||Tax period||Interest Rate||Condition|
|Taxpayers having an aggregate turnover of more than Rs. 1.5 Crores and upto Rs. 5 Crores||February and March 2020||NIL||If GSTR-3B is furnished on or before June 29, 2020|
|April 2020||If GSTR-3B is furnished on or before June 30, 2020|
|Taxpayers having an aggregate turnover of upto Rs. 1.5 Crores||February 2020||NIL||If GSTR-3B is furnished on or before June 30, 2020|
|March 2020||If GSTR-3B is furnished on or before July 3, 2020|
|April 2020||If GSTR-3B is furnished on or before July 6, 2020|
Hence, it is evident that interest would have been levied in case GSTR-3B is not furnished on or before specified due dates.
b) Recommendation of GST Council
Vide 40th GST Council Meeting, it is recommended that where the returns are not filed before the specified due dates, reduced rate of interest of 9% would be charge till September 30, 2020
Timely recommendations by GST Council may push the taxpayers to file the returns before specified due date in order to avoid the interest exposure.
Further, it is pertinent to note that the Press release is silent regarding late fee in case returns are not filed on or before the specified date. In terms of Notification No. 32/2020 – Central Tax dated April 3, 2020, conditional late fee waiver was prescribed for the abovementioned class of taxpayers if returns are filed on or before specified dates.
Interestingly, press release is silent regarding levy of late fee if returns are filed after specified due dates. This would bring to the conclusion that late fee for delay furnishing of GSTR-3B for the month of February, March and April 2020 would be levied.
3) Relief for small taxpayers in filing of GSTR-3B for subsequent tax periods
|Class of Taxpayers||Tax period||Interest||Late Fee||Condition|
|Taxpayers having an aggregate turnover of upto Rs. 1.5 Crores||May 2020, June 2020 and July 2020||NIL||NIL||GSTR-3B is furnished by September 2020*|
*Staggered due dates will be notified by Govt.
4) One-time extension in period for seeking revocation of cancellation of registration
To facilitate taxpayers who could not get their cancelled GST registrations restored in time, an opportunity is being provided for ﬁling of application for revocation of cancellation of registration up to 30.09.2020, in all cases where registrations have been cancelled till 12.06.2020
Point to be Noted:
In 39th GST Council Meeting, it was recommended that the one-time extension be granted till June 30, 2020 where registration have been cancelled till March 14, 2020. Interestingly, the said recommendations of 39th GST Council Meeting is not notified yet.
Will the revenue authorities allow availment of input tax credit for FY 2017-18, FY 2018-19 in Recommendation No.1 and No.4? Clearly, opens pandora box for another round of litigation. Above recommendation along with specific guidelines would provide ease to the life of concerned taxpayers.
All the above-mentioned recommendations would be given effect through relevant Circulars/Notiﬁcations which alone shall have the force of law.