Highlights of 26th GST Council Meeting

The GST council has, in its 26th Meeting held on 10.03.2018 at New Delhi and headed by Finance Minister Mr. Arun Jaitley, announced various decisions pertaining to GSTR-3B return filing, e-way bill, reverse charge mechanism, e-wallet, TDS/TCS provisions and grievance redressal mechanism. The highlights of the 26th GST Council Meeting in detail are as follows:

1. GSTR 3B Return Filing

GSTR-3B return was introduced as a temporary measure until the full-fledged implementation of GSTR-1, GSTR-2 and GSTR-3 returns. All taxpayers having GST registration were mandatorily required to file GSTR 3B returns up to 31.03.2018 every month. However, as GSTR-2 and GSTR-3 returns have been suspended, the GST Council has decided to extended GSTR -3B return filing up to 30.06.2018

2. The e-way bill for inter-State movement of goods across the country from 01.04.2018

The e-way bill roll out has been announced for inter-State movement of goods across the country from 01.04.2018. For intra- State movement of goods, e-way bill system will be introduced with effect from a date to be announced in a phased manner but not later than 01.06.2018.

The other significant changes (improvements) with respect to e-way bill, as approved by the GST Council now, are as given below:

  • The e-way bill would be required if the value of the consignment exceeds Rs. 50,000/-. No e-way bill is required for smaller value consignments.
  • The value of exempted goods has been excluded from value of the consignment, for the purpose of e-way bill generation.
  • Public conveyance has also been included as a mode of transport. The responsibility of generating an e-way bill in case of movement of goods by public transport would be that of the consignor or consignee.
  • Transport of goods by Railways has been exempted from generation and carrying of e-way bill with the condition that without the production of an e-way bill, railways will not deliver the goods to the recipient. But railways are required to carry invoice or delivery challan, etc.
  • Time period for the recipient to communicate his acceptance or rejection of the consignment would be the validity period of the concerned e-way bill or 72 hours, whichever is earlier.
  • Job-work – In case of movement of goods on account of job-work, the registered job worker can also generate an e-way bill.
  • Consignor can authorize the transporter, courier agency and e-commerce operator to fill PART-A of an e-way bill on his behalf.
  • Movement of goods from the place of consignor to the place of transporter up to a distance of 50 Km [earlier 10 km] will not require filling of PART-B of an e-way bill. They have to generate PART-A of an e-way bill.
  • Extra validity period has been provided for Over Dimensional Cargo (ODC).
  • If the goods cannot be transported within the validity period of the e-way bill, the transporter may extend the validity period in case of transshipment or in case of circumstances of an exceptional nature.
  • Validity of one day will expire at midnight of the day immediately following the date of generation of an e-way bill.
  • Once verified by any tax officer, the same conveyance will not be subject to the second check in any State or Union territory, unless and until specific information for the same is received.
  • In case of movement of goods by railways, airways and waterways, the e-way bill can be generated even after commencement of movement of goods.
  • Movement of goods on account of Bill-To-Ship-To supply will be handled through the capturing of place of dispatch in PART-A of an e-way bill.

3. Reverse Charge Mechanism

Reverse Charge is applicable on some types of transactions under GST. If reverse charge is applicable, the recipient of the goods or services would be liable for payment of GST instead of the supplier. GST reverse charge was earlier suspended up 31.03.2018. The 26th GST Council Meeting has decided to defer the reverse charge mechanism up to 30.06.2018.

4. E-Wallets

The e-Wallet scheme is basically the creation of electronic e-Wallets, which would be credited with notional or virtual currency by the DGFT. This notional / virtual currency would be used by the exporters to make the payment of GST/ IGST on the goods imported/ procured by them so their funds are not blocked. The GST Council has decided to implement e-wallets as a permanent solution for easing the GST refunds process and compliance for exporters, expected to be implemented from 1.10.2018.

5. GST Export & Refund Procedures

It has been decided to extend the available tax exemptions on imported goods for a further period of six months beyond 31.03.2018. Hence, exporters availing various export promotion schemes can continue to avail such exemptions on their imports up to 01.10.2018, by which time an e-wallet scheme is expected to be in place to continue the benefits in future.

6. Fast Processing of GST Refund for Exports

It was noted that the pace of grant of GST refunds for exports has increased. The Council has also directed GSTN to expeditiously forward the balance refund claims to the Customs/Central GST/State GST authorities, as the case may be, for their immediate sanction and disbursal.

7. Extension of Various Benefits for Exporters up to 01.10.2018

For merchant exporters, a special scheme of payment of GST @ 0.1% on their procured goods was introduced to improve cash-flow for the taxpayers. Also, domestic procurement made under Advance Authorization, EPCG and EOU schemes were recognized as ‘deemed exports’ with flexibility for either the suppliers or the exporters being able to claim a refund of GST / IGST paid thereon. All these avenues and benefits have been extended up to 01.10.2018.

8. Controlling GST Evasion

The Government has noticed that there are major discrepancies between the amount of IGST & Compensation Cess paid by importers at Customs ports and input tax credit of the same claimed in GSTR-3B return. There are major data gaps between self-declared liability in GSTR-1 and FORM GSTR-3B returns. The Government has started analysing such discrepancies and started taking action against tax evaders.

9. TDS/TCS provisions

The formalities which need to be finalized for the Tax Deducted at Source (TDS) and Tax Collection at Source (TCS) system, which involves linking of the accounting system of both the central and state government, has been extended until 30.06.2018.

10. Grievance redressal mechanism

A committee has been formed to look into the Grievance redressal mechanism with respect to user’s grievances surrounding the IT glitches on the GSTN.

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