HIGHLIGHTS OF 43rd GST COUNCIL MEETING

COVID-19 Relief Measures

Several specified COVID-19 related goods such as medical oxygen, oxygen concentrators and other oxygen storage and transportation equipment, certain diagnostic markers test kits and COVID-19 vaccines, etc., have been recommended for full exemption from IGST, even if imported on payment basis, for donating to the government or on recommendation of state authority to any relief agency. This exemption shall be valid up to 31.08.2021.

IGST exemption was applicable only when these goods were imported “free of cost” for free distribution. The same will also be extended till 31.8.2021. Kindly note that these goods are already exempted from Basic Customs duty. Further in view of rising Black Fungus cases, the above exemption from IGST has been extended to Amphotericin B.

Further, relief in respect of individual items of COVID-19 will be decided after Group of Ministers (GoM) submits its report on 8th June 2021.

Certain Clarificatory Amendments Recommended in Relation To GST Rates

• GST rate on Diethylcarbamazine (DEC) tablets has been recommended for reduction to 5% (from 12%).
• 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 goods are sold separately.
• Leviability of IGST on repair value of goods re-imported after repairs.

Clarifications In Respect of Services

• Supply of food serving services (including midday meals under any scheme sponsored by Government) to an educational institution including anganwadi are exempt from levy of GST irrespective of funding of such supplies from government grants or corporate donations.
• Service by way of milling of wheat/paddy into flour/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.
• GST on Maintenance, Repair & Overhaul (MRO) services in respect of ships/vessels shall be reduced to 5% (from 18%). Further, PoS of B2B supply of MRO Services in respect of ships/ vessels would be location of recipient of service.
• Services supplied to a Government Entity by way of construction of a ropeway attracts GST @ 18%
• GST is payable on annuity payments received as deferred payment for construction of road. Benefit of the exemption is for such annuities which are paid for the service by way of access to a road or a bridge.

Measures for Trade Facilitation

1. Amnesty Scheme Announced - Waiving Off the Late Fees for Pending Returns

   For providing relief to the taxpayers, late fees for non-filing of GSTR-3B for tax periods from July 2017 to April 2021 has been reduced if the returns for the said tax period is filed between 01.06.2021 to 31.08.2021 :

   • Late fees capped at Rs. 500 per return (Rs. 250/- each under CGST & SGST Acts) for taxpayers having NIL tax liability for the said tax periods.
   • Late fees capped at Rs. 1,000 per return (Rs. 500/- each under CGST & SGST Acts) for other taxpayers
2. Rationalization of Late Fees Under Section 47 of CGST Act

   To reduce the burden of late fees on small taxpayers the upper cap on late fees has been aligned with tax liability/turnover of the taxpayers as follows :

   Capping on Late Fees for Delayed Filing of Returns
   Delay in Filing of Return	Conditions to Be Satisfied by Taxpayers	Maximum Late Fees Per Return (Cumulative of CGST & SGST Acts)
   Capping in Case GSTR-1 / GSTR-3B is NIL
   GSTR-1 / GSTR-3B	Nil outward supplies in GSTR-1 or Nil tax liability in GSTR-3B	500
   Otherwise, Turnover Based Capping Applicable For GSTR-1 / GSTR-3B
   GSTR-1 / GSTR-3B	AATO in PFY* is up to 1.5 Cr.	2,000
   GSTR-1 / GSTR-3B	AATO in PFY* is between 1.5 Cr. To 5 Cr.	5,000
   GSTR-1 / GSTR-3B	AATO in PFY* is Above 5 Cr.	10,000
   GSTR-4	If tax liability is NIL in return	500
   	Otherwise	2,000
   GSTR-7	Late Fees reduced to Rs. 50 per day	2,000

   * Annual Aggregate Turnover in Preceding Financial Year

   Kindly note that the above proposal will be applicable for prospective tax periods.

3. COVID-19 Related Relaxations for Taxpayers

   In addition to the relief measures already provided to the taxpayers vide the notifications issued on 01.05.2021, following further relaxations are being provided to the taxpayers :

   A. Reduced Rate of Interest & Waiver of Late Fees for Small Taxpayers (AATO up to 5 Cr.)
   Particulars	Applicable Period	Reduced Rate of Interest	Period for Which Late Fees Waived
   GSTR-3B(Monthly filer)	March'21 - April'21	First 15 Days from due date- NIL Next 45 days - 9% Thereafter- 18%	60 days from due date of furnishing return
   GSTR-3B(Quarterly filer)	January'21-March'21	First 15 Days from due date- NIL Next 30 days - 9% Thereafter- 18%	45 days from due date of furnishing return
   GSTR-3B(Quarterly filer)	April'21 (PMT-06)	First 15 Days from due date- NIL Next 30 days - 9% Thereafter- 18%	N/A
   Composition Taxpayers	Quarter Ending March'21	First 15 Days from due date- NIL Next 45 days - 9% Thereafter- 18%	N/A
   GSTR-3B(Monthly filer)	May'21	First 15 Days from due date- NIL Next 15 days - 9% Thereafter- 18%	30 days from due date of furnishing return
   GSTR-3B(Quarterly filer)	May'21 (PMT-06)	First 15 Days from due date- NIL Next 15 days - 9% Thereafter- 18%	N/A

   B. Reduced Rate of Interest & Waiver of Late Fees for Large Taxpayers (AATO above 5 Cr.)
   Particulars	Applicable Period	Reduced Rate of Interest	Period for Which Late Fees Waived
   GSTR-3B(Monthly filer)	May'21	First 15 Days from due date- 9% Thereafter- 18%	15 days from due date of furnishing return

   C. Other COVID-19 Related Relaxations

   Extension of due date of filing GSTR-1/ IFF for the month of May 2021 by 15 days. Extension of due date of filing GSTR-4 for FY 2020-21 to 31.07.2021. Extension of due date of filing ITC-04 for QE March 2021 to 30.06.2021. Cumulative application of Rule 36(4) for availing ITC for tax periods April, May and June, 2021 in the return for the period June, 2021. Allowing filing of returns by companies using Electronic Verification Code (EVC), instead of Digital Signature Certificate (DSC) till 31.08.2021.

   D. 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]

4. Simplification of Annual Return for Financial Year 2020-21

   Amendments in section 35 and 44 of CGST Act made through Finance Act, 2021 to be notified. These changes would ease the compliance burden on the taxpayers. These changes will apply for Annual Return for FY 2020-21.

   Applicability of GSTR-9 & 9C for F.Y. 2020-21

   Annual Aggregate Turnover (AATO)	GSTR – 9	GSTR – 9C
   Up to Rs. 2 Crore	Optional	Optional
   More Than 2 Crore but Below 5 Crore	Mandatory	Optional
   More Than 5 Crore	Mandatory	Mandatory

5. Retrospective amendment in section 50 of the CGST Act with effect from 01.07.2017, providing for payment of interest on net cash basis, to be notified at the earliest.

The above recommendations of the GST council would be given effect through relevant Circulars/Notifications which alone shall have the force of law.