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Key Highlights of 43rd GST Council Meeting

The GST Council under the chairmanship of Union Finance Minister Mrs. Nirmala Sitharaman conducted its 43rd meeting through video conferencing in New Delhi. Keeping in mind the 2nd wave of COVID-19, GST council has recommended the following relief measures for taxpayers:-

1.  Late Fees Relief Measures

Amnesty scheme is announced to provide relief to taxpayers from huge late fee on pending GST returns

To provide relief to the taxpayers, late fee on non-furnishing of FORM GSTR-3B Return for the tax periods from July 2017 to April 2021 has been reduced/waived as under: –

Maximum Late Fee Applicable on Taxpayers
Rs. 500/- per return having NIL tax liability
Rs. 1,000/- per return All other taxpayers

Above reduced rate of late fee would apply if FORM GSTR-3B Return, for the above tax periods are furnished between 01.06.2021 to 31.08.2021.

Rationalisation of late fee imposed on late filing of GST returns

To reduce the 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:

Late Fee on delay in furnishing of Form GSTR-3B and GSTR-1 by normal taxpayer

Maximum Late Fee Applicable on Taxpayers Annual Aggregate Turnover (AATO)
Rs. 500/- per return having NIL tax liability Irrespective of AATO in the preceding year.
Rs. 2,000/- per return All other taxpayers If AATO is up to 1.5 Crore in the preceding year
Rs. 5,000/- per return All other taxpayers If AATO is between 1.5 Crore to 5 Crore in the preceding year
Rs. 10,000/- per return All other taxpayers If AATO is above 5 Crore in the preceding year

Late Fee on delay in furnishing of Form GSTR-4 by composition taxpayer

Maximum Late Fee Applicable on Taxpayers
Rs. 500/- per return having NIL tax liability
Rs. 2,000/- per return All other taxpayers

Late Fee on delay in furnishing of Form GSTR-7 is to be reduced to Rs. 50/- per day and to be capped to a maximum of Rs. 2000/- per return.

Further, all the above proposals for rationalization of the late fee imposed, are to be made applicable for prospective tax periods.

2. COVID-19 Related Relief Measures

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

  • For small taxpayers (aggregate turnover up to Rs. 5 crore)
    • For March & April 2021 tax periods:
      • NIL rate of interest for first 15 days from the due date of furnishing the return in FORM GSTR-3B or filing of PMT-06 Challan, reduced rate of 9% thereafter for further 45 days and 30 days for March 2021 and April 2021 respectively.
      • Waiver of late fee for delay in furnishing return in FORM GSTR-3B for the tax periods March / QE March 2021 and April 2021 for 60 days and 45 days respectively, from the due date of furnishing FORM GSTR-3B.
      • NIL rate of interest for first 15 days from the due date of furnishing the statement in CMP-08 by composition dealers for QE March 2021, and reduced rate of 9% thereafter for further 45 days.
    • For May 2021 tax period:
      • NIL rate of interest for first 15 days from the due date of furnishing the return in FORM GSTR-3B or filing of PMT-06 Challan, and reduced rate of 9% thereafter for further 15 days.
      • Waiver of late fee for delay in furnishing returns in FORM GSTR-3B for taxpayers filing monthly returns for 30 days from the due date of furnishing FORM GSTR-3B.
  • For large taxpayers (aggregate turnover more than Rs. 5 crore)
    • A lower rate of interest @ 9% for first 15 days after the due date of filing return in FORM GSTR-3B for the tax period May, 2021.
    • Waiver of late fee for delay in furnishing returns in FORM GSTR-3B for the tax period May, 2021 for 15 days from the due date of furnishing FORM GSTR-3B.

3. Other COVID-19 Related Relaxations

  • Extension of the due date of filing GSTR-1 / IFF for the month of May 2021 by 15 days.
  • Extension of the due date of filing GSTR-4 for FY 2020-21 to 31.07.2021.
  • Extension of the 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.

4. 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 upto 30th June, 2021, subject to some exceptions.

5. 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. This would ease the compliance requirement in furnishing reconciliation statement in FORM GSTR-9C, as taxpayers would be able to self-certify the reconciliation statement, instead of getting it certified by chartered accountants. This change will apply for Annual Return for FY 2020-21.
  • The filing of annual return in FORM GSTR-9 / 9A for FY 2020-21 to be optional for taxpayers having aggregate annual turnover upto Rs 2 Crore;
  • The reconciliation statement in FORM GSTR-9C for the FY 2020-21 will be required to be filed by taxpayers with annual aggregate turnover above Rs 5 Crore.

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

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