40th Gst Council Meeting

The Goods and Service Tax (GST) council held its 40

th GST council meeting, via video conferencing, on 12th June 2020. The meeting was held under the Chairmanship of the Finance Minister Nirmala Sitharaman. As all are aware, the Government has come up with various relief measures post COVID-19 outbreak. However, the trade and industry were keeping an eye on the present GST council meeting, since it was the first meet post coronavirus pandemic and subsequent lockdowns. The present article highlights the outcome of the said 40th GST council meeting.

Drop in GST collection

The Finance Minister, during the meeting, statistically mentioned that on account of COVID-19 and successive lockdown, the GST collection had dropped down to a whopping 45%. The drop in GST collection has aggravated the problem of compensation to the states. However, it is being concluded that the issue will be discussed in the next GST council meeting to be held in July.

Reduction in late fees

Despite of facing the lower GST collection, the Government, as a part of further relief, noticeably reduced the late fees for the tax period July 2017 to January 2020 as under-

Particular	Tax period	Effective late fee
The taxpayer having no tax liability during the period July 2017 to January 2020.	July 2017 to January 2020	NIL
The taxpayer having tax liability during the period July 2017 to January 2020.	July 2017 to January 2020	Maximum late fee – INR 500 per return

The reduced late fee will definitely encourage the non-filers to file the pending GST return. The reduction in late fee is however, applicable only for non-filing of GST return in Form GSTR-3B. Importantly, the reduced late fee will apply only if the pending returns are furnished between 1

st July 2020 to 30th September 2020.

Reliefs for small taxpayers

The interest rate on late furnishing of return for the period February 2020, March 2020, and April 2020 will be reduced from 18% per annum to 9% per annum. The relief of lower interest rate is available only to the small taxpayers having turnover up to INR 5 Crores. Further, the aid is available only if the return of inward supplies is filed till 30

th September 2020. It is also decided by the GST council to waive off both the late fees and interest for the period May 2020, June 2020, and July 2020 for small taxpayers having turnover up to INR 5 Crores. However, the waiver is available only if returns are furnished by 30th September 2020.

One-time extension

The Government has announced an one-time extension for the taxpayer seeking revocation of cancellation of registration up to 30

th September 2020. The extension is available only to cases, wherein, the registration has been cancelled till 12th June 2020.

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Frequently Asked Questions

Common questions about 40th GST Council Meeting Insights on Relief Measures 2020.

The main agenda of the 40th GST Council Meeting was to provide relief measures to taxpayers and address concerns related to the drop in GST collection due to the COVID-19 pandemic and subsequent lockdowns.

According to the Finance Minister, the GST collection had dropped by a whopping 45% due to the COVID-19 pandemic and successive lockdowns.

The late fees for taxpayers with no tax liability between July 2017 and January 2020 were made nil. For taxpayers with tax liability during the same period, the maximum late fee was capped at INR 500 per return.

The reduced late fees are applicable only if the pending GST returns in Form GSTR-3B are furnished between July 1, 2020, and September 30, 2020.

For small taxpayers with a turnover of up to INR 5 crores, the interest rate on late furnishing of returns for February, March, and April 2020 was reduced from 18% per annum to 9% per annum.

For small taxpayers with a turnover of up to INR 5 crores, both late fees and interest were waived off for the period of May, June, and July 2020, provided they file their returns by September 30, 2020.

The government announced a one-time extension until September 30, 2020, for taxpayers seeking revocation of cancellation of registration, provided their registration was cancelled on or before June 12, 2020.

The issue of compensation to states due to the drop in GST collection will be discussed in the next GST Council Meeting scheduled for July 2020.

The relief measures, such as reduced late fees, lower interest rates, and extensions, were announced to provide financial assistance and encourage compliance among taxpayers affected by the COVID-19 pandemic and lockdowns.

Yes, most of the relief measures, such as reduced late fees, lower interest rates, and waiver of late fees and interest, have a deadline of September 30, 2020, by which taxpayers must file their pending returns to avail the benefits.