40th GST Council Meeting
40th GST Council Meeting
The Goods and Service Tax (GST) council held its 40th 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 1st 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 30th 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.
The Government has announced an one-time extension for the taxpayer seeking revocation of cancellation of registration up to 30th September 2020. The extension is available only to cases, wherein, the registration has been cancelled till 12th June 2020.