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2020

Key Highlights of 40th GST Council Meeting

Key Highlights of 40th GST Council Meeting 1

The 40th GST Council meeting was held on 12th June, 2020 Friday. It was chaired by Finance Minister Nirmala Sitharaman. Taking into consideration the critical situation in the country in the wake of pandemic Covid-19 and expectations of hard hit MSME sector of the country, the meeting recommended further relief in GST Compliance burden. Let us discuss the key highlights of the major recommendations of the council.

GSTR 3B Late Fee Reduction/Waiver:

Late fees for filing GSTR 3B for the period from 1st July 2017 to 31st January 2020 has been reduced/waived for following tax payers:

Tax Liability Late Fees
No Tax Liability Nil
Some Tax Liability Maximum up to Rs 500 per return if dues are settled and returns filed between 1st July 2020 and 30th September 2020.

Relief in relation to rate of interest for GSTR 3B for the months of February, March and April, 2020:

Turnover Period for GSTR3B Specified Dates for filing GSTR 3B
Upto 1.5 crore February, 20

On or before 30th June, 2020

March, 20

On or before 3rd July, 2020

April, 20 On or before 6th July, 2020
Between 1.5 crore to 5 crore February, 20 & March, 20

On or before 29th June, 2020

April, 20

On or before 30th June, 2020

  • The rate of interest for late furnishing of returns for the month of February, March and April, 2020 beyond specified dates (staggered up to 6th July 2020) is reduced from 18% per annum to 9% per annum till 30th September 2020 for small taxpayers having aggregate turnover up to Rs 5 crore.
  • In other words, for these months, small taxpayers will not be charged any interest till 6th July, 2020 and thereafter 9% interest will be charged till 30th September, 2020.

Relief in relation to Returns for the months of May, June & July 2020:

  • Late fees and interest have been waived in relation to FORM GSTR-3B for the months of May, June and July, 2020 if they are filed up to September, 2020 (staggered dates to be notified).
  • This relief is applicable to tax payers having turnover up to Rs. 5 Crore.

One Time Extension in period for Revocation of Cancellation of Registration:

  • To facilitate taxpayers who could not get their cancelled GST registrations restored in time, an opportunity is being provided for filing of application for revocation of cancellation of registration up to 30th September 2020, in all cases where registrations have been cancelled till 12thJune 2020.

Increase in GST Rates for Certain Goods Deferred:

  • The Council also deferred the decision of raising rates on textiles, fertilizers and footwear to correct the inverted duty structure.
  • States unanimously agreed on the principal of correcting the inverted duty structure but also said that it is not the right time to raise rates when the idea is to revive demand in the economy.

GST Compensation Cess:

  • GST Council is looking at a borrowing option for funding the compensation to states and UTs.
  • The GST collections have been 45% of the usual levels in the past two months.
  • The matter will be taken up in a special one-agenda council meeting, which is going to be scheduled in July 2020.

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