45th GST Council Meeting was held on Friday, 17th September 2021 at Lucknow under the Chairmanship of Finance Minister Nirmala Sitharaman. After the breakout of the COVID-19 pandemic, GST Council met for the first time for a physical meeting. Considering the hardships, major rate cuts were announced for COVID essentials in the previous i.e 44th GST Council Meeting which was held virtually before 3 months on 12th June 2021.
The next 46th GST Council Meeting was held on 31st December 2021.
Key Takeaways from 45th GST Council Meeting
⊗ Late Fees for Form GSTR 1 – Until now, the late fee was not being levied for delay in filing Form GSTR 1, though the provision for the same existed in the law. Late fees for delay in furnishing Form GSTR 1 will auto-populate in the next open return in Form GSTR 3B. Taxpayers should make a note that late fees for delay in furnishing returns in Form GSTR 1 as well as Form GSTR 3B will reflect in Form GSTR-3B. ⇒ Rationalized late fees notified for Form GSTR 1
Note: Clarity on whether late fees will be levied prospectively or retrospectively will come when notification in this regard will be issued.
⊗ Interest u/s 50(3) – The interest charging section is amongst one of the most relevant provisions from the taxpayer as well as Revenue’s point of view but the disputed journey of section 50 and its amendments has been really long. ⇒ Journey of section 50 so far
- If a taxpayer avails a wrongful/ ineligible input tax credit but does not utilize then interest shall not be levied.
- If a taxpayer avails a wrongful/ ineligible input tax credit and utilizes the same then interest @18% shall be levied.
Note: Amendment to section 50(3) is likely to be notified retrospectively w.e.f. 1st July 2017.
⊗ FORM GST ITC-04 – Practically, the taxpayers (manufacturers) who are required to furnish a declaration of goods sent on job work in Form GST ITC-04 have ignored filing the form as there are no specific penal provisions for not furnishing the said return. Government has time and again relaxed and extended the due date to furnish the same. The requirement of furnishing the above return has been further relaxed
Category of taxpayer
Periodicity of return
Taxpayers having AATO up to Rs 5 crores in the preceding FY
|Twice a year|
|Taxpayers having AATO above Rs 5 crores in the preceding FY||
Once a year
⊗ Aadhaar Authentication – Only if your registration is authenticated with Aadhaar,
- You are eligible to apply for revocation of cancellation of registration
- You are eligible for claiming the refund. (Note: GST refund will be disbursed in the bank account having the same PAN and GSTIN.) ⇒ Aadhaar Authentication under GST
⊗ Amendment to CGST Rule 59(6) – In bits and pieces we are moving towards the way GST was initially planned. After the proposed amendment is notified taxpayers will not be permitted to furnish Form GSTR 1 if Form GSTR 3B of the preceding period is not furnished. This amendment will aid in closing one of the loopholes of GST where tax evaders used to just pass on input tax credit by furnishing GSTR 1 without making the GST payment in Form GSTR 3B.
Note: Amendment to Rule 59(6) is likely to be implemented from 1st January 2022.
⊗ Introduction of Section 16(2)(aa) – The essence of GST is dependent on the seamless flow of credit but so many provisions have been laid down which restrict the availment of ITC. It is likely that the proposed section 16(2)(aa) of the Finance Bill 2021 will be notified w.e.f. 1st January 2022 and seamless flow of credit will become a myth. The introduction of section 16(2)(aa) is likely to make Rule 36(4) redundant and useless.
Government should consider introducing the original Form GSTR 2 or include the features of Form GSTR 2 in Form GSTR 2B (Especially the feature which gave the recipient the option to apply for the details of missing invoices from suppliers). Placing complete reliance on Form GSTR 2B for the input tax credit has resulted in hardships for honest taxpayers. If the supplier fails to furnish details in GST returns it is the recipient who suffers as the input tax credit does not reflect in GSTR 2B. There is no full-proof mechanism where the recipient can be permitted to avail the legitimate and genuine input tax credit which is not reflecting in GSTR 2B. [Detailed explanation of draconian provision section 16(2)(aa)]
Note: Amendment to section 50(3) is likely to be notified prospectively w.e.f. 1st January 2022.
⊗ Electronic Cash ledger – It is likely that taxpayers having the same PAN but registered in different states will be permitted to transfer the unutilized balance of CGST and IGST cash ledger from one state to another.
Unanswered Question – Will this amendment also permit to transfer of the unutilized balance of CGST and IGST cash ledger to the taxpayers having the same PAN in the same state but different business vertical.
⊗ Debit Note – Restriction for availing GST input tax credit within the prescribed time period as per section 16(4) will not be relevant for debit notes.
⊗ Physical copy of tax invoice – If for a transaction an e-invoice was generated as per CGST Rule 48(4) then there is no requirement of carrying a physical copy of the tax invoice is not applicable.
⊗ Concessional GST rates on COVID essentials – It is likely that the period for levying the concessional rates on COVID essentials may be extended by another three or more months. Note: The period for reduced rates ends on 30th September 2021.
⊗ E-commerce operators
- Providing delivery services would be considered as Restaurants for the food supplied by them and GST @ 5% shall be levied.
- Providing transport of passengers in any type of motor vehicle will be considered as passenger transport services and GST @5% shall be levied.
⊗ Petroleum Products cannot be brought under the ambit of GST at this stage.