Key takeaways from 40th GST Council Meeting

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Key takeaways from 40th GST Council Meeting

40th GST Council Meeting was held on Friday,12th June 2020. It was the first GST Council meeting held after the country was hit by COVID 19 pandemic.  It was the 6th GST Council Meeting under the chairmanship of Finance Minister Nirmala Sitharaman.

The last GST Council meeting i.e 39th GST Council Meeting which was held on 14th March 2020 which was held almost three months back and just before the lockdown was announced by the Government.

Meeting 40th GST Council Meeting
Date Friday, 12th June 2020
Chairperson Finance Minister Nirmala Sitharaman
Venue New Delhi via Video Conferencing
Attendees FMs  & Senior Officers from all the States & UTs.

The GST Council Meeting through video conferencing was attended by  Finance Minister Nirmala Sitharaman, Minister of State for Finance Anurag Thakur and Finance Ministers from all the States and Union Territories and Some Senior Officials from all the States and Union Territories.

GST Council comprises of Union Finance Ministers and State Finance Ministers which is the federal decision-making body for the matters of GST.

Major outcomes from 40th GST Council Meeting
Reduction in late fees for GSTR 3B

The government wants taxpayers to clear off the backlog of pending GST returns. To facilitate the taxpayers, the Government has made a phased reduction in late fees for non-furnishing GSTR-3B for the tax period during 1st July 2017 to 31st January 2020.

  • If for a tax period there is a TAX LIABILITY then the taxpayer shall file GSTR 3B with applicable interest and MAX. LATE FEES of Rs 500 for that tax period. Only late fees has been reduced and capped to Rs 500 per return, but the Interest on delay in payment of the tax liability will be applicable.
  • If for a tax period there is NO TAX LIABILITY  then the taxpayer shall file GSTR 3B with NO LATE FEES for that tax period.  In the case where NIL GSTR 3B needs to be filed, the question of interest on delay in payment of tax liability does not arise.

Note: Reduced late fees will be applicable only if GSTR 3B for the above mentioned period is furnished between 1st July 2020 to 30th September 2020.

If there is NO liability NO Late fees No interest
If there is a liability Maximum late fees Rs 500 per return Interest will be applicable

Reduction/waiver of the interest rate for small taxpayers

Small taxpayers whose aggregate turnover is up to Rs 5 Crores and

if GSTR 3B for the month of February, March and April 2020 are filed within the prescribed due date then interest will not be applicable on the tax liability.

BUT

if returns for the above mentioned months are filed beyond the prescribed due dates but within 30th September 2020 then interest @9% (instead of 18%) will be applicable on the tax liability.

Note: Unless a further relaxation is granted if a taxpayer files the return post 30th September 2020, then interest @18% will be charged from the prescribed due date as per CGST Notification no. 32 dated 3rd April 2020.

Waiver of interest and late fees for small taxpayers

Considering the COVID-19 pandemic, GST Council has decided to extend the due date for small taxpayers whose aggregate turnover is upto Rs 5 Crores and

if GSTR 3B for the month of May, June and July 2020 are filed within the prescribed due date then NO LATE FEES and NO INTEREST on the tax liability.

Note: The press release issued post the GST Council Meeting had a mention that due date is yet to be notified. 

Note: Earlier due dates for all the taxpayers (small as well as large taxpayers) was extended, late fees was waived and interest was either waived or was charged at a reduced rate. 

Extension for seeking revocation of the cancelled registration

As per section 30 of GST Act 2017, a registered person can apply in FORM GST REG-21 for revocation of cancellation within 30 days from the date of service of the cancellation order ONLY if the registration has been cancelled by the proper officer on his own motion.

Taxpayers whose registration has been cancelled up to 12th June 2020 and have not restored in time, such taxpayers can apply for revocation of cancelled registration up to 30th September 2020.

Certain clauses of the Finance Act, 2020 which amends CGST Act 2017 & IGST Act, 2017 shall be notified and be brought into force from 30th June 2020.
GST Council is likely to meet again in July 2020 for discussing how CG will pay off SGs & UTGs.


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About CA Ankita Khetan 165 Articles
Ankita is a Chartered Accountant in practice and holds a Diploma in IFRS (from ACCA, UK). She is also a Commerce PG and Certified Independent Director (from IICA). She holds a certification in Forex and Treasury Management. Her area of expertise is GST and Income tax. She is passionate about reading, writing, and sharing knowledge on areas related to finance and taxation.

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