39th GST Council meeting was held on 14 March 2020, Saturday. The meeting was chaired by Hon’ble Union Finance Minister Nirmala Sitharaman and was conducted in Vigyan Bhawan, New Delhi. The Council in it’s 39th meeting took a variety of decisions, including an increase in the GST on mobile phones and specified parts to 18% from 12%.
Highlights of the 39th GST Council Meeting
Changes in GST Rates
- GST on mobile phones, specified parts increased to 18% from 12%.
- GST on Maintenance, Repair and Overhaul (MRO) services of aircraft slashed to 5% from 18%.
- GST on handmade, machine-made matchsticks rationalized to 12%. Till now, the handmade ones were taxed at 5%, and other matches were taxed at 18%.
- All these rate changes will be effective from 01 April 2020.
Extension of GSTR-9 and GSTR-C
- Due date for annual return in form GSTR-9 and Form GSTR-9C for FY 2018-19 has been extended to 30 June 2020. The earlier date for filing the said returns was 31 March 2020.
- The turnover limit for audit purposes has been increased from Rs 2 crore to Rs 5 crore. Hence, filing GSTR-9C is optional for taxpayers having the turnover less than Rs 5 crore.
Late Fee Waiver
The taxpayers with an aggregate annual turnover of less than Rs 2 crore in FY 2017-18 and FY 2018-19 will not have to pay any late fee for delayed filing of GSTR-9.
Existing Return Filing System
The existing return system (GSTR-1, GSTR-2A & GSTR-3B) will be continued until September 2020.
Interest on Net Cash Liability
It was decided in the 39th GST Council Meeting that the interest for delayed GST payment will be calculated on the net cash tax liability from 01 July 2017 (Law to be amended retrospectively)
Revocation of Registration
- The taxpayer’s whose registration is cancelled till 14 March 2020 can file an application for revocation of cancellation of registration till 30 June 2020.
- The extension of the period of application is a one-time measure to facilitate those who want to conduct business.
Know your Supplier
GST Council, in its meeting, introduced a new scheme called ‘Know your Supplier’. The said scheme will enable every registered person to have some basic knowledge about the suppliers with whom they conduct or propose to conduct the business.
Deferment of E-invoicing and QR Code
The date of the implementation of e-invoicing and QR code has been extended to 01 October 2020. It was also decided in the meeting to exempt certain class of registered persons (insurance company, banking company, financial institution, non-banking financial institution, GTA, passenger transportation service etc.) from issuing e-invoices or capturing dynamic QR code.
Deferment of E-wallet Scheme
- The time limit for finalization of e-wallet scheme for consumers has been extended up to 31 March 2021.
- Present IGST and Cess exemptions on the imports made under the AA/ EPCG/EOU schemes will continue up to 31 March 2021.
Curb fake invoicing
In an effort to curb fake invoicing and fraudulent passing of Input Tax Credit (ITC), GST council has decided to impose restrictions on the passing of ITC in case of new GST registrations, before physical verification of premises and Financial KYC of the registered person.
Amendments made in CGST Rules
Some of the key amendments to CGST Rules are as below:
- Procedure for reversal of ITC in respect of capital goods partly used for effecting taxable supplies and partly for exempt supplies under rule 43 (1) (c).
- It was also decided in the GST Council meeting to fix a ceiling for the value of export supply for the purpose of calculation of refund on zero-rated supplies.
- A decision was made to allow for the refund to be sanctioned in both cash and credit in case of excess payment of tax.
- GST Council also decided to operationalize Aadhaar authentication for new taxpayers.
In it’s 39th meeting GST Council took an array of decisions including an increase in the GST on mobile phones from 12% to 18%. Another important decision includes the extension of due date for annual return in form GSTR-9 and forms GSTR-9C for FY 2018-19 till 30 June 2020 from 31 March 2020. The Council also reviewed the functioning of GSTN and asked Infosys to rectify all the glitches by July 2020.
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