Daily Current Affairs 2020 GST Council Meeting: Relief on late fee for GST return filing | Daily Current Affairs 2020

GST Council Meeting: Relief on late fee for GST return filing

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  • GST rates are unlikely to be changed in the GST Council meeting today
  • Late fee for not filing GST returns could be decreased

NEW DELHI : Amid a massive impact on tax revenues due to the coronavirus-induced lockdown which began in March end, Finance Minister Nirmala Sitharaman today chaired the 40th GST Council meeting via video conferencing. This was the first meeting of the GST Council during the lockdown in which the impact of Covid-19 on revenue collection was also discussed.

GST Council Meeting Updates:

-Divakar Vijayasarathy, Founder & Managing Partner, DVS Advisors LLP, said: “It was widely expected that the GST council would decide on raising loans on cess accounts to compensate the shortfall. This option has been doing rounds for quite some time. With the GST collections falling drastically, states are under severe stress especially states like West Bengal which also had to bear the wrath of the cyclone. With the severity of Covid 19 increasing, the delay in decision making could worsen the situation. Procrastinating on critical decisions would not help in the fight against Covid 19 & dwindling economy. The other decisions are more on the expected line”.

-Kapil Rana, Chairman & Founder, HostBooks Limited, said these measures will help in two ways. It will the push for return filing, hence will accelerate GST revenue collection. It will also help in cleaning up unwanted non-compliance related legal & procedural issues benefiting both taxpayer and the GST department, he said.

-ClearTax founder and CEO Archit Gupta said the removal of late fees for past returns is a big relief for those who are already facing severe cash crunch and this decision will be widely welcomed by small businesses. “As the covid scenario remains precarious, businesses need to closely review their functions and focus on adopting business continuity tools and technology. This way they can use this time to prepare for more pain, some of which may still come,” he said.

-There has been a unanimity that inversion causes revenue generation problems and unexpected refunds, the question was when this is to be corrected: FM

-While the principle regarding correction of inversion of duties has been agreed upon by everybody, the question of the right time to make the correction remained, hence this decision has been postponed: FM

-The issue of inverted duty structure hitting GST collections was discussed. The GST Council also discussed inverted duty structure in textile: FM

-FM says discussion on taxing pan masala will hopefully be taken up at GST Council’s next regular meeting.

-On the issue of compensation requirements of states, Sitharaman said a special one-agenda meeting will happen in July to discuss compensation.

-Small tax payers whose aggregate turnover is up to ₹ 5 crore will be provided a waiver of late fees and interest if they file the form GSTR-3B for the supplies affected in months of May, June and July 2020, by September 2020, no late fee or interest: Sitharaman

-Small tax payers will have to pay no interest for late furnishing of GST returns till July 6, 2020; after that, the interest rate has been reduced to 9%, this will be valid till September 30, 2020: FM

-For small tax payers whose aggregate turnover is up to ₹5 crore, the rate of interest for late furnishing of GST returns for Feb, Mar and April 2020, beyond July 6, 2020, the rate of interest is being reduced from 18% to 9%: FM

-The two decisions regarding late fee for non-filing of GST returns have been taken by GST Council in order to clean up pendencies: FM

-For those with tax liability, maximum late fee for non-filing of GSTR-3B returns for July 2017 – Jan 2020 has been capped to ₹500. This will apply to all returns submitted during Jul 1, 2020 – Sep 30, 2020: FM

-For the period from July 2017 to Jan 2020, which is prior to COVID period, a lot of return filing has been pending. For all those who have no tax liabilities but who have not filed their returns between July 2017-Jan 2020 there will be zero late fees: FM Nirmala Sitharaman

-FM press briefing begins.

-GST Council meeting is underway.

-The government has already waived late fee for filing GSTR-3B returns from February 2020 to May 2020.

-Late fees for non-filing of GST returns for the period in between August 2017 to January 2020 could be waived off.

-Under GST law, state governments are guaranteed to be paid for any loss of revenue in the first five years of the GST implementation from July 1, 2017.

-GST Council is expected to consider revising late filing fee for returns from July 2017 to January 2020. Some other compliance-related relief measures are also expected to be taken up in the meeting.

-FM is scheduled to brief the media shortly.

Source: livemint

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