Recommendations of 43rd GST Council Meeting

Dear All,

The Goods and Services Tax (‘GST’) Council in its 43rd Meeting held on May 28, 2021 has made following recommendations with respect to changes in GST rates on supply of goods and services and changes related to GST law and procedure

We have hereinbelow summarized the key recommendation of the 43^rd GST Council Meeting: 

• GST Rate on Covid-19 related goods 

Exemption of IGST is recommended on Covid-19 related goods such as medical oxygen, oxygen concentrators, other oxygen storage and transportation equipment, certain diagnostic markers test kits, Covid-19 vaccines and Amphotericin B, even if imported on payment basis for donation to the Government or to any relief agency on recommendation of the State authority till August 31, 2021

• Reduction in GST rates 

Goods/ Service	Current Rate	Proposed Rate
Diethylcarbamazine (DEC) tablets	12%	5%
Maintenance Repair Operations services in respect of ships/vessels	18%	5%

 

• Clarification in relation to taxability of goods 

1. Leviability of IGST on repair value of goods re-imported after repairs
2. GST to be applicable at the rate of 12% on parts of sprinklers/ drip irrigation systems falling under Heading 8424 (nozzle/laterals), even if the goods are sold separately

• Clarifications in relation to taxability of Services

• To clarify exemption on GST in respect of services supplied to an educational institution including anganwadi (which provide pre-school education also), by way of serving of food including mid- day meals under any midday meals scheme, sponsored by the Government irrespective of funding of such supplies from the Government grants or corporate donations 
• To clarify exemption on GST in respect of services provided by way of examination including entrance examination, where fee is charged for such examinations by the National Board of Examination (NBE), or similar Central or State educational Boards, and input services in relation to such service

• To clarify that the land owner promoters could utilize ITC of GST charged by developer promoters in respect of such apartments that are subsequently sold by the land promotor and on which GST is paid. The developer promotor shall be allowed to pay GST relating to such apartments any time before or at the time of issuance of completion certificate
• To clarify exemption on GST in respect of services supplied by way of milling of wheat/paddy into flour (fortified with minerals etc.  by millers or otherwise)/rice to Government/ local authority etc. for distribution of such flour or rice under public distribution services (PDS) is exempt from GST if value of goods in such composite supply does not exceed 25%. Otherwise, such services would attract GST at the rate of 5% if supplied to a registered person (including a person registered for payment of TDS)
• To clarify that GST is payable on annuities payments received as deferred payment for construction of road and the benefit of the exemption is for such annuities which are paid for the service by way of access to a road or a bridge
• To clarify that services supplied to a Government Entity by way of construction of a rope- way leviable to GST at rate of 18%

• To clarify exemption on GST in respect of services supplied by the Government to its undertaking/PSU by way of guaranteeing loans taken by such entity from banks and financial institutions

• Place of supply of B2B supply of MRO Services in respect of ships/ vessels would be location of recipient of service

 

• Levy of interest on net cash basis w.e.f. 01 July 2017

Retrospective amendment in Section 50 of the Central Goods and Service Tax Act (‘CGST Act’) with effect from 01July 2017, providing for payment of interest on net cash basis, to be notified at the earliest

• Amnesty Scheme and Rationalization of late fee for non-furnishing return 

Tax Payer	Total late fee	GST Return
A.     Tax Period: July 2017 to April 2021
Taxpayers having no tax liability	Maximum INR 500 per return	Form GSTR-3B for the above tax periods furnished between June 1, 2021 to August 31, 2021
Taxpayers having tax liability	Maximum INR 1,000 per return
B. Tax Period: May 2021 onwards
Taxpayers having no tax liability	Maximum  INR 500 per return	GSTR-1 & GSTR-3B
Taxpayers having aggregate turnover upto INR 1.5 crore in Preceding Financial Year (‘PFY’)	Maximum INR 2,000 per return
Taxpayers having aggregate turnover between INR 1.5 crore & 5 crore in PFY	Maximum INR 5,000 per return
Taxpayers having aggregate turnover above INR 5 crore in PFY	Maximum INR 10,000 per return
Composition Dealer	Maximum INR 500 per return for nil liability and Maximum INR 2,000 per return for others	GSTR-4
For all taxpayers	Reduced to INR 50 per day and to be capped to maximum of INR 2,000 per return	GSTR-7

 

• Waiver of late fees for late filing of GSTR – 3B

Aggregate Turnover	Category of Taxpayer	Tax Period	Waiver of late fees (from due date of GSTR- 3B)
More than INR 5 crores in PFY	Large taxpayers (Monthly return)	March 2021 April 2021 May 2021	For 15 days
Up to INR 5 crores in PFY	Small taxpayers (Monthly return)	March 2021 April 2021 May 2021	For 60 days For 45 days For 30 days
	Small taxpayers (Quarterly return)	January to March 2021	For 60 days

 

• Reduction in interest rate for delayed tax payments 

Category of Taxpayer	Aggregate Turnover	Tax Period	Reduced Interest Rate
Large taxpayers (Monthly return)	More than 5 crores in   PFY	March 2021 April 2021 May 2021	For first 15 days- 9%, thereafter- 18%
Small taxpayers (Monthly return)	Up to 5 crores in PFY	March 2021	For first 15 days- Nil For next 45 days- 9%, thereafter- 18%
		April 2021	For first 15 days- Nil For next 30 days – 9%, thereafter- 18%
		May 2021	For first 15 days- Nil For next 15 days – 9%, thereafter- 18%
Small taxpayers (Quarterly return)	Up to 5 crores in PFY	Q4: January to March 2021	For first 15 days- Nil For next 45 days- 9%, thereafter- 18%
Composition Scheme Taxpayer	All	January to March 2021	For first 15 days- Nil For next 45 days- 9% thereafter- 18%

 

• Extension of due date for GST Return

Forms	Period	Due date
Form GSTR-1 (Monthly taxpayers)	April 2021 May 2021	May 26 2021 June 26 2021
IFF (QRMP scheme taxpayers)	April 2021 May 2021	May 28 2021 June 28 2021
Form GSTR-4 (Composition scheme payers)	FY 2020-21	July 31 2021
Form ITC-04 (details  of goods/capital goods sent for job  work and received back)	January to March 2021	June 30 2021

• Annual return and Reconciliation Statement

1. For FY 2020 -21, the taxpayers would be able to self-certify the reconciliation statement in Form GSTR-9C, instead of getting it certified by the Chartered Accountants. In this regard, amendments in Section 35 and 44 of CGST Act made through Finance Act, 2021 shall be notified
2. Reconciliation statement in Form GSTR-9C for FY 2020-21 required to be filed by taxpayers with annual aggregate turnover above INR 5 Crores
3. Filing of Annual Return in Form GSTR 9/9A for FY 2020-21 optional for taxpayers having annual turnover upto INR 2 Crores

•  Other points 

1. Availment of ITC in terms of Rule 36(4) of the CGST Rules, 2017 to be computed on cumulatively for the months of April, May and June, 2021 in the GSTR-3B for the month of June 2021
2. Facility of filing returns through Electronic Verification Code (EVC) enabled till August 31, 2021
3. Amendments to be made in the CGST Act to make present system of filing of return in Form GSTR-1 and Form GSTR-3B as default return filing system under GST
4. Time limit for completion of various actions by any authority or by any person under the CGST Act, which falls during the period April 15, 2021 to June 29, 2021 to be extended upto June 30, 2021 subject to specified exceptions. Further, wherever the timelines for actions have been extended by the Hon’ble Supreme Court, the same would apply

 

It is to be noted that the above recommendations would be given effect through relevant Circulars/Notifications to be issued in the official gazette.