THE 43RD GST COUNCIL MEETING’S CONTENTS
Smt. Nirmala Sitharaman, Union Finance & Corporate Affairs Minister, chaired the 43rd GST Council meeting. Shri Anurag Thakur, Union Minister of State for Finance and Corporate Affairs was also present at the meeting. The GST Council has issued the following suggestions on GST rates on goods and services, and also modifications to GST legislation and procedure:
- COVID-19 RELIEF
Medical oxygen, oxygen concentrators, and other oxygen storage and transportation equipment, as well as several diagnostic markers test kits and COVID-19 vaccinations, have all been recommended for complete IGST exemption. This exemption will be available until August 31, 2021. It’s worth noting that some goods are already free from Basic Customs Duty.
Additional relief in specific COVID-19 items once the Group of Ministers (GoM) publishes its report on June 8, 2021. In terms of specific goods, it was resolved to form a Group of Ministers (GoM) to investigate the need for immediate further assistance for COVID-19-related specific goods. The GOM must submit its report by June 8, 2021.
The GST rate for Diethylcarbamazine (DEC) pills has been suggested for lowering to 5% to help the Lymphatic Filariasis (endemic) reduction program being done in partnership with WHO (from 12 %).
In regards to GST rates, several clarifications/clarificatory adjustments have been requested. Among the most important are: –
- IGST is imposed on the repair value of items that are re-imported after repairs.
- Even if these items are sold individually, a GST rate of 12% will apply to parts of sprinklers/ drip irrigation systems that come under tariff category 8424 (nozzle/laterals).
SERVICES
- To clarify, services provided to an educational institution, such as an Anganwadi, in the form of foodservice, including midday meals under the government-sponsored midday meals plan, are free from GST.
- To clarify, services are given by the National Board of Examination (NBE), or comparable Central or State Educational Boards, in the nature of examination, including entrance examinations, where a price is collected for such examinations, and input services pertaining thereto are free from GST.
- To make suitable revisions to the relevant notification to include an explicit provision stating that landowner promoters may claim credit for GST charged to them by developer promoters on such flats that are afterward sold by the land promoter and on which GST is paid. The developer promotor shall be permitted to pay GST on such flats at any time before or at the time of issuance of the completion certificate.
- To extend the same exemption granted to MRO units in the aviation sector to MRO units in the shipping/vessels sector, in order to provide domestic shipping MROs with a fair playing field with international MROs.
- Exemption from GST for services involving the processing of wheat/paddy into flour. In such a composite supply, the value of items does not surpass 25%. Otherwise, such services would be subject to GST at a rate of 5% if provided to any GST-registered person, including a TDS-registered person.
- To make it clear that GST is due on annuity payments received as a delayed payment for road construction. The exemption applies to annuities paid for services provided by way of access to a road or a bridge.
- To clarify, services provided to a government entity through the building of a ropeway are subject to 18% GST.
- To clarify, services provided by the government to its undertaking/PSU in the form of guaranteeing loans obtained from banks and financial institutions are free from GST.
MEASURES FOR IMPROVING TRADE FACILITIES:
1. Amnesty Program to give taxpayers with exemption from late fees for awaiting returns:
The late charge for non-furnishing FORM GSTR-3B for the tax periods from July 2017 to April 2021 has been decreased/waived as follows to give assistance to taxpayers: –
i. late charge capped at Rs 500/- (Rs. 250/- each for CGST and SGST) per return for taxpayers who did not have any tax liability for the mentioned tax years;
ii. late charge capped at Rs 1000/- (Rs. 500/- each for CGST and SGST) per return for other taxpayers;
If GSTR-3B returns for these tax years are filed between June 1, 2021, and August 31, 2021, the late charge is reduced.
The late charge levied under section 47 of the CGST Act has been simplified:
To ease the impact of late fees on smaller taxpayers, the late charge upper maximum is being simplified to align late fees with taxpayers’, tax liability/turnover, as follows:
- The late penalty for late filing of Forms GSTR-3B and GSTR-1 will be set at Rs. 100 per return.
- The late fee would be set at Rs 500 (Rs 250 CGST + Rs 250 SGST) for taxpayers who have no tax due in GSTR-3B or no outward supplies in GSTR-1.
Other taxpayers should know:
- For taxpayers with an Annual Aggregate Turnover (AATO) of up to Rs 1.5 crore in the previous year, the late charge would be set at Rs 2000 (1000 CGST+1000 SGST).
- For taxpayers with an AATO of between Rs 1.5 crore and Rs 5 crore in the previous year, the late charge would be set at Rs 5000 (2500 CGST+2500 SGST);
- Late fees will be set at Rs 10,000 (5000 CGST+5000 SGST) for taxpayers with an AATO of more than Rs 5 crores in the previous year.
- If the tax due in the return is zero, the late charge for failure to file FORM GSTR-4 by composition taxpayers will be set at Rs 500 (Rs 250 CGST + Rs 250 SGST) per return, and Rs 2000 (Rs 1000 CGST + Rs 1000 SGST) per return for others.
- The late charge for late filing of FORM GSTR-7 would be lowered to Rs.50 per day (Rs. 25 CGST + Rs. 25 SGST) and capped at Rs 2000 per return (Rs. 1,000 CGST + Rs. 1,000 SGST).
Annual Return Simplification for Fiscal Year 2020-21:
- Notification of amendments to sections 35 and 44 of the CGST Act enacted by the Finance Act, 2021. This would make it easier for taxpayers to comply with the need to submit a reconciliation statement in FORM GSTR-9C since they would be able to self-certify the statement rather than having it certified by chartered accountants.
- For taxpayers with annual revenue of up to Rs 2 crore, filing an annual return in FORM GSTR-9 / 9A would be optional in FY 2020-21.
- For the fiscal year 2020-21, taxpayers having a yearly aggregate turnover of more than Rs 5 crore will be required to file a reconciliation statement in Form GSTR-9C.
- Retrospective change to section 50 of the CGST Act, effective July 1, 2017, providing for interest payment on a net cash basis, to be published as soon as possible.
ADDITIONAL MEASURES
The GST Council suggested that certain parts of the Act be amended to make the current GSTR-1/3B return filing system the default GST return filing system.
HOW TO CLAIM ATAL BEEMIT VYAKTI KALYAN YOJANA (ABVKY) UNDER ESI SCHEME
The ESI Corporation (ESIC) has stated that the “Atal Beemit Vyakti Kalyan Yojana” (ABVKY) has been extended for another year, till June 30, 2021, and that the qualifying conditions for the period between March 24, 2020, and December 31, 2020, have been simplified. The Corporation had previously announced (on a trial basis) a new cash benefit under ABVKY that would pay financial compensation to insured people who were made unemployed from July 1, 2018, to June 30, 2020. This has been extended till the end of June of the next year.
According to the corporation’s relaxed (eligibility) conditions, the insured person must have worked for at least two years prior to losing his or her job and must have contributed for at least 78 days in the contribution period immediately preceding unemployment and a minimum of 78 days in one of the three contribution periods in the two years prior to losing his or her job. It has increased unemployment aid to 50% of average daily earnings for the preceding four contribution periods, subject to a maximum of 90 days of unemployed, with the claim paying for the whole month. The claim must be filed within 30 days of the date of the employment termination.
The insured individual can either scan and upload the credentials (AB1 Claim Form, Aadhaar, bank account data, etc.) online or send a signed physical copy to the ESIC branch office in concern. The ABVKY scheme’s initial qualifying criteria would apply to people who were laid down on or before March 23, 2020, and on or after January 1, 2021.
Claims for relief can be submitted online at www.esic.in, and by letter or in-person to the relevant ESIC Branch Office, together with an affidavit, photocopy of the Aadhaar Card, and bank account details.
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