India:
Decisions In The 39th GST Council Meeting Held On 14 March 2020
20 March 2020
Nexdigm Private Limited
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E-invoicing and QR Code
- The date of implementation of
E-invoicing and Quick Response (QR) code has been deferred to 1
October 2020
- Certain classes of registered persons
(insurance, banking, financial institution, non-banking financial
company, goods transport agency, passenger transportation, etc.) to
be exempted from issuance of e-invoices or capturing QR code
Regular compliances
- Existing system of filing return in
FORM GSTR-1 and GSTR-3B to continue till September 2020.
- The new return system would be
introduced in a phased manner.
GST Annual return and GST Audit
S. no.
|
Particulars
|
Proposed amendment
|
1
|
Taxpayers with aggregate turnover less than INR 2 crores
|
Late fees has been waived for delayed filing of GSTR-9 and
GSTR-9C for FY 2017-2018 and FY 2018-2019.
|
2
|
Taxpayers with aggregate turnover of INR 2 crore and above but
less than INR 5 crores
|
Relaxation for filing GSTR-9C (reconciliation statement) for FY
2018-2019. Annual return in GSTR-9 would be required to be filed as
there is no relaxation provided.
|
3
|
Taxpayers with aggregate turnover more than INR 5 crores
|
The due date to file GSTR-9 and GSTR-9C for FY 2018-2019 for all
the taxpayers has been extended till 30 June 2020.
|
Amendment in law / rules
- Section 50 of CGST Act, 2017 to be
amended retrospectively from 1 July 2017 to provide for payment of
interest on delayed payment of GST only on net cash tax
liability
- It has been proposed to allow refund
of excess payment of tax through both cash and credit
- It has been proposed to prescribe a
mechanism for reversal of ITC in case of capital goods party used
for affecting taxable supplies and party for exempt supplies
Export related
- It has been proposed to prescribe a
ceiling on value of export supplies for the purpose of calculation
of refund on zero rated supplies
- Bunching of refund claims has been
proposed to be allowed across financial years to facilitate
exporters
- Recovery provisions to be introduced
where refund isgranted to the exporter and exports proceeds are not
realized within the timelines prescribed under Foreign Exchange
Management Act
- Present exemptions from IGST and Cess
on imports made under Advance Authorization scheme /Export
Promotion Capital Goods scheme / by Export Oriented Unit has been
extended upto 31 March 2021
Trade facilitation measures
- As a one-time measure, an application
for revocation of cancellation of registration can be filed till 30
June 2020 with respect to the registrations which have been
cancelled till 14 March 2020
- A new facility of 'Know your
supplier' would be introduced to enable every registered person
to have basic information about the suppliers with whom they
conduct/propose to conduct business
Initiatives to curb frauds
- In order to ensure smooth transition
to new return system and also to plug the problem of tax evasion,
the outward supplies' liability as disclosed in GSTR-1 to be
linked with GSTR-3B. Further, the ITC as availed in GSTR-3B to be
linked with the ITC as appearing in GSTR-2A
- Passing of ITC by newly registered
taxpayers to be allowed after physical verification of premises and
conduct of financial 'Know Your Client'
Rationalization of GST rates (effective 1 April 2020)
S. no.
|
Particulars
|
Old GST Rate
|
New GST Rate
|
Remarks
|
1
|
Mobile Phones and specified parts
|
12%
|
18%
|
NA
|
2
|
Handmade matches
|
5%
|
12%
|
Rates made uniform to remove ambiguity in classification
|
3
|
Other matches
|
18%
|
12%
|
4
|
Maintenance, repair and Overhaul services (MRO) on aircraft
|
18%
|
5%
|
- 100% ITC to be available
- Place of supply has been changed from performance based to the
location of recipient so that MRO services for overseas customer
can qualify as export.
|
Circulars to be issued on following subject matters for
clarifying –
- Apportionment of ITC in case of
business re-organization
- Appeals during non-constitution of
Good and Services Tax Appellate Tribunal
- Refund issues
- Special procedure for registered
persons who are corporate debtors under Insolvency and Bankruptcy
Code, 2016 and for thoseundergoing corporate insolvency resolution
process
|
|
Our Comments
The decision of the GST council to extend the due date for
filing GSTR-9 and GSTR-9C for FY 2018-2019 is a welcome move, which
will provide a breather for all the taxpayers. Further, the
decision to defer the implementation of e-invoicing, QR code and
new return system has been made keeping in mind the operational and
IT readiness of both government and industry. The decision to levy
interest on net tax cash liability instead of gross tax liability
has come as a huge relief to the industry and will help reduce the
mounting litigations. In a nutshell, despite the dampener relating
to increase in the GST rate of mobile phones, the decisions taken
by the GST Council focus majorly on trade facilitation, curbing
frauds, and removal of roadblocks for industry.
Note
This alert is based on the press release issued by the GST Council.
Relevant notifications are yet to be issued by the government.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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