02/06/2021
Key highlights of 43rd GST Council meet:
1) Adhoc exemptions granted for COVID-related equipment. Import of any such item is Exempt till August 31, 2021
2) In view of rising Black Fungus cases, Amphotericin B has also been included in the exemptions.
3) Current exemptions for COVID relief goods extended up to August 2021
4) GoM committee to be formed by tomorrow to look into further exemptions that can be provided on account of the COVID-19 relief measure. The businesses might be slightly disappointed having to further wait up to June 8 to get a final decision on the additional GST exemptions for Covid relief activities, when the GoM will submit its report.
(Group of Ministers will be quickly formed (preferably within two days) to submit a report within 10 days, i.e., on or before June 8, detailing whether any further reductions need to be done; the rates will be decided by them.)
5) GST compensation cess: Same formula as last year will be adopted this year too. The rough estimate is that the Centre will have to borrow Rs 1.58 lakh crore, which will be passed on to states as back-to-back loans.
6) Special Session would be held to deliberate whether the compensation should be given to the states beyond the original period promised of five years
(A special session will be held to discuss compensation cess alone as we are in the last of the five years of the 14 percent compensation-protected revenue arrangement. At the session, a decision will be taken on whether the compensation cess will be extended beyond July 1, 2022, how it will be collected, how much it will be, etc.)
7) To ease the compliance burden, annual return filing will continue to be optional for FY 2020-21 for small taxpayers, having a turnover of less than Rs 2 crore.
😎 Reconciliation statements for FY 2020-21 will only have to be furnished by taxpayers whose turnover is Rs 5 crore or more.
(Council has recommended amendments to the CGST Act to allow self-certification of reconciliation statements instead of getting them done by chartered accountants.)
Additionally, to provide relief to small taxpayers, who constitute 89 percent of GST payers, an Amnesty Scheme has been recommended to reduce late fee payable.
The late fee have also been rationalised. The rationalised late fee and the decision to reduce the maximum amount of late fee for small taxpayers will come into effect for future tax periods. This will provide long-term relief to small taxpayers.
9) The GST Council also decided to allow taxpayers to file their pending returns and avail the benefits of this Amnesty scheme with reduced late fees.
10) As for Quarterly Return filing, the modalities of the scheme need to be worked out and the law committee will be looking into it.
no. 43
