38th GST Council meeting took place on 18 December 2019, Wednesday. It was presided by our Honourable Union FM Nirmala Sitharaman and conducted in New Delhi. Following are the highlights of the meeting:
1. Due dates extended for GSTR-9 and GSTR-9C for FY 2017-18: The due date of GSTR-9 and GSTR-9C are extended further till 31 January 2020 from the earlier date of 31 December 2019. It was done to consent more time for taxpayers to use the offline tool of GSTR-9C that will be made available on 21 December 2019.
2. Provisional ITC claim in GSTR-3B further restricted:The amount of Input Tax Credit availed on a provisional basis restricted to 10% from the earlier 20%, where invoices or debit notes are not reflected in GSTR-2A. Hence, invoice matching must be frequently done and vendor communication becomes challenging.
3. Late fee waiver on GSTR-1 through amnesty scheme:Waiver of late fee for GSTR-1 for tax periods between Jul 17 and November 19, if filed by 10 January 2020. If the taxpayer does not still file for more than two consecutive tax periods, then the e-way bills of such taxpayers will be blocked from generation.
4. Standard Operating Procedure (SOP) in case of non-filing of GSTR-3B:The SOP is to be released for the benefit of tax officers about actions taken for non-filing of GSTR-3B. These will assist in blocking or reversal of fake ITC availed
5. Due dates for GST returns extended for certain categories of taxpayers: The due date extension for GST returns for some North Eastern States (November 2019) to be extended till 31st Dec 2019
6. The GST Council decided to levy 28% tax on all lotteries:
7. GST Rate rationalized to remove inverted tax structure: The GST Council imposes a uniform rate of 18% from earlier 12% on bags belonging to HSN code 3923/6305 from 1 January 2020 (woven and non-woven bags and sacks of polythene or polypropylene strips or the like, whether or not laminated, of a kind used for packing of goods including FIBC). It effectively removes the inverted tax structure.
8. GST exemption for the industrial land developers: Supply should be a long-term lease of either industrial or financial infrastructure plots. The Central or State Government holds 20% or more shares in the developer’s capital from the earlier share of at least 50%. Boosting the slumping real estate sector, justifying the tax rates on lotteries, and making refunds process smooth for the exporters were some of the major topics as the agenda in the 38th GST Council meeting. The government could bring certain goods under a temporary cess of 2%, especially those products that are currently placed in the 5% and 18% brackets to boost the revenue shortfalls.
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