Key outcome in 39th Council Met related to law and procedure

The 39th GST Council meeting was held on 14-03-2020 under the Chairmanship of Union Finance and Corporate Affairs Minister Smt Nirmala Sitharaman. The meeting was also attended by Union Minister of State for Finance & Corporate Affairs Shri Anurag Thakur besides Finance Ministers of States & UTs and senior officers of the Ministry of Finance. The Council has made the following recommendations:

1. Interest on delayed payment: Interest for delay in payment of GST to be charged on the net cash tax liability w.e.f. 01.07.2017 (Accordingly law will be amended retrospectively).
2. Application for revocation of cancellation of GST registration: Where registrations have been canceled till 14.03.2020, application for revocation of cancellation of registration can be filled up to 30.06.2020 (extension of the period of application as a one-time measure to facilitate those who want to conduct business).

3. Annual Return:
   • MSMEs will be given relaxation from the furnishing of Reconciliation Statement in FORM GSTR-9C, for the financial year 2018-19, for taxpayers having aggregate turnover below Rs. 5 crores;
   • The due date for filing the Annual return and the Reconciliation Statement for the financial year 2018-19 is extended to 30.06.2020; and
   • Late fees will not be levied for delayed filing of the Annual Return and the Reconciliation Statement for Financial Year 2017-18 and 2018-19 for taxpayers with aggregate turnover less than Rs. 2

4. Know Your Supplier facility: A new facility called ‘Know Your Supplier’ will be introduced which will enable every registered person to have some basic information about the suppliers with whom they conduct or propose to conduct

5. Composition Scheme: The requirement of furnishing FORM GSTR-1 for 2019-20 to be waived for taxpayers who could not opt for availing the option of special composition scheme under notification No. 2/2019-Central Tax (Rate) dated 07.03.2019 by filing FORM CMP-02. 

6. Special procedure in Insolvency and Bankruptcy Code, 2016: A special procedure is being prescribed for registered persons who are corporate debtors under the provisions of the Insolvency and Bankruptcy Code, 2016 and are undergoing the corporate insolvency resolution process, so as to enable them to comply with the provisions of GST Laws during the CIRP
7. Extension of return filing due date for the Union Territory of Ladakh: Extension of due dates for FORM GSTR-3B for the month of July 2019 to January 2020 till 24^th March 2020 for registered persons having principal place of business in the Union territory of Ladakh. A similar extension is also recommended for FORM GSTR-1 & FORM GSTR-7.
8. Deferment of E-invoice and QR Code: GST council has given a list of a certain class of registered persons who will be exempted from issuing e-invoices or capturing dynamic QR codes, they are as follows:

• Insurance company
• Banking company
• Financial Institution
• Non-banking financial institution
• Goods Transport Agency (GTA)
• Passenger transportation service, etc.
• Further, the dates for implementation of e-invoicing and QR Code is extended to 01.10.2020.

9. Deferment of e-wallet Scheme:

• Extension of the time to finalize e-Wallet scheme up to 31.03.2021; and
• Extension of the present exemptions from IGST and Cess on the imports made under the AA/EPCG/EOU schemes up to 31.03.2021.

10. Deferment of new return: GST Council has deferred the implementation of a new return till September 2020. Till this time the existing system of furnishing FORM GSTR-1 and FORM GSTR-3B will be continued.

11. Reversal of Input Tax Credit: Procedure for reversal of input tax credit in respect of capital goods partly used for effecting taxable supplies and partly for exempt supplies under rule 43 (1) (c) to be amended.
12. Ceiling on the value of export supply for calculation of refund: Ceiling to be fixed for the value of the export supply for the purpose of calculation of refund on zero-rated
13. Refund in case of excess payment of tax: To allow for a refund to be sanctioned in both cash and credit in case of excess payment of
14. Recovery of refund if export proceeds are not realized within the time prescribed under FEMA: To provide for recovery of refund on the export of goods where export proceeds are not realized within the time prescribed under FEMA.
15. To operationalize Aadhaar authentication for new
16. Other new initiatives:

• Seeking information return from Banks;
• To curb fake invoicing and fraudulent passing of ITC, restrictions to be imposed on the passing of the ITC in case of new GST registrations, before physical  verification of premises and Financial KYC of the registered

17. Issuance of circulars in respect of:
    1. Clarification in the apportionment of ITC in cases of business reorganization under section 18 (3) of CGST Act read with rule 41(1) of CGST Rules;
    2. Appeals during non-constitution of the Appellate Tribunal;
    3. Clarification on refund related issues; and
    4. Clarification on the special procedure for registered persons who are corporate debtors under the provisions of the Insolvency and Bankruptcy Code, 2016, undergoing the corporate insolvency resolution process.

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