The 40th GST Council meeting took place today via video conference, chaired by the Union Finance Minister Smt. Nirmala Sitharaman. Significant announcements in terms of late fee and interest waivers were made, and other matters relating to the inverted tax structure and GST compensation were discussed at the meeting. This is the first meeting that has taken place since the COVID-19 pandemic outbreak in India, and the resulting lockdown.
To ease the burden on taxpayers, the Council has decided to reduce or waive all late fees on the filing of GST returns for the period July 2017 to January 2020. Taxpayers with a nil liability are not required to pay any late fee. Other taxpayers will need to pay a late fee limited to Rs.500 per return, if they file their returns between 1st July 2020 and 30th September 2020.
Relief has been granted to MSMEs with turnover up to Rs.5 crore, by reducing the interest rate from 18% to 9% for February, March and April 2020, provided those returns are filed before their due dates, which have been staggered up to 6th July 2020. For May, June and July 2020, the due dates for filing returns have been extended up to 30th September 2020; the staggered dates are yet to be notified. Interest and late fees will not be applicable for those returns that were filed in this period.
A one-time extension has been granted to taxpayers who could not revoke the cancellation of their GST registrations. The application for the revocation of cancellation of the GST registrations can be made until 30th September 2020, for all cases where the registrations have been cancelled before 12th June 2020.
The Council also discussed the inverted duty structure pertinent to the textile, footwear and fertiliser industries. However, no decision has been taken in this regard. The Finance Minister also said that items concerning GST rate reductions such as pan masala, brick kilns, etc., would be taken up at the next regular GST Council meeting.
A one-agenda meeting will be held in July 2020 to discuss compensation cess, and the possibility of borrowing from the market, to fund the shortfalls in compensation cess collections.
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