39th GST Council Meeting Updates
GST Council conducted its 39th meeting on 14th March 2020 in New Delhi. Here are the major updates discussed in the meeting:
E-Invoicing and QR Code updates
- Due dates to implement E-Invoicing and QR Code is extended to 1st October 2020.
- Taxpayers in classes such as Insurance, Banking companies, Financial institution, Non-banking financial institution, GTA, Passenger transportation service, etc will be exempted from issuing E-Invoices or capturing QR code.
- The current system of filing GST Returns such as GSTR 1 and GSTR 3B will continue until September 2020.
Modified GST Rates
The GST Council modified the GST rate structure on various items to correct the inverted duty structure. These changes will be effective since 1st April 2020.
- Mobile Phones and specified parts that currently have a GST rate of 12% will attract 18% GST.
- All Matches will attract 12% GST as opposed to the earlier 5% on Handmade matches and 18% on other matches GST rates.
- Tax rates on aircraft Maintenance, Repair, and Overhaul (MRO) services are reduced to 5% from the earlier 18% with full ITC.
Extended due dates
- Filing GSTR 9C is now optional for taxpayers with less than Rs. 5 crores aggregate turnover in the financial year 2018-19.
- Due dates to file GSTR 9 and GSTR 9C for the financial year 2018-19 is moved to 30th July 2020.
- Taxpayers with less than Rs. 2 crores aggregate turnover in the financial year 2017-18 and 2018-19 will not attract late fees for delayed filing of GSTR 9 and GSTR 9C.
- For Taxpayers in Ladakh, GSTR 3B due dates for July 2019 to January 2019 is extended to 24th March 2020. A similar extension is recommended on GSTR 1 and GSTR 7 too.
- Bulk refund claims can now be processed across all financial years to facilitate exporters.
Know Your Supplier
GSTN will introduce a new project called Know Your Supplier to help taxpayers have access to basic information about the suppliers they conduct or intend to conduct business with.
- Due date to finalize on the e-Wallet scheme extended to 31st March 2021.
- Current exemptions from IGST and Cess on imports made under AA/EPCG/EOU schemes will continue until 31st March 2021.
Law and Procedure Changes
- Interest on delayed GST payment will be charged on the Net cash tax liability. This revision will be effective for all GST payments from 1st July 2017.
- Taxpayers who were unable to avail the option of special composition scheme under Notification No. 2/2019-Central Tax (Rate) dated 07.03.2019 by filing FORM CMP-02 do not have to file their GSTR 1 for 2019-20.
- Taxpayers who cancelled their GST registrations until 14th March 2020 can now file to revoke cancellation until 30th June 2020. The time extension to file application is a one-time measure to accommodate taxpayers who are willing to continue conducting their business.
- GSTN is introducing a special procedure for corporate debtors who are undergoing corporate insolvency resolution process under the provisions of the Insolvency and Bankruptcy Code, 2016. This procedure will enable them to comply with the provisions of GST Laws during the CIRP period.
- In light of the merger of Dadra and Nagar Haveli & Daman and Diu effective from 26th January 2020, GSTN has a special procedure that will help taxpayers complete their transition within 31st May 2020.
- Passing the ITC of newly registered taxpayers will be restricted until physical verification of premises and Financial KYC of the taxpayer.
Circulars and other Amendments
- Clarifications issued on the allocation of ITC for business reorganization under Section 18 (3) of CGST Act read with Rule 41(1) of CGST Rules.
- Procedure created for ITC reversal of capital goods partly used for effecting taxable supplies and partly for exempt supplies under CGST rule 43 (1).
- A cut-off value fixed for the value of export supply so that refunds on zero-rated supplies can be calculated.
- Refunds will be allowed to be processed in both Cash and Credit in case of excess.
- Aadhaar authentication will be optional for new taxpayer registrations.