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GST Council Meet- Highlights

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Nireka Dalwadi

Last updated on April 23rd, 2021

GST council meeting key highlights, important updates, deadlines and extensions, and major announcements.

Jump To:
42nd Meet
41st Meet
40th Meet
39th Meet

42nd GST Council Meeting Highlights:

Date held: October 6, 2020

Chaired by: Union Finance Minister Nirmala Sitharaman

The 42nd Meet was supposed to be focused around the compensation to states and if the Centre and State will reach a consensus. Although there was no consensus, there are a few very important decisions and amendments that have taken place. These include relief to small taxpayers and enhancement of features of return filing.

Key Highlights

41st GST Council Meeting Highlights:

Date held: August 27, 2020

Chaired by: Union Finance Minister Nirmala Sitharaman

The Key Highlight:

The 41st Council Meet was all about providing compensation to states to bridge the revenue-expenditure gap due to the GST shortfall. The states were guaranteed payment for any loss of revenue in the first five years of GST implementation from 1st July 2017. The shortfall is calculated assuming a 14% annual growth in GST collections by states. The base year taken is 2015-16.

The Revenue Secretary mentioned that the GST shortfall in FY 21 stands at INR 2.35 lakh crore – out of which only INR 97k crore is due to GST implementation and the rest is due to the pandemic. The center is now bound to compensate. Attorney-General said that GST Compensation has to be paid for a transition period – from July 2017 to June 2022. And states with an annual growth rate of less than 14% will be compensated for the shortfall until 2022. The states have been given 2 options:

Option 1:  The center will facilitate states through RBI in getting loans – which is INR 97K crore. This amount can be repaid after 5 years on the collection of cess. The states will have to pay a reasonable rate of interest. This boils down to borrow less and get cess later. 

Option 2: The states can borrow The entire INR 2.35 lakh crore directly from the RBI. This, in turn, boils down to borrow more and pay for it using the cess collected in the transition period.

Along with this, the center will provide relaxation of 0.5% in states’ borrowings under the FRBM Act. This will be eligible for a sum of INR 2.03 lakh crore. The above arrangements remain valid only for the current Financial Year 2020-21. A new Council meet will reevaluate the situation in April 2021. 

The states have asked for a 7-day window to think about the options.

40th GST Council Meeting Highlights:

Date held: June 12, 2020

Chaired by: Union Finance Minister Nirmala Sitharaman

The 40th GST Council meet was the first to be held after the COVID-19 breakout in India. A lot of discussions like GST compensation, inverted tax structure and rate rationalization were postponed to the next council meeting.

Key highlights:

1. Reduction in late fee for past returns:

2. Small taxpayers / MSME filers:

3. One-time extension for revoking cancellations of GST registration-

The period for seeking revocation has been extended till September 30, 2020. This is applicable for all registrations which were cancelled till June 12, 2020. This will come as a relief for taxpayers who could not get their GST registrations restored on time. The original time limit is only 30 days from the date of issue of cancellation order

4. A special one-agenda meeting

The council members have set a special one-agenda meeting in July 2020. The purpose is to discuss the GST compensation to states and Union Territories and its subsequent funding. The GST collections have been 45% of the usual levels in the past 2 months.

39th GST Council Meeting Highlights:

Date held: March 14, 2020

Chaired by: Union Finance Minister Nirmala Sitharaman

Infosys Chairman, Mr. Nandan Nilekani to present progress updates about GST It systems at the next three GST Council Meetings. The 39th GST Council meet took an array of decisions. Let’s take a look at it.

Key highlights:

1. Deferment of the new GST return system and e-invoicing

The present return system of filing GSTR-3B and GSTR-1 will be continued until September 2020.

2. Important changes to GST rates:

The following changes will take effect from April 1, 2020.

3. Interest on delayed payment:

The interest for delayed GST payment shall be calculated on the net tax liability. This will be given retrospective effect from July 1, 2017.

4. GSTR-9 and GSTR-9C:

5. Waiver and extension of due dates:

6. Know Your Supplier:

A new facility called “Know Your Supplier” was introduced. This will enable the registered taxpayer to have necessary information about the suppliers with whom they conduct or intend to do business.

7. Revocation of cancellation:

The period for seeking revocation has been extended till June 30, 2020. This is applicable for all registrations which were cancelled till March 14, 2020. The extension is a one-time measurement that will come as a relief for taxpayers who could not get their GST registrations restored on time.

8. Other highlights:

Got Questions? Ask Away!

  1. Hey @HarshitShah

    Goods/sectors that are out of the GST ambit include alcohol and specified petroleum products like petroleum crude, high-speed diesel, motor spirit, aviation turbine fuel and natural gas. Alcohol for human consumption continues to attract state excise duty and VAT. Tobacco and tobacco-based products attract both excise duty and GST. Taxes such as stamp duty, toll tax, road tax, electricity duty etc. are not part of GST.

    Hope this helps!

  2. Hey @HarishMehta

    Customs duty and cess as applicable along with IGST+ GST compensation cess. IGST and GST compensation cess shall be paid after adding all customs duty and customs cess to the value of imports.

    Hope this helps!

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