GST Council Meeting Highlights: Finance Minister Nirmala Sitharaman today announced major relief for small taxpayers with an aggregate turnover of less than Rs 5 crore. Nirmala Sitharaman cut the interest rate on late submission of returns for the month of February, March, and April from 18 per cent to 9 per cent. The government also announced that there will be no late fee for filing GSTR 3B returns with no liability and pending from July 2017 to January 2020. However, for those with liabilities, the maximum late fee has been capped to Rs 500. FM Sitharaman underlined that no discussion on GST rate cut took place in the meeting and the decision on issues related to inverted duty structure were also postponed, however, she added that the council is looking at such issues, especially in textile, footwear, and fertiliser sectors. Amid the revenue crisis, the government also said that GST council is thinking over borrowing to fund compensation. In another major decision, the government allowed taxpayers, who could not get cancelled GST registrations restored in time, to apply for revocation of cancellation of registration up to September 30, 2020. GST Council met today for the first time after the nationwide lockdown. Finance Minister Nirmala Sitharaman chaired the 40th GST Council meeting through video conferencing, in which, Anurag Thakur, finance ministers of states & UTs, and senior government officers also participated.
The primary agenda towards compensation to be made to States, has not been taken up by the Council and would be discussed by way of a Special Council Meeting with the States, in July 2020. The uncertainty of compensation settlement measures has created an unrest among the industry, attempting to understand the possibility of any form of recovery that may affect taxpayers directly – Jigar Doshi, Founding Partner-TMSL
It is a welcome decision by the Finance Minister of reducing the interest rate for late furnishing of GST returns for Feb, Mar and April 2020, beyond July 6, 2020, for small taxpayers whose aggregate turnover is up to Rs 5 crore. Also, the rate of interest which has been reduced from 18% to 9% per annum till September 30, will benefit lakhs of small players. The majority of small taxpayers would also benefit from the move of providing a waiver of late fees and interest if they file the form GSTR-3B for the supplies affected – Ketan Kothari, Director of Arvog.
India’s forex reserves crosses $500 billion mark for the first time.
All India year-on-year inflation rates for Consumer Food Price Index (CFPI) for the month of May 2020 for rural, urban and combined sectors are 9.69%, 8.36% and 9.28% respectively.
For the month of April 2020, the Index of Industrial Production stood at 56.3, compared to 126 in the same month last year. The Indices of Industrial Production for the Mining, Manufacturing and Electricity sectors for the month of April 2020 stand at 78.3, 45.1 and 126.1 respectively – MOSPI
Due to the impact of nationwide lockdown on the items being produced by the establishments during the month of April, 2020, a number of responding units have reported NIL production. Consequently, it is not appropriate to compare the IIP of April, 2020 with earlier months – MOSPI
The government does not release CPI data for May and growth of industrial production (IIP) for the month of April, saying that the numbers are not comparable.
There was no big bang announcement nor was there any concrete revenue augmentation measures. Contrary to expectations, many of the pain points of the industry such as GST paid on bad debts was not addressed in the meeting, which is disappointing – Rajat Bose, Partner, Shardul Amarchand Mangaldas & Co.
The decisions to provide relief to small taxpayers in terms of filling GST returns are highly appreciable to mitigate the daunting impact of pandemic COVID-19 and will enhance ease of doing business for small taxpayers in the coming times – Dr D K Aggarwal, President, PHD Chamber of Commerce and Industry.
The move of not increasing GST rates on non-essential items is a welcome decision and will positively affect customers since the economy is already on its knees. Relief for small taxpayers such as the reduction in the interest rate and waiver of late fees and interest is also worth appreciating. It would be interesting to see what decision is being taken at the state level in July – Imaan Javan Director of operations at Suntuity REI.
The government could hold a special GST Council meet in July where it will discuss compensation cess. The issue of compensation cess has been something that has kept the states and the center government at loggerheads in the past.
While time-related concessions have already been announced on payment of taxes, it is important that interest rates on delayed payment of taxes must also be waived off at least for the next three months for all businesses. Businesses also hope that the condition of reversal of Input Tax Credit (ITC) on damaged goods is waived off for the time being – Ramdas Kambale, Senior Vice President, Vetphage Pharmaceuticals Pvt Ltd
The previous announcements of economic stimulus will be helpful in resuming business but right now there is a need for tax concessions for the ongoing quarter so that they can survive the losses. This will be beneficial for manufacturing startups, who, under the ambit of GST, has been paying tax for a lesser turnover than the previous tax structure.’ Said Mr. Dhimant Parekh, Founder & CEO, The Better Home.
GST Council meet has raised hopes in the industry that the government will take necessary action to address the losses incurred due to the near-absence of sales and disrupted production. The decision to charge no late fees in case of late filing of returns for the period between July 2017 to January 2020 by those without tax liabilities is a welcome move – Dhimant Parekh, Founder & CEO, The Better Home.
Amidst the coronavirus pandemic, while India sat inside to blunt the sword of the pandemic, GST collections have fallen. GST collections for April stand at around Rs 43,000 crore while collections in March were approximately at Rs 61,543 crore.
Allowing input tax credit for goods and services used in CSR expenditure, GST paid on additional health insurance premiums due to COVID-19, masks, hand sanitizers etc. to be used in offices, was one relaxation/ clarification that the businesses were looking forward to. Guess, one would now need to wait for the next meeting, to get clarity on this critical business expenditure – Harpreet Singh, Partner, Indirect Tax, KPMG in India
For small taxpayers, with aggregate turnover up to Rs 5 crore, for the supplies effected in month of February, March, and April this year the rate of interest for late furnishing of return for the said months beyond specified dates (Staggered up to July 6) is reduced from 18% per annum to 9% per annum till September 30 this year. In other words, small taxpayers will not be charged any interest till the notified date of relief and thereafter 9% interest will be charged till the end of September.
On expected lines, relief by way of the waiver/ reduced late fees and interest for delayed filings and payment of taxes by dealers with turnover less than Rs 5 crores has been announced. This is logical as many taxpayers were unable to undertake compliances during the lockdown and late fees or interest could have been a bit harsh – Harpreet Singh, Partner, Indirect Tax, KPMG in India
Finance Minister Nirmala Sitharaman, today said that discussion on taxing pan masala will hopefully be taken up at GST Council‘s next regular meeting, news agency PTI reported.
The government is faced with a tough balancing act. On one hand, it needs robust GST collections to help meet its regular plus the extraordinary nature of expenses during the pandemic. On the other hand, businesses are looking for reliefs from government to help them tide the major disruptions, loss of revenue and uncertainties. The announcements made in today’s GST council meeting are a reflection of the tight balancing act that the government has on hand – Saloni Roy, Senior Director, Deloitte India.
The Finance Minister said that the GST council will discuss compensation cess and will also mull borrowing to fund compensation. Finance Minister Nirmala Sitharaman has also said that the inverted duty structure has been hitting GST collection.
The meeting proposed in July to exclusively discuss issues relating to the adequacy of the compensation cess collections and the ways to manage the same should also consider the collections during the recent period of business curtailment – MS Mani, Partner, Deloitte India.
Providing compliance relief, even beyond September if required, to all businesses is essential at the present stage where the primary focus has to be on business revival and working capital management – MS Mani, Partner, Deloitte India
Almost all the reliefs announced in GST Council Meeting are more around procedural compliance such as late fees waiver, relaxation in filing due dates and the substantive measures are still awaited. Whilst the procedural measures will help certain section of GST payers still it may be noted that, in the long-run, only substantive GST measures would help GST payers sail over the challenging COVID-19 times- Pritam Mahure, a chartered accountant.
The decision of GST council is in-line with the expectations and following the global action points, it has capped the levy of late fees and rationalised the interest rates as well – Rajat Mohan, AMRG & Associates.
GST council did not discuss rate cuts today. FM Sitharaman highlighted that the GST collections were 45 per cent of the normal level in the last two months.
GST council postponed the decision on inverted duty structure, however, the FM said that the council is looking at inverted duty structure, especially in textile, footwear and fertilisers.
GST council to mull borrowing to fund compensation. The council also discussed inverted duty correction, especially in the textile sector.
Taxpayers who could not get cancelled GST registrations restored in time are being given an opportunity to apply for revocation of cancellation of registration up to September 30, 2020.
Finance Minister Nirmala Sitharaman today announced major relief for small taxpayers with an aggregate turnover of less than Rs 5 crore. Nirmala Sitharaman cut the interest rate on late submission of returns for the month of February, March, and April from 18 per cent to 9 per cent.
FM Sitharaman announced that there will be no late fee for filing GSTR 3B returns with no liability and pending from July 2017 to January 2020. However, for those with liabilities, the maximum late fee has been capped to Rs 500.
The government announced relief for small taxpayers and also said that there will be no late fee for GSTR 3B return, which has no liability. For the returns with liability, the maximum late fee has been capped to Rs 500.
After increasing excise duty on petrol by Rs 10 per litre and diesel by Rs 13 per litre, the government is collecting around 270 per cent taxes on the base price of petrol and 256 per cent in the case of diesel, said a report by Care Ratings.
The Central Goods and Services Tax (CGST), Vadodara, officials have arrested a businessman named Dilip Jain for evading Rs 70 Cr of GST/CE by providing other financial services through four unregistered entities under GST. The businessman Dilip Jain was arrested after GST investigations revealed that he hadn’t registered with the GST department and avoided paying taxes on the financial services he offered.
Petrol and diesel prices have risen again for the sixth day in a row making retail fuel costlier by Rs 3 in less than a week. On Friday, petrol was retailing higher by 57 paise per litre and diesel by 59 paise a litre than Thursday levels. This is the sixth day in a row that oil prices went up as oil firms ended an 82-day break of rate revision after lockdown and they continue to adjust retail rates. Read full story here
In a partial relief to flyers seeking full funds from airlines for their cancelled tickets during the lockdown from March 25 to June 1, aimed at containing the spread of Coronavirus in the country, the Supreme Court on Friday suggested airlines to allow flyers use their credit shell, issued for their cancelled air tickets, for a period of two years. Read full story here
With all the other challenges the country is facing, it makes you wonder if we should be worrying about an existential crisis for the ‘Parota.’ In any case, given Indian jugaad skills, I’m pretty sure there will be a new breed of ‘Parotis’ that will challenge any categorisation, Mahindra & Mahindra group chairman Anand Mahindra tweeted.
The proposed coal auctions have terms and conditions which are very liberal allowing new companies to participate in the bidding process, reduced upfront amount, adjustment of upfront amount against royalty, liberal efficiency parameters to encourage flexibility to operationalize the coal mines, transparent bidding process, 100% FDI through automatic route allowed and reasonable financial terms and revenue sharing model based on National Coal Index. The successful bidders also will have flexibility in coal production unlike past and have provision for incentives for early production and coal gasification, said the government.
Modi government will launch auction of coal mines for commercial mining with the theme “UNLEASHING COAL: NEW HOPES FOR ATMANIRBHAR BHARAT” on June 18, 2020. It will be a historic day when the Indian coal sector will break free from the shackles of restrictions to charter new growth, the government said.