The 43rd GST Council on Friday, May 28, 2021, took various key decisions including exemption of duty on import of Covid-19 related items, and an amnesty scheme for small and medium-sized taxpayers to reduce the late fee burden on them.
The meeting was held through video conferencing, and it was chaired by the finance minister Nirmala Sitharaman. The meeting was also attended by the minister of state for finance Anurag Thakur, finance ministers of different states and UTs and senior officers from the Centre and states.
The GST Council meeting held after a gap of nearly seven months.
Here are the highlights of the meeting:
Majors taken for Covid-19 relief
– The GST Council has determined to exempt import duty on Covid-19 relief goods being brought from overseas till August 31, 2021.
– Import of Covid-related relief items, even if purchased or meant for donating to the government or any relief agency upon recommendation of state authority will be exempted from IGST.
– Import of medicine for black fungus (Amphotericin B) has also been covered in a list of items exempted from IGST, because of the increasing cases of the infection.
– Group of ministers to be formed immediately, who will submit a report by June 8, 2021, to examine the need for further reductions & decide on any new rates in exemptions.
Amnesty scheme for small and medium-size taxpayer
– To provide relief to small and medium-sized taxpayers, an amnesty scheme has been recommended for reducing late fee payable by small taxpayers and medium-sized taxpayers.
– Taxpayers can now file their outstanding returns and avail of the benefits of this amnesty scheme with decreased late fees.
– The maximum amount of late fees has also decreased. It will come into force from future tax periods.
Simplification of return filing
– Annual return filing has also been simplified. The Council has recommended amending the CGST Act to allow for self-certification of reconciliation statements, instead of getting them certified by Chartered Accountants.
– Return filing will continue to be optional for the financial year 2020-21 for small taxpayers, having a turnover less than Rs 2 crore while reconciliation statements for the financial year 2020-21 will be furnished only by those taxpayers whose turnover is Rs 5 crore or more.
– The Law Committee will look into concerns involving quarterly return filing and quarterly payment. The central government is yet to work out the modalities for it.
No changes in GST rate
– The GST Council believed that this is not the suitable time for a correction in Inversion duty, so this remains where it is.
– The Centre will use the same GST compensation formula as last year. As per a rough calculation, the central government will need to borrow Rs 1.58 lakh crore and pass it on to the states.