Major Points to be underlined from 43rd GST Council Meeting Held on 28.05.2021

Major Points to be underlined from 43^rd GST Council Meeting Held on 28.05.2021

The 43^rd Council Meeting of GST was held on the date of 28^th May 2021. And this was conducted under the chairmanship of Union Finance &Corporate Affairs Minister Smt. Nirmala Sitharaman through online conferencing (video) in New Delhi. This virtual meeting was attended by Union minister of State (MoS) for finance Mr. Anurag Thakur and also the FM’s or the finance ministers of states and Union territories (UTs).

Highlights of 43^rd GST Council Meeting

1. In the case of a landowner promoter, who is to pay GST on the apartment to the developer promoter, can avail GST council which was charged on them by the developer promoter in respect of the apartments provided for development when they are subsequently sold by such landowner promoter. The developer promoter of these flats would be allowed to pay GST on such flats,on any time before or at the time of issuance of the completion certificate, such that the landowner promoter can avail the ITC pertaining to the same.
2. Extension of Exemption of the items from payment of GST up to 31^st of August 2021:

3. On parts of sprinklers or drip irrigation systems falling under tariff heading 8424 (nozzle/laterals) even if these 2 goods are sold separately, shall be taxed at the rate of 12%.
4. Services that are provided to the educational institutions, which would also include aanganwadi’s that provide pre-school education, by way of serving food including the mid-day meals under the mid-day meal schemes, that is sponsored by Government shall be exempt from purview of GST.
5. Services that are provided by way of examination including the entrance examination, where the fee would be charged for such examinations provided either by the NBE (National Board of Examination) or such other similar Central or State Education Boards and also the input services that are provided in relation thereto shall be exempt from the purview of GST.
6. The rate of GST charged on MRO Services in respect of Ships or Vessels shall be reduced to 5% from the rate of 18%. and taking the case of B2B (Business to Business valuation) Transactions, Place of Supply of Services would be the location of the recipient of service.
7. Services which are provided by way of milling of wheat or paddy into flour (which is fortified with minerals by millers or otherwise) or rice to such entities like the government or local authority etc., for being distributed under PDS, shall be exempt from GST if the value of  goods under composite supply does not exceed 25%. Else, it is to be noted that such services shall attract GST at the rate of 5%, if supplied to a registered person, including a person who has been registered under GST for the payment of GST.
8. On the annuity payments GST shall be applicable and payable, which are received as deferred payment for the construction of the road. The credit of annuities which are paid for services by way of access to a road or a bridgeshall be made available as a benefit.
9. Services that are supplied to a Government Entity by way of construction of a ropeway would attract a GST of 18%.
10. Services supplied by Govt. to its undertaking or PSU (Public Sector Undertakings) by way of guaranteeing the loans which was taken by such entity from banks and financial institutions would be exempt from GST.

Trade Facilitation Measures

1. The scheme of Amnesty has been recommended for reducing the late fee that is payable by the small taxpayers and also the medium-sized taxpayers, which is expected to be beneficial for at least 89% of the taxpayers under the GST Act.

This scheme provides that, if the pending GST returns are filed by the taxpayer between 01.06.2021 to 31.08.2021, then the late fee payable per return shall be as follows:
– In case of nil or no tax liability, maximum of INR 500;
– In the case of other taxpayers, maximum of INR 1,000.

2. Rationalization of Late fees for Small Taxpayers to be applicable to future liabilities. Taxpayers would now be able to file their pending GST returns and avail the benefits of this Amnesty scheme with reduced late fees. The rationalization of late fees with respect to tax liability or turnover of taxpayers would be as follows in the case of other taxpayers pertaining to the annual aggregate turnover earned by them:

– Annual Aggregate Turnover is up to INR 1.5 Crores, maximum of INR 2000;
– Annual Aggregate Turnover is between INR 1.5 Crores to 5 Crores, maximum of INR 5,000;
– Annual Aggregate Turnover above INR 5 Crores, maximum of INR 10,000.
It is to be noted that this shall be applicable with respect to the filing of GSTR 3B and GSTR 1.

3. In the case of GSTR -4 which is filed by composition taxpayers, the following late fee shall be made applicable:

– Nil Tax Liability, maximum of INR 500;
– Others, maximum of INR 2,000.

4. Filing of GSTR – 7, filed by e-commerce operators, INR 50 per day should be paid to a maximum of INR 2,000.
5. In the case of small taxpayers whose turnover is less than INR 2 Crores, the Annual Return filing for the FY 2020-21 will continue to be optional. While the reconciliation statements for the year of 2020-21 will be furnished or filed only by those taxpayers whose turnover is equal to INR 5 crores or more.
6. A special session which will be dedicated to the collection of compensation cess beyond July 2022 will be convened by the GST Authorities and an amount of INR 1.58 lakh crore will be borrowed by the Centre to meet states’ compensation demand.
7. Group of ministers to be formed quickly so as to examine the need for further reductions & decide on any new rates in exemptions. They will submit the report on the reduction of rates on COVID-related items by the 8^th of June 2021, which would then be discussed in the next GST Council Meeting.