GST Council Takes Steps for Facilitation of Trade
The GST Council’s 53rd Meeting was held in New Delhi on June 22, 2024. The Finance Minister chaired this meeting along with the other state finance ministers. In this meeting, various proposed changes are considered by the Nirmala Sitharaman (Finance minister).
From the Changes of waiver of interest and penalty on demand notices to the launching of a new GST return Form GSTR 1A, this council meeting is full of new amendments.
For the Facilitation of Trade, a few measures taken by the GST Council are given below:
Section 128A in the CGST Act inserted to provide a Conditional Waiver of Interest or Penalty for the Demands raised under Section 73
During the initial years of GST implementation, the taxpayers faced difficulties, after considering that the GST Council recommended waiving interest and penalties for demand notices that were issued under Section 73 of the CGST Act for the financial years 2017-18, 2018-19 and 2019-20 or in the cases where the full amount of tax demanded paid by the taxpayers in the notice upto 31.03.2025. The demand for erroneous refunds doesn’t covered by this wavier. For the implementation of this waiver, the council advised the insertion of Section 128A in the CGST Act of 2017.
TCS rates for E-commerce Operators reduced
Under Section 52(1) of the CGST Act, the E-Commerce Operators (ECOs) on net taxable suppliers are required to collect Tax Collected at Source (TCS). A reduction in the rate of TCS from the current 1% to 0.5% has been recommended by the GST Council. This TCS reduction will help in easing the supplier’s financial burden for making supplies through ECOs.
Providing Relaxation in the Condition of CGST Act’s Section 16(4)
a) In respect of the initial 4 years of GST implementation, i.e., financial years 2017-18, 2018-19, 2019-20 and 2020-21:
The time limit may deemed to be 30.11.2021 for availing input tax credit (ITC) in GST Return Form-3B, in respect of any invoice or debit note under CGST Act’s Section 16(4) via any form filed upto 30.11.2021 for the FY (financial years) 2017-18, 2018-19, 2019-20 and 2020-21, recommended by the GST Council.
Requisite Amendment in section 16(4) of CGST Act has been recommended by the Council retrospectively w.e.f 01.07.2017 for the same.
b) In respect of cases where after revocation, returns have been filed
Retrospective amendment in Section 16(4) of the CGST Act has been recommended by the GST Council to relax the CGST Act’s Section 16(4) provisions in cases where returns for the period from the date of cancellation of GST registration/ effective date of cancellation of registration till revocation of registration’s cancellation date are filed by the registered person within 30 days of the order of revocation.
Section 11A in the CGST Act inserted for granting power not to recover duties not levied or short-levied
To give powers to the Government, a new Section 11A in the CGST Act was inserted as per the recommendation of the GST Council to allow regularization of non-levy or short levy of GST in cases where tax was being paid short or not paid due to common trade practices.
Clarification provided on the applicability of provisions of Section 16 (4) of CGST Act 2017 under the Reverse Charge Mechanism
The Council clarified that the relevant financial year for calculation of time period for ITC (input tax credit) availed under the provisions of section 16(4) of CGST Act is the financial year in which the invoice has been issued by the recipient, this is for the cases where supplies received from unregistered suppliers and tax has to be paid by the recipient under RCM (reverse charge mechanism) and the recipient is the only person who issued the invoices.
Launching of New GST Return Form
The GST Council has decided to launch a New Form GSTR-1A to amend the details in FORM GSTR-1. This new optional facility is to ease and support the filing of GSTR-1. This form will help taxpayers to amend or add records in return within the same month or period after Filing GSTR-1 and before GSTR-3B Filing, which means this will facilitate taxpayers to add any data of supply of the present tax period missed out in reporting in FORM GSTR-1 of that tax period or to amend already declared data in FORM GSTR-1. This amendment ensures that correct liability will be automatically populated in GSTR-3B.
Annual Return Filing Exempted
Filing of annual returns in FORM GSTR-9/9A for the FY 2023-24 shall be exempted as per the council recommendation. The exemption is for taxpayers having an aggregate annual turnover of upto Rs.2 crore.
