40TH GST COUNCIL MEETING UPDATES

The 40^th GST Council meeting was chaired by Finance Minister. The Goods and Services Tax Council on Friday decided to ease compliance burden of businesses by providing relief on late fees and interest payable on late payments.

Following relaxation was recommended in GST Council Meeting for filing of GST Returns:

1)        For all those who have no tax liability but have not filed GST returns for tax period July,2017- January, 2020 (prior to COVID-19),  there will be no late fee at all.

2)        For all those registered persons who have tax liability, but have not filed GST returns, then the maximum late fee for non-filing of GSTR-3B returns for the period July, 2017- January, 2020 has been capped to Rs 500/-

3)        Small taxpayers provided relief by the waiver of late fees and interest if the returns in form GSTR-3B, for the supplies effected in May, June, and July, are furnished by September,2020.

4)        For small taxpayers (aggregate turnover up to Rs 5 crore), the rate of interest for late furnishing of returns beyond specified dates (staggered up to 6^th July, 2020) reduced to 9 percent per annum from 18 percent till 30^th September ,2020.

5)        Taxpayers, who could not get their cancelled GST registrations restored in time, can file an application for revocation of cancellation of registration up to 30^th September, 2020. This applies to all cases where registrations have been cancelled till 12^th June, 2020.

PRESS RELEASE ON GST RATES ON CERTAIN GOODS AND SERVICES IN 39THGST COUNCIL MEETING ON 14TH MARCH, 2020

GST Council in the 39th meeting held on 14th March, 2020 at New Delhi tookfollowing decisions relating to changes in GST rates on supply of goods and services.
1. The recommendation of the Fitment Committee for calibrating the GST rate structure to correct the inverted duty structure on various items like Mobile phones, Footwear, Textiles and Fertilizers was placed before the GST Council for discussion. The Council had a detailed discussion on the matter. Upon discussion the Council made the followingrecommendations:-i. To raise the GST rate on Mobile Phones and specified parts presently attracting 12% to 18%.ii. To deliberate the issue of calibrating the rate in other items for removing inversion in future meetings with further consultation and examination of issue.
2. GST rate on all types of matches (Handmade and other than Handmade) has been rationalised to 12% (from 5% on Handmade matches and 18% on other matches). This would address the classification issues. This issue was deliberated earlier in the 37th meeting and was pending for decision.
3 To reduce GST rate on Maintenance, Repair and Overhaul (MRO) services in respect of aircraft from 18% to 5% with full ITC and to change the place of supply for B2B MRO services to the location of recipient. This change is likely to assist in setting up of MRO services in India. Domestic MRO will also get protection due to 5% tax paid under section 3(7) of the Customs Tariff Act, 1975 on most imported goods (sent abroad for repairs) as this tax is not available as credit.
Note: It is proposed to issue notifications giving effect to these recommendations of the Council on 01st April, 2020.
[This note presents the decision of the GST Council in simple language for easyunderstanding which would be given effect to through Gazette notifications/ circulars whichshall have force of law.]*****


39th Meeting of the GST Council, New Delhi14 March, 2020***
PRESS RELEASE(Law and Procedure related changes)

The GST Council, in its 39th meeting held on 14.03.2020, has made the followingrecommendations:1. Measures for Trade facilitation:a. Interest for delay in payment of GST to be charged on the net cash tax liabilityw.e.f. 01.07.2017 (Law to be amended retrospectively).b. Where registrations have been cancelled till 14.03.2020, application forrevocation of cancellation of registration can be filled up to 30.06.2020(extension of period of application as one-time measure to facilitate those whowant to conduct business).c. Annual Return:i. Relaxation to MSMEs from furnishing of Reconciliation Statement inFORM GSTR-9C, for the financial year 2018-19, for taxpayershaving aggregate turnover below Rs. 5 crores;ii. Due date for filing the Annual return and the Reconciliation Statementfor financial year 2018-19 to be extended to 30.06.2020; andiii. Late fees not to be levied for delayed filing of the Annual return andthe Reconciliation Statement for financial year 2017-18 and 2018-19for taxpayers with aggregate turnover less than Rs. 2 crores.d. A new facility called ‘Know Your Supplier000040000 to be introduced so as to enableevery registered person to have some basic information about the supplierswith whom they conduct or propose to conduct business.e. The requirement of furnishing FORM GSTR-1 for 2019-20 to be waived fortaxpayers who could not opt for availing the option of special compositionscheme under notification No. 2/2019-Central Tax (Rate) dated 07.03.2019 byfiling FORM CMP-02.f. A special procedure is being prescribed for registered persons who arecorporate debtors under the provisions of the Insolvency and BankruptcyCode, 2016 and are undergoing the corporate insolvency resolution process, soas to enable them to comply with the provisions of GST Laws during the CIRPperiod.g. A special procedure for registered persons in Dadra and Nagar Haveli &Daman and Diu during transition period, consequent to merger of the UTsw.e.f. 26.01.2020; transition to be completed by 31.05.2020.h. Extension of due dates for FORM GSTR-3B for the month of July, 2019 toJanuary, 2020 till 24th March, 2020 for registered persons having principalplace of business in the Union territory of Ladakh. Similar extension is alsorecommended for FORM GSTR-1 & FORM GSTR-7.i. Bunching of refund claims allowed across financial years to facilitateexporters.2. Deferment of E-invoice and QR Code:a. Certain class of registered persons (insurance company, banking company,financial institution, non-banking financial institution, GTA, passengertransportation service etc.) to be exempted from issuing e-invoices orcapturing dynamic QR code; andb. The dates for implementation of e-invoicing and QR Code to be extended to01.10.2020.3. Deferment of e-wallet Scheme:a. Extension of the time to finalize e-Wallet scheme up to 31.03.2021; andb. Extension of the present exemptions from IGST and Cess on the importsmade under the AA/EPCG/EOU schemes up to 31.03.2021.4. Continuation of existing system of furnishing FORM GSTR-1 & FORM GSTR-3Btill September, 2020;5. Other new initiatives:a. Seeking information return from Banks;b. To curb fake invoicing and fraudulent passing of ITC, restrictions to beimposed on passing of the ITC in case of new GST registrations, beforephysical verification of premises and Financial KYC of the registered person.6. Issuance of circulars in respect of:a. Clarification in apportionment of ITC in cases of business reorganizationunder section 18 (3) of CGST Act read with rule 41(1) of CGST Rules;
b. Appeals during non-constitution of the Appellate Tribunal;c. Clarification on refund related issues; andd. Clarification on special procedure for registered persons who are corporatedebtors under the provisions of the Insolvency and Bankruptcy Code, 2016,undergoing the corporate insolvency resolution process.
7. Amendments to the CGST Rules: Key amendments are as below:a. Procedure for reversal of input tax credit in respect of capital goods partlyused for affecting taxable supplies and partly for exempt supplies under rule43 (1) (c);b. ceiling to be fixed for the value of the export supply for the purpose ofcalculation of refund on zero rated supplies;c. to allow for refund to be sanctioned in both cash and credit in case of excesspayment of tax;d. to provide for recovery of refund on export of goods where export proceedsare not realized within the time prescribed under FEMA; ande. to operationalize Aadhaar authentication for new taxpayers.
8. Certain amendments to be carried out in the GST laws.*****Note: The recommendations of the GST Council have been presented in this release insimple language for information of all stakeholders. The same would be given effectthrough relevant Circulars/Notifications or amendment in GST laws which alone shallhave the force of law.

PRESS RELEASE

In the 39th meeting of the GST Council, held on 14.03.2020, Shri Nandan Nilekani, on behalf of Infosys, made a presentation addressing the system related issues that are being faced by the taxpayers in the GST system. He first gave the summary of the recently observed IT issues and the way forward to resolve them.

2. He suggested that in order to smoothen the rollout of the new return system, and to ensure a better uptake of the new return, the transition to the new return system may be made in an incremental manner. He suggested that the process may be initiated by addressing the compliance related issues first so that the problem of tax evasion and gaming of the system due to non-linking of FORM GSTR-1 and FORM GSTR-3B is addressed immediately. Thejourney could start with linking of the details of the statement of outward supplies in FORM GSTR-1 to the liability in FORM GSTR-3B. This would be followed by the linking of the input tax credit in FORM GSTR-3B to the details of the supplies reflected in the FORM GSTR-2A. In order to tackle evasion and preventing the gaming of the system, implementation of Aadhaar authentication and spike rules would also be initiated.
3. He informed the Council that to augment the capacity of the IT system to concurrently handle 3 lakh taxpayers from the present level of 1.5 lakh taxpayers, hardware procurement process has been initiated which is slightly impacted by the Covid-19 pandemic.
4. The GST Council further made the following suggestions after due discussions-(a) Shri Nandan Nilekani would attend the next 3 meetings of the GST Council and update the council of the status of implementation of the decisions taken by the Council and assist the Council in taking appropriate decisions on technology related issues,(b) To support the timely implementation of various initiatives, the Council gave a go ahead for deployment of additional manpower (60 in number) on T&M basis and assured that both on procurement of additional hardware and hiring of manpower, expeditious approvals would be given however the return filing experience of the taxpayers and removal of technical glitches needs to be carried out urgently.
5. Shri Nandan Nilekani assured that he would personally monitor the progress of the GSTN project and also agreed to attend the IT-GoM for the next 6 months or till such time the initiatives are implemented. The GST Council expects these initiatives to be implemented by the 31st of July, 2020.
***** 

Decisions taken at 37^th GST Council meet at Goa on 20.09.2019

(with specific reference to Hotel)

GST Council in the 37^th meeting held on 20th September, 2019 (Friday) at Goa inter-alia, decided to lower GST rates on hotel tariffs , outdoor catering and other miscellaneous items.

(A) GST Rates on hotel room tariffs

A comparative analysis of the rates earlier and rates proposed is as follows:

(B) GST Rate on outdoor catering

(C) GST Rate on caffeinated drinks (including energy drinks)

• Increased to 28 per cent from 18 per cent.
• Additional 12 per cent compensation cess would also be imposed on such beverages.

(D) GST rate reduction on other items

(E) Other Miscellaneous changes

• Exemption to Fishmeal for the period 01.07.17 to 30.09.19. There were doubts as regards taxability of fishmeal in view of the interpretational issues. However, any tax collected for this period shall be required to be deposited.
• Mere heating of leguminous vegetables (gram/lentil) for removing moisture, or to soften and puff it or removing the skin, and not subjecting to any other processing or addition of any other ingredients (salt, oil etc.) would be classified under HSN Code 0713.
• Almond milk is classifiable under HSN code 22029990 and attracts GST rate of 18%.

(F) New return forms

 It is proposed to defer the implementation of new return system from April, 2020.

(Note: The GST rate changes shall be made effective with effect from 1^st October, 2019 after being notified)

Note on 38^th GST Council Meeting

(Law and Procedure related changes)

The 38th GST Council meeting was held on 18^th of December, 2019 in New Delhi.

The GST Council recommended the following:

  1. Due date extension of GSTR-9 and GSTR-9C

Due date for annual return in Form GSTR-9 and reconciliation statement in Form GSTR-9C for FY 2017-18 to be extended from 31-12-2019 to 31.01.2020.

  2. Waiver of late fee of pending GSTR-1

Late fee in respect of all pending GSTR-1 for the period July, 2017 to November, 2019, to be waived off, if the same are filed by 10.01.2020.

  3. Blocking of e-way bill on non-furnishing of GSTR-1

Apart from blocking of e-way bill facility for non-filing of GSTR-3B for the last two successive months which became operational from November, 2019, the e-way bill shall also be blocked on account of non-filing of GSTR-1 for two tax periods.

  4. ITC restriction of invoices not reflected in GSTR-2A reduced to 10%

Restriction of input tax credit to the recipient for invoices or debit notes that are not reflected in his Form GSTR-2A reduced to 10% from earlier 20% imposed vide Rule 36(4), of the eligible credit available in respect of invoices or debit notes reflected in its Form GSTR-2A.

  5. Constitution of Grievance Redressal Committee at Zonal/State level

To address grievances of specific or general nature of taxpayers, Grievance Redressal Committees (GRC) will be constituted at the Zonal/ State level with both CGST and SGST officers including representatives of trade and industry and other GST stakeholders.

  6. Fraudulently availed ITC to be blocked

Appropriate action to be taken to block fraudulently availed input tax credit in certain situations to control fake invoice generation.

  7. Extension of GST return for North Eastern States

Due date of filing GST returns for the month of November, 2019 to be extended in respect of a few North Eastern States.

  8. Exemption from upfront amount for long term lease to entity with 20% or ownership of Central/State government

Upfront amount payable for long term lease of industrial/ financial infrastructure plots by an entity having 20% or more ownership of Central or State Government to be exempted from GST w.e.f. 01.01.2020.

  9. Single GST rate of 28% on lottery

To levy a single rate of GST @ 28% on both State run and State authorized lottery w.e.f. 1st March, 2020.

10. Bags & sacks (woven/non-woven) made of polythylene or polypropylene strips to be taxed at 18% GST

Woven and non-woven bags and sacks of polyethylene or polypropylene strips or the like, laminated or not, classified under HSN code 3923 or 6305 to be chargeable at the rate of 18% GST from 12% GST rate with effect from 1-1-2020.

11. Standard Operating Procedures to be issued

A Standard Operating Procedure for tax officers would be issued in respect of action to be taken in cases of non-filing of FORM GSTR 3B returns.

Recommendations of 36^th GST Council meeting

The 36th GST Council Meeting was held here today i.e. 27.07.2019, via Video Conference, key decisions of the same are:

A.   GST rate related changes on supply of goods and services

                 (i)      The GST rate on all electric vehicles be reduced from 12% to 5%.

                (ii)      The GST rate on charger or charging stations for Electric vehicles be reduced from 18% to 5%.

              (iii)      Hiring of electric buses (of carrying capacity of more than 12 passengers) by local authorities be exempted from GST.

(These changes shall become effective from 1^st August, 2019.)

B.   Changes in GST law:

                         (i)         Last date for filing of intimation, in FORM GST CMP-02, for availing the option of payment of tax under notification No. 2/2019-Central Tax (Rate) dated 07.03.2019 (by exclusive supplier of services), to be extended from 31.07.2019 to 30.09.2019.

                      (ii)         The last date for furnishing statement containing the details of the self-assessed tax in FORM GST CMP-08 for the quarter April, 2019 to June, 2019 (by taxpayers under composition scheme), to be extended from 31.07.2019 to 31.08.2019.

UNION BUDGET 2019-20

What does it offer?

© Agarwal Sanjiv & Company

Chartered Accountants, Jaipur

The Union Budget for the year 2019-20, as laid in the Parliament today (i.e., 5^th July, 2019) is the first Budget of the new Union Government and so for the Union Finance Minister, a woman. While the Budget promises a host of plans, welfare schemes and developmental activities, here is a snap shot of the of the Indian economy and Budget offerings in terms of direct and indirect taxation and directions for the economy in the backdrop of economic slowdown.

A.    Economic Highlights and Select Proposals

• Economic survey suggest economic growth with macro-economic stability
• India is now the 6th largest economy in the world, compared to 11th largest economy in 2014.
• Indian economy is globally the 3rd largest in Purchasing Power Parity (PPP) terms
• Indian economy to become a 3 trillion dollar economy in the current year, aspiring to be a 5 trillion dollar economy
• Fiscal deficit in FY19 at 3.3% of the GDP
• Building Team India with Jan Bhagidari: Minimum Government Maximum Governance.
• Common man000040000s life changed through MUDRA loans for ease of doing business.
• Various measures related to MSMEs announced like Pradhan Mantri Karam Yogi Maandhan Scheme, Interest Subvention Scheme for MSMEs, Payment platform for MSMEs
• Measures to make India a more attractive FDI destination.
• GDP predicted @7% for financial year 2019-20
• Focus on private investment and infrastructure
• Industrial production and service sector growth not encouraging
• Labour laws reforms to be prioritized
• Life expectancy increases and ought to be addressed
• Starts up econ system to be liberalized to encourage entrepreneurship

B.     Direct Taxes Highlights and Select Proposals

• Direct tax revenue increased by over 78% in past 5 years to Rs. 11.37 lakh crore
• Tax rate reduced to 25% for companies with annual turnover up to Rs. 400 crores (earlier Rs. 250 crores).
• Surchage increased for individuals having income from Rs. 2 crores to Rs. 5 crores
• TDS of 2% on aggregate cash withdrawals exceeding Rs. 1 crore in a year from a bank account
• Business establishments with annual turnover more than Rs. 50 crore shall have to offer low cost digital modes of payment to their customers and no charges or Merchant Discount Rate shall be imposed on customers as well as merchants.

• Tax Simplification and Ease of living

Ø  Interchangeability of PAN and Aadhaar: Return can be file using Adhaar instead of PAN and also Aadhaar can be used wherever PAN is required.

Ø  Pre-filling of Income-tax Returns for faster, more accurate tax returns

Ø  Faceless e-assessment with no human interface to be launched

• Additional deduction up to Rs. 1.5 lakhs for interest paid on loans borrowed up to 31st March, 2020 for purchase of house valued up to Rs. 45 lakh.

• E-Vehicles

Ø  Additional income tax deduction of Rs. 1.5 lakh on interest paid on electric vehicle loans.

Ø  Customs duty exempted on certain parts of electric vehicles.

Ø  GST rate proposed to be reduced from 12% to 5%

• Start-ups

Ø  Capital gains exemptions from sale of residential house for investment in start-ups extended till FY21.

Ø  Funds raised by start-ups to not require scrutiny from Income Tax Department

• STT restricted only to the difference between settlement and strike price in case of exercise of options

C.    Indirect Taxes Highlights and Select Proposals

a)  Customs , Service Tax and Central Excise

• Import duty on gold & precious metals increased to 12.5% from 10%.
• Import of Defence equipment not manufactured in India exempt from Customs Duty
• 5% Basic Custom Duty imposed on imported books.
• Customs duty reduced on certain raw materials, like Inputs for artificial kidney, Capital goods required for manufacture of specified electronic goods, etc
• Increase in Special Additional Excise Duty and Road and Infrastructure Cess each by Rs. 1 per litre on petrol and diesel
• Legacy Dispute Resolution Scheme, 2019 for quick closure of pending litigations in Central Excise and Service tax from pre-GST regime
• Service Tax (provisions shall apply retrospectively):

Ø  No service tax shall be levied or collected in respect of taxable service provided or agreed to be provided by the State Government by way of grant of liquor licence, against consideration in the form of licence fee or application fee, by whatever name called, during the period commencing from the 01.04.2016 to 30.06.2017.

Ø  Refund of tax already collected but which would not have been so collected shall be given and application for the claim of such refund shall be made within a period of 6 months from the date on which the Finance (No.2) Bill, 2019 receives the assent of the President.

Ø  Special provision for retrospective exemption from service tax in certain cases relating to services provided by Indian Institutes of Management to students  for period 1st July, 2003 to 31st March, 2016.

Ø  Special provision for retrospective exemption from service tax in certain cases relating to long term lease of plots for development of infrastructure for financial business for 1st October, 2013 to 30th June, 2017

D.    Goods and Service Tax (GST)

• Acknowledges GST as a monumental tax reform in country
• Praises cooperative federalism and efforts of GST Council
• Admits teething problems in GST implementation, but considers it to be natural, looking to the scale of reform.
• Stress on further simplification of GST processes, including simplified single return and e-invoice system.

GST revised collection for financial year 2018-2019             Rs.  643900 crores

Budget estimate for GST collection for financial                   Rs. 663343 crores

year 2019-2020

• Changes in GST law

Changes proposed in CGST / IGST / UGST tax laws:

Ø  CGST

Ø  IGST

Ø  UGST

Amendment in  CGST Law

(For any clarifications, mail us at asandco@gmail.com )

Recommendation of GST Council Meeting held on 21.06.2019 at New Delhi

A. Relating to returns

a)    New return system

A new return system to be introduced in a phased manner, as described below:

                                     i.        Form GST ANX-1 & ANX -2 shall be available on trial basis, during period from July, 2019 to September, 2019. But Form GSTR-1 and GSTR-3B shall also be filed during the said period.

                                   ii.        From October, 2019 onwards Form GST ANX-1 is to be made compulsory, where

• Large taxpayers (aggregate turnover of previous year is more than 5 crores) shall be required to file GST ANX-1 on monthly basis.
• Small taxpayers to file first GST ANX-1 for quarter October, 2019 to December, 2019 in January, 2020.

                                  iii.        Large taxpayers shall be required to file

• Form GSTR-3B & GSTR-1 for October & November, 2019
• First Form GST RET-01 for December, 2019 in January, 2020
• Form ANX-2 may be viewed from October, 2019 onwards but no action shall be allowed on such Form.

                                  iv.        Small taxpayers shall

• stop filing GSTR-3B & start filing Form GST PMT-08, from October, 2019.
• File their first Form GST RET-01 for quarter October 2019 to December,2019 in January, 2020.

From January, 2020 onwards FORM GSTR-3B to be completely phased out

b)    Extension in dates

Due date filing few returns and form have been extended as follows:

B. Relating to E-way Bill

Rule 138E of the CGST rules, pertaining to blocking of e-way bills on non-filing of returns for two consecutive tax periods, to be brought into effect from 21.08.2019, instead of the earlier notified date of 21.06.2019.

(Notification No. 25/2019-Central Tax dated 21.06.2019)

C. Relating to Rates

The Council has recommended following GST rate related changes on supply of goods and services:

                    a)        Electric Vehicles

Fitment committee shall examine the issues relating to GST concessions on electric vehicle, charger and hiring of electric vehicle and shall be brought before the Council in the next meeting.

                    b)        Solar Power Generating Systems and Wind Turbines

Fitment committee shall examine the issue related to valuation of goods and services in a solar power generating system and wind turbine and shall be brought before the Council in the next meeting.

                     c)        Lottery

After deliberations on the various issues on rate of lottery, the Council recommended that certain issues relating to taxation (rates and destination principle) would require legal opinion of Learned Attorney General.

D. Other important decisions

• Decision regarding location of the State and the Area Benches for the Goods and Services Tax Appellate Tribunal (GSTAT) for various States and the Union Territories with legislature has been taken by Council and decided to have a common State Bench for the States of Sikkim, Nagaland, Manipur and Arunachal Pradesh.
• The tenure of National Anti-Profiteering Authority has been extended by 2 years.
• It has also been decided to introduce electronic invoicing system in a phase-wise manner for B2B transactions. The Phase 1 is proposed to be voluntary and it shall be rolled-out from January 2020.

Decisions taken by the GST Council in the 34th meeting held on 19^th March, 2019

Ø  Option for under construction projects

ü Under Construction projects as on 31st March, 2019 shall have an option to choose old rates (effective rate of 8% or 12% with ITC) with input tax credit or new rates without input tax credit.

ü If the option is not exercised within the prescribed time limit then new rates shall apply.

Ø  Conditions for the new tax rates:

ü Atleast 80% of the material to be procured from registered dealers. Further, on shortfall of purchases from 80%, tax shall be paid by the builder @ 18% on RCM basis. However, Tax on cement purchased from unregistered person shall be paid @ 28% under RCM, and on capital goods under RCM at applicable rates.

ü Input tax credit shall not be available.

Ø  Applicability of new tax rates:

                The new tax rates which shall be applicable as follows:

ü 1% without input tax credit (ITC) on construction of affordable houses shall be available for:

• Houses having area of 60 sqm in non- metros / 90 sqm in metros and value upto RS. 45 lakhs
• Under construction affordable houses presently eligible for concessional rate of 8% GST (after 1/3^rd land abatement)

ü 5% without input tax credit shall be applicable on construction of:

• Under construction houses other than affordable houses presently booked prior to or after 01.04.2019. For houses booked prior to 01.04.2019, new rate shall be available on instalments payable on or after 01.04.2019.
• Commercial apartments having carpet area of not more than 15% of total carpet area of all apartments.

Ø  Transition for ongoing projects opting for the new tax rate:

ü Ongoing projects not been completed by 31.03.2019 shall transition the ITC in proportion to booking of the flat and invoicing done for the booked flat is available subject to a few safeguards.

ü For mixed project transition of ITC shall be allowed on pro-rata basis in proportion to carpet area of the commercial portion.

Ø  Treatment of TDR/ FSI and Long term lease for projects commencing after 01.04.2019

Ø  Supply of TDR, FSI, long term lease (premium) of land by a landowner to a developer shall be exempted with the condition constructed flats are sold before issuance of completion certificate and tax is paid on them.

Ø  Exemption can be withdrawn (limited to 1% of value in case of affordable houses and 5% of value in case of other than affordable houses) if flats sold after issue of completion certificate.

Ø  Builder shall be liable to pay tax on TDR, FSI, long term lease (premium) on the date of date of issue of completion certificate.

Recommendations of 33^rd GST Council Meeting

The 33rd GST Council meeting held on 20.02.2019 and adjourned meeting on 24.02.2019 made the following recommendations:

v  Extension in due date of Form GSTR 3B

Ø  The due date of filing of return in Form GSTR 3B for the month of January, 2019 extended upto 22.02.2019.

Ø  However, for registered persons whose principal place of business is in the State of Jammu and Kashmir the last date shall be 28.02.2019.

Ø  Change in rates for Real estate (housing)

Ø  Under construction properties or ready-to-move-in flats where completion certificate has not been issued at the time of sale (other than affordable housing segment): from 12% (with ITC) to 5% (without ITC)

Ø  Affordable housing segment: from 8% (with ITC) to 1% (without ITC)

[Affordable house will mean a residential house/ flat of carpet area of upto 90 sqm in non-metropolitan cities/ towns and 60 sqm in metropolitan cities* having value upto Rs. 45 lacs (both for metropolitan and non-metropolitan cities)].

*Metropolitan Cities are Bengaluru, Chennai, Delhi National Capital Region (NCR) (limited to Delhi, Noida, Greater Noida, Ghaziabad, Gurgaon, Faridabad), Hyderabad, Kolkata and Mumbai (whole of Mumbai Metropolitan Region (MMR)].

Ø  The new rates shall be applicable from 01.04.2019 after notification.

v  GST exemption on TDR/ JDA, long term lease (premium), FSI: 

Ø  Intermediate tax on development right, such as TDR, JDA, lease (premium), FSI shall be exempted only for such residential properties on which GST is payable.

v  Tax rate on lottery

Ø  GST Council decided that the issue of tax rate on lottery needs further discussion in the GoM constituted in this regard.

Major Decisions taken in 32^nd GST Council Meeting held on

10^th January, 2019

The GST Council in its 32^nd Meeting held on 10^th January, 2019 at New Delhi, took the following major decisions:

Ø  Higher exemption threshold limit for registration w.e.f. 01.04.2019

• There would be two threshold limits for exemption from registration and payment of GST for the suppliers of goods i.e. Rs 40 lakhs and Rs 20 lakhs.

• States would have an option to decide about one of the limits within a weeks000040000 time.

• The threshold for registration for service providers would continue to be Rs 20 lakhs and in case of Special Category States at Rs 10 lakhs.

Ø  Major changes in Composition Scheme w.e.f. 01.04.2019

• Increase in turnover limit for the existing Composition Scheme: The limit of Annual Turnover in the preceding financial year for availing composition scheme for goods shall be increased to Rs 1.5 crore. Special category States would decide, within one week, about the Composition Limit in their respective States.

• Composition Scheme for Services: Presently, there was no composition scheme for providers of services and mixed supplies. Now, for such suppliers, a composition scheme shall be made with a tax rate of 6% (3% CGST +3% SGST) having an annual turnover in the preceding financial year up to Rs 50 lakhs. The said scheme shall be applicable to providers of service as well as suppliers of goods and services (mixed suppliers).
• Compliance Simplification: Composition Dealers would need to file only one Annual Return but Payment of Taxes would remain Quarterly (along with a simple declaration).

Ø  Other Decisions:

• Free accounting and billing software shall be provided to small taxpayers by GSTN.

• Levy of cess on intra-state supply of goods and services within the state of Kerala at a rate not exceeding 1% for a period not exceeding 2 years.

• A seven member Group of Ministers (GOM) shall be constituted to examine the proposal of giving a composition scheme to boost the residential segment of the real estate sector and to examine the GST rate structure on lotteries.