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39th GST Council meet on ’ Know your Supplier’ ; GST on mobile phones hiked to 18%

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On 14 March 2020, several decisions have been taken regarding the GST mechanism on particular sections during the 39th GST Council meet in New Delhi headed by Union Finance & Corporate Affairs Minister Nirmala Sitharaman. Union Minister of State (MoS) for Finance & Corporate Affairs Shri Anurag Thakur also attended the meet. One of the decisions includes calculation of delayed GST payment on the net tax liabilityw.e.f. 1st July 2017, the day the GST came into force.Net cash tax liability is arrived at after deducting the input tax credits available from gross tax liability. Following are the other changes approved during the meet:39th Goods and Services Tax Council meeting Changes in the GST rates; w.e.f April 1, 2020

  • GST on mobile phones and specified parts were increased to 18% from 12%.
  • GST on Maintenance, Repair and Overhaul (MRO) service in respect to aircraft was reduced to 5%from 18% with full ITC (Input Tax Credit).
  • GST on all types of matchsticks has been rationalised to a single GST rate of 12%. Till now, the handmade ones were taxed at 5% and the rest was taxed at 18%.
  • All rate related changes will come into effect on 1 April.

‘Know your Supplier’ (KYS) scheme introduced
GST council has introduced KYShas been so that the taxpayers get the basic details of the suppliers and also able to identify the compliance of the supplier.

New GSTR to be implemented from Oct 1, 2020
The implementation of new GST return (GSTR) system and e-invoicing with QR code has been postponed to 1st October 2020 while the present return system (GSTR-1, GSTR-2A & GSTR-3B) will be continued until September 2020.

Waiver and Extensions; no late fee for GSTR-9 for FY17-18 and FY18-19
The GSTR-9 & 9C deadline is extended to 30 June 2020 for FY 2018-19. Also, the turnover limit will be increased from Rs 2 crore to Rs 5 crore for mandatory annual return filing. Hence, filing GSTR-9C is optional for the taxpayers having the turnover less than Rs 5 crore. Also, the taxpayers with an aggregate annual turnover of less than Rs 2 crore in FY 2017-18 and FY 2018-19 will not pay any late fee for delayed filing of GSTR-9.

Other key decisions:

-Infosys Chairman, MrNandanNilekaniwill present progress updates about the GST IT systems at the next three GST Council meetings which will be ensured by Infosys by July 2020

-The time limit for finalisation of the e-Wallet scheme for consumers is extended till 31st March 2021.

-A special GST procedure was prescribed during the CIRP period for the GST registered corporates who are undergoing insolvency/resolution procedure under IBC Code, 2016.

-A transition plan is laid down till 31st May 2020 for the taxpayers belonging to Dadra and Nagar Haveli & Daman and Diu, due to the merger in January 2020.

Point to be noted: Goods and Services Tax collections in February 2020 were at 1,05,366 crore.