On June 12, 2020, Union Finance & Corporate Affairs Minister Nirmala Sitharaman chaired the virtual 40th GST Council Meeting. The key outcome of this meet was further relief on late fee and interest payable on late payments as a part of compliance burden of businesses. This was the first meeting after COVID-19 breakout in India.
Reduction In/Waiver from the Prior Period Late Fee; 1st July 2017 to 31st Jan 2020
GST late fee reduction for prior periods 1st July 2017 to 31st January 2020 is as follows:
For Individuals
- No late fee for taxpayers with nil tax liability.
- For people who have tax liability, the maximum late fee for non-filing of GSTR-3B returns has been capped to Rs 500 on the condition that they will file their returns between 1st July 2020 and 30th September 2020.
For Companies:
- Companies having no tax liability will not be fined any late fee if they have not filed returns, since July 1, 2017.
- Companies with tax liabilities will now pay a late fee of Rs 500 per month, instead of Rs 10,000 per month.
Small Taxpayers filers: Interest Relief and Late fee waiver for periods February-July 2020
Interest Rate reduced for Feb-April 2020: For small taxpayers whose aggregate turnover is up to Rs 5 crore, the rate of interest for late filing of GST returns for Feb 20 to April 20, beyond 6th July 2020 (as per staggered dates), is being reduced from 18% to 9% p.a, if filing done till September, 30 2020.
- It should be noted that there is no interest charge if tax for these months is paid before 6th July 2020 or date as applicable based on turnover.
Interest Rate waived off for May-July 2020: For the months May, June and July 2020, the late fee and interest will be waived off, if filing is done till September, 30 2020(staggered dates are yet to be announced).
Time limit extended till Sept 30, 2020 for revoking cancellations of GST registration
Period for seeking revocation of cancelled GST registrations allowed till 30th September 2020 for all those registrations which were cancelled till 12th June 2020. Originally, as per GST Act, the time limit was 30 days from the date of issue of the cancellation order.
Compensation Cess to the states; GST collection reduced by 45%
The Centre has released Rs 36,400 crore to states as compensation cess for December 2019 to February 2020 period, still the shortfall remains the issue.
The total outgo to states stands at Rs 1.51 lakh crore for FY 2019-20, with installment of March remaining.
- The impact of COVID-19 trimmed the GST collections by 45%, resulting in April and May collections fell short by Rs 1 lakh crore per month, aggravating the problem of compensation to states.
- The GST Council will meet again in July to discuss exclusively compensation cess which has to be given to the states.
About GST Council
GST Council is an apex member committee to modify or to procure any law or regulation based on the context of goods and services tax in India. The council is headed by the union finance minister Nirmala Sitharaman assisted with the finance minister of all the states of India.
- It was constituted on 15th September 2016 under Article 279A of the Constitution.
