Finance Minister Nirmala Sitharaman on June 12 addressed the media after chairing the 40th Goods & Services Tax (GST) Council Meeting.
Here are the key highlights from the Finance Minister's briefing:
Reduction in Late Fee for Old Pending Returns
To clean up pendency in return filing, the late fee for non-furnishing form GSTR-3B for the period July 2017 to January 2020 has been reduced/waived
No late fees will be levied on registered entities with Nil or Zero GST return filing between July 2017 and January 2020.
For people who have a tax liability, the maximum late fee for non-filing of GSTR-3B returns for period July 2017 to January 2020 has been capped at Rs 500. The reduced rate Late Fee would apply for all the GSTR-3B returns furnished between July 1 and September 30. This has been reduced significantly from the earlier cap of Rs. 10,000 per month
Reduction in Interest for Small Tax Payers
For small taxpayers (aggregate turnover up to Rs 5 crore), the rate of interest for late furnishing of returns after the specified due dates, reduced to 9% per annum from 18% till September 30.
Waiver of Late Fee for subsequent months
Small taxpayers are provided relief by waiver of late fees and interest if the returns in form GSTR-3B, for the months of May, June and July, are furnished by September 30th
One-time extension for seeking restoration of canceled registration
Taxpayers can file for restoration of GST registrations that have been cancelled till June 12, 2020, through a one-time extension being offered till September 30.
GST Collections
The impact of coronavirus followed by the lockdown has hurt GST collections, with the April and May collections falling well short of targets of Rs 1 lakh crore per month. They are currently at only 45% of the budgeted amount.
The government is under a difficult situation and financial stress where the expenses have considerably increased for various COVID-19 measures while the collections are far below the estimates.
Compensation Cess
The total outgo to states stands at Rs 1.51 lakh crore for FY 2019-20, with installment of March remaining. Between April and November 2019, the government had released Rs 1.15 lakh crore as funds to states. About Rs 12,500 crore more needs to be paid to states for the month of March.
The fund shortfall remains an issue even with the Centre having released Rs 36,400 crore to states as compensation cess for December to February period, while states have asked the GST Council to raise money through market borrowings.
The GST Council will meet again in July to discuss exclusively compensation cess which has to be given to the states.
Rate Rationalisation
The Council however rationalisation of GST rates for textiles, footwear and fertiliser, even though principally all members agreed that the duty rates need to be corrected as these products faced inverted duty structures.