Update on 35th GST Council Meeting
The 35th GST Council convened on June 21, 2019 was the first meeting after formation of the new government. The following are the key takeaways from this meeting:
A. Extension of due dates of various returns
1. The due date of filing annual return and reconciliation statement (FORM GSTR-9 and FORM GSTR-9C) for financial year (FY)
2017-18 have been extended to August 31, 2019.
The extension in timeline to file annual return by two months is a major relief to
all taxpayers some of which were not fully prepared for filing the same. However, there was no
announcement for simplifying these forms which was also one of the demands from the taxpayers
2. The due date for filing FORM GST ITC-04 (job work return) for the period July 2017 to June 2019 is extended to August 31, 2019.
3. The effective date of Rule 138E of the Central Goods and Services Tax Rules, 2017 (‘CGST Rules’) has been extended to August
21, 2019. Rule 138E prohibits taxpayers from generating e-way bill due to non-filing of returns for two consecutive tax periods.
(Notification No.25/2019 dated June 21, 2019)
4. The new return system will be rolled out from October 2019. This will start on trail basis from July 2019.
NITYA Comments: For detailed analysis, please refer our update ‘NITYA’s Insight l Issue 29’
dated June 13, 2019
B. Legislative Changes
1. Extension of tenure of NAA
* The term of National Anti-Profiteering Authority (‘NAA’) has been extended further by two more years. Further, where the taxpayer does not deposit the profiteered amount within 30 days of NAA order, penalty of 10 percent of profiteered amount will also be payable.
During the press conference after the meeting, the Revenue Secretary hinted for stringent action against taxpayers not passing on the benefits of GST rate cuts. The taxpayer community have repeatedly sought for mechanism for computing the profiteered amount. It is unfair to implement profiteering provisions and impose significant penalty as well in the absence of guidelines to determine the profiteering.
* GST Council has proposed to introduce e-invoicing in a phased manner to curb tax leakages. Initially, this facility will be available to large corporates for B2B transactions and will be rolled out from January 2020 on voluntary basis.
* As per the news reports, the taxpayers will be required to generate e-invoices on GST portal. This will require the taxpayer’s IT system to be linked with GST portal and e-way bill portal. This will enable flow of information on real time basis for preparation of returns as well.
3. Other proposals
* The Council has proposed issuance of e-tickets mandatory for multiplexes.
* For ease of registration, there will be no mandatory requirement to uploading numerous documents. Now, an applicant can
obtain GST registration basis Aadhaar Card.
* The Council has also decided location of various benches of GST Appellate Tribunal. It has decided to have common bench for
Sikkim, Nagaland, Manipur and Arunachal Pradesh.
C. Proposals for changes in tax rates
* The GST Council has referred the proposals for change in rate of GST for following goods to the fitment committee:
– Electrical vehicles, charger of electrical vehicles and leasing of electrical vehicles; and
– Value of goods and services portion in solar power generating systems and wind turbines
systems (’non-renewable power systems’)
The rate of GST on non-renewable power systems was recently amended with
70% of the contract value to be attributable to goods attracting GST rate of 5% and 30% of the
value attributable to services attracting GST rate of 18%. Various associations have filed writ
petitions that as the value of goods portion is high, the same should be increased to 90%.