EY GST Update | Recommendations of 31st GST Council Meeting

This is to update you on the 31^st GST Council meeting held in New Delhi today. We have summarized some of the key points that emerged based on the press brief by the Finance Minister and the press release issued by the Ministry of Finance. It may be noted that some of the changes may warrant Amendment in Acts / issuance of relevant notifications / circulars which shall be issued in due course. Some of the key changes have been enumerated here under for ready reference:   

►   The new return filing system shall be introduced on a trial basis from April 01, 2019 and on mandatory basis from July 01, 2019;

►   There would be a single cash ledger for each tax head;

►   A scheme of single authority for disbursement of refund amount sanctioned by either the Centre or the State tax authorities would be implemented on pilot basis;

►   The due date for furnishing the annual returns in FORM GSTR-9, FORM GSTR-9A and reconciliation statement in FORM GSTR-9C for the FY 2017-18 shall be further extended till June 30, 2019. Further, clarificatory changes shall be carried out in the formats/instructions of the annual return / reconciliation statement;

►   The due date for furnishing FORM GSTR-8 by e-commerce operators for the months of October, November and December, 2018 shall be extended till January 31, 2019;

►   The due date for submitting FORM GST ITC-04 for the period July 2017 to December 2018 shall be extended till March 31, 2019;

►   Input Tax Credit in relation to invoices issued by the supplier during FY 2017-18 may be availed by the recipient till the due date for furnishing of FORM GSTR-3B for the month of March, 2019, subject to specified conditions;

►   Late fee shall be waived for all taxpayers in case FORM GSTR-1, FORM GSTR-3B and FORM GSTR-4 for the months / quarters July 2017 to September 2018 are furnished after December 22, 2018 but on or before March 31, 2019;

►   Taxpayers who have not filed the returns for two consecutive tax periods shall be restricted from generating e-way bills;

►   Clarifications shall be issued on certain refund related matters like refund of ITC accumulated on account of inverted duty structure, disbursal of refunds within the stipulated time, time allowed for availment of ITC on invoices, refund of accumulated ITC of compensation cess etc;

►   Changes made by GST Amendment Acts would be notified w.e.f. February 01, 2019;

►   Further, the GST Council has given in principle approval to the following amendments in the GST Acts:

-          Creation of a Centralised Appellate Authority for Advance Ruling (AAAR) to deal with cases of conflicting decisions by two or more State Appellate Advance Ruling Authorities on the same issue;

-          Amendment of section 50 of the CGST Act to provide that interest should be charged only on the net tax liability of the taxpayer, after taking into account the admissible input tax credit, i.e. interest would be leviable only on the amount payable through the electronic cash ledger.

The above recommendations of the Council will be made effective only after the necessary amendments in the GST Acts are carried out.

►   The rate of GST on certain goods attracting 28% has been reduced to 18% and 5% respectively. Also, the rate of GST on certain other goods and services has been reduced / rationalised. The attached press release provides a complete list of such changes in rates of goods / services;

►   The council has decided to refer the following issues to Committees / Group of Ministers:

-       Extending the Composition scheme to small service providers. The rate of tax and threshold limit to be proposed - Law Committee and Fitment Committee;

-       Tax rate on lotteries – Committee of States;

-       Taxation of residential property in real estate sector – Law Committee and Fitment Committee;

-       Threshold limit of exemption under GST regime – GoM on MSMEs.

The GST council in its next meeting in January 2019 would take a view on the above issues.