COVID Equipments

Ø As a COVID-19 relief measure, specified COVID-19 related goods such as medical oxygen, oxygen concentrators and other oxygen storage and transportation equipment, certain diagnostic markers test kits and COVID-19 vaccines, etc., have been recommended for full exemption from IGST, even if imported on payment basis, for donating to the government or on recommendation of state authority to any relief agency. This exemption shall be valid upto 31.08.2021. Hitherto, IGST exemption was applicable only when these goods were imported “free of cost” for free distribution. The same will also be extended till 31.8.20201. It may be mentioned that these goods are already exempted from Basic Customs duty.

Other Goods/Services

Ø Leviability of IGST on repair value of goods re-imported after repairs;

Ø GST rate of 12% to apply on parts of sprinklers/ drip irrigation systems falling under tariff heading

8424 (nozzle/laterals) to apply even if these goods are sold separately

Education Sector

Ø Services supplied to an educational institution including anganwadi (which provide pre-school education also), by way of serving of food including mid- day meals under any midday meals scheme, sponsored by Government is exempt from levy of GST irrespective of funding of such supplies from government grants or corporate donations.

Ø Services provided by way of examination including entrance examination, where fee is charged for such examinations, by National Board of Examination (NBE), or similar Central or State Educational Boards, and input services relating thereto are exempt from GST.

Government Sector

Ø Service by way of milling of wheat/paddy into flour/rice to Government/Local Authority etc. for distribution of such flour or rice under PDS is exempt from GST if the value of goods in such composite supply does not exceed 25%. Otherwise, such services would attract GST at the rate of 5% if supplied to any person registered in GST.

Ø Services supplied to a Government Entity by way of construction of a rope-way attract GST at the rate of 18%.

Ø Services supplied by Govt. to its undertaking/PSU by way of guaranteeing loans taken by such entity

from banks and financial institutions is exempt from GST.

Real Estate

Ø Landowner promoters could utilize credit of GST charged to them by developer promoters in respect of such apartments that are subsequently sold by the land promotor and on which GST is paid. The developer promotor shall be allowed to pay GST relating to such apartments any time before or at the time of issuance of completion certificate.

Ø GST is payable on annuity payments received as deferred payment for construction of road. Benefit of the exemption is for such annuities which are paid for the service by way of access to a road or a bridge.

Maintenance, Repair, Overhaul (MRO)

Ø To extend the same dispensation as provided to MRO units of aviation sector to MRO units of ships/vessels to provide level playing field to domestic shipping MROs vis a vis foreign MROs and accordingly,-

(i) GST on MRO services in respect of ships/vessels shall be reduced to 5% (from 18%);

(ii) PoS of B2B supply of MRO Services in respect of ships/ vessels would be location of recipient of service

Extension of due dates for filing of GST returns

Particulars	Return Period	Due date	Extension
Form GSTR-1/IFF (details of outward supplies of goods or services)	April 2021 May 2021	May 11, 2021 June 11, 2021	May 26, 2021 June 26, 2021
Form GSTR-4 (for registered person having opted for composition levy)	FY 2020-2021	April 30, 2021	July 31, 2021
Form ITC-04 (details of goods/capital goods sent for job work and received back)	January-March 2021	April 25, 2021	June 30, 2021

Reduction in rate of interest for delayed payment of tax

Concessional rate of interest in lieu of 18% on delayed payment of tax in following cases :

Particulars	Return Period	Actual Rate of Interest	Interest Reduced
For registered persons having aggregate turnover > 5 crores	March, April, May 2021	18% p.a.	First 15 days- 9%
For registered persons having aggregate turnover =< 5 crores (including QRMP Scheme)	March, April, May 2021		First 15 days- NIL (for all months) Next 45 days- 9% (for March/QE March Return)
			Next 30 days- 9% (for April return) Next 15 days-9% (for May return)
Composition taxpayers	January to March 2021

Waiver of late fees on delayed filing of GSTR-3B returns

Particulars	Return Period	Due Date	Late Fee Waived Upto
For registered persons having aggregate turnover > 5 crores	March, April, May 2021	20^th of following month	15 days
For registered persons having aggregate turnover =< 5 crores (Other than QRMP Scheme)	March, April, May 2021	20^th of following month	60 days (for March /QE March return) 45 days (for April return) 30 days (for May return)
For registered persons having aggregate turnover upto INR 5 crores (QRMP Scheme)	January to March 2021	22^nd, 24^th of the following month

Late Fee capping for future returns (applicable prospectively)

Particulars	Late Fee Upper Limit
Taxpayers having NIL liability in GSTR-3B or NIL outward supplies in GSTR-1 Composition taxpayers having NIL liability in GSTR-4	Rs. 500/-
Taxpayers having annual aggregate turnover in PY upto 1.5 cr for GSTR-3B & GSTR-1 Composition taxpayers other than NIL liability in GSTR-4	Rs. 2000/-
Taxpayers having annual aggregate turnover in PY between 1.5 cr to 5 cr for GSTR-3B & GSTR-1	Rs. 5,000/-
Taxpayers having annual aggregate turnover in PY above 5 cr for GSTR-3B & GSTR-1	Rs. 10,000/-
TDS return in GSTR-7	Rs. 50 per day upto maximum Rs. 2,000/-

Amnesty Scheme for Late Fee on past GSTR-3B Returns*

Particulars	Lat Fee Upper Limit
Taxpayers who did not have any liability for tax period July, 2017 to April 2021	Rs. 500/- per return
Other Taxpayers for tax period July, 2017 to April, 2021	Rs. 1,000/- per return
*Reduced rate for late fee would apply if GSTR-3B returns for these tax periods are furnished between 1^st June 2021 to 31^st August 2021

Relaxation in reconciliation of Input Tax Credit (‘ITC’)

Cumulative application of rule 36(4) i.e. reconciliation with GSTR-2A for availing ITC for tax periods April,

May and June, 2021 in the return for the period June, 2021

Companies can now file GST returns using EVC (OTP based signature)

Allowing filing of returns by companies using Electronic Verification Code (EVC), instead of Digital Signature Certificate (DSC) till 31^st August 2021.

Annual GST Audit

Ø Annual Return (GSTR-9) for FY 2020-21 to continue to be optional for Small Taxpayers having

turnover upto 2 cr;

Ø Reconciliation Statement (GSTR-9C) for the FY 2020-21 will be required to be filled by taxpayers having turnover above 5Cr;

Ø GST Audit in GSTR-9 and GSTR-9C to be filed for GST Audit of FY 2020-21. Self certification shall apply on FY 2020-21 GST Audit also. Instead of CA certification, self certification can be done.

Notify provision for interest on cash component only w.r.e.f. July 1, 2017

Ø Retrospective amendment in Section 50 of CGST Act w.e.f. July 1, 2021 providing for payment of interest on net cash basis, to be notified at the earliest.

Extension of statutory time limit for other compliances

Time limit for completion of various actions by any authority or by any person under the Central Goods and Services Tax Act, 2017 (‘the CGST Act’), which falls during the period April 15, 2021 to June 29, 2021 extended upto June 30, 2021 subject to specified conditions.*

Extension of time not applicable on:

(i) Issuance of Tax Invoice;

(ii) GSTR-1 & GSTR-3B Returns;

(iii) E-way Bills; etc.

Refund Order Extension: Time limit for issuance of refund order during the period the period April 15, 2021 to the May 30, 2021 extended to fifteen days after receipt of reply to the notice from the registered person or May 31, 2021, whichever is later.

*Wherever the timelines for actions has been extended by Hon’ble Supreme Court, the same would apply.

TAX BY MANISH

Saturday 29 May 2021

GST Council Meeting Key decisions