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Arjun (Fictional Character): Krishna, the 40th GST Council Meeting was held under the chairmanship of Smt. Nirmala Sitharaman on 12th June, 2020. What recommendations has the GST council made on Law & procedure changes?

Krishna (Fictional Character): Arjuna, the 40th GST Council meeting chaired by Union Finance & Corporate Affairs Minister Smt. Nirmala Sithraman through video conferencing was held on 12th June 2020. The GST council has made recommendations for measures of trade facilitation including Reduction in late fees for past returns, Relief measures for small taxpayers & one time extension in period for seeking revocation of cancellation of registration. Let us discuss these recommendations in detail.

Arjun (Fictional Character): Krishna, what is the recommendation for reduction in late fees for past returns?

Krishna (Fictional Character): Arjuna, as a course of action to wipe up the pendency in return filing, the late fees for non-furnishing of Form GSTR-3B for the tax period of July, 2017 (i.e. beginning of GST period) to January, 2020 has been recommended to be reduced/waiver as under:

Recommendations of 40th GST Council Meet
  1. "No late fees" if there is "No tax liability".( i.e Nil late fees in case there is no tax liability)
  2. Maximum late fees is capped at Rs. 500/- per return if tax liability exists.

Note: The reduced rate of late fees would be applicable to all the GSTR-3B returns furnished between 01/07/2017 to 30/09/2020.

Arjun (Fictional Character): Krishna, what is the recommended relief for small taxpayers?

Krishna (Fictional Character): Arjuna, small taxpayers are the taxpayers having aggregate turnover upto Rs. 5 Crores. Relief recommended in the GST Council meeting for them is as under:

  1. Relief for late filing of returns for the period of February, March, and April 2020 : For the said months, small taxpayers would not be charged any interest on late furnishing of returns till the notified dates for relief (Staggered upto 6th July, 2020), and a reduced rate of interest at 9% per annum instead of 18% per annum would be charged till 30/09/2020.
  2. Relief for subsequent tax periods of May, June & July, 2020 : Due to the COVID-19 pandemic, small taxpayers would be provided a relief by waiving the late fees and interest, if the returns in the form Form GSTR-3B for the supplies effected in the months of May, June, & July, 2020 are furnished by September, 2020 (staggered dated are yet to be notified)

Arjun (Fictional Character): Krishna, what is the recommendation for seeking revocation of cancellation of registration?

Krishna (Fictional Character): Arjuna, an opportunity would be provided for the taxpayers who could not get their cancelled GST registration restored in prescribed time, to revoke the cancellation of registration upto 30/09/2020, in all cases where registrations have been cancelled till 12th June, 2020.

Arjun (Fictional Character): Krishna, what are the issues in the given recommendations of the 40th GST Council meeting?

Krishna (Fictional Character): Arjuna, the GST council has not clarified some matters as given below:

  1. What would be the late fees for furnishing returns of past periods, for the returns pertaining to February, March, and April 2020, if furnished after 06/07/2020, but before 30/09/2020?
  2. No clarification regarding GSTR-1.
  3. No clarification regarding returns for Composition dealers, TDS & TCS.
  4. No relief for taxpayers having aggregate turnover above Rs. 5 Cr.
  5. What about taxpayers who have paid the late fees for earlier periods?

These matters are still to be addressed by the GST Council.

Arjun (Fictional Character): Krishna, what should the taxpayer learn from this?

Krishna (Fictional Character): Arjuna, Finance minister Nirmala Sitharaman said that GST collections had fallen to about 45%, aggravating the problem of compensation to states, even as states demanded they be funded through market borrowing. The GST Council will meet again in July to discuss exclusively on compensation cess which has to be given to the states and other matters.


Published by

CA Umesh Sharma
Category GST   Report

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