Highlights of the 35th GST Council Meet

Source: The Economic Times

After swearing in of the Modi led new Government, the 35th GST Council Meeting was the first meeting of the Council that took place under the chairmanship of the new Finance Minister Nirmala Sitharaman on 21^st June 2019 (Friday) in New Delhi.

The Council began with passing a resolution acknowledging the crucial role played by the former Chairperson of GST Council Shri Arun Jaitley and expressed its gratitude for the extraordinary contribution made by him in making the GST Council a shining example of co-operative federalism that it has become today. The Council also thanked the outgoing Members and welcomed the new Members of the Council. It also expressed its deepest condolences at the untimely demise of Shri Prakash Pant, the former Finance Minister of Uttarakhand.

The key highlights of this meeting

1) The Council has also recommended following GST rate related changes on the supply of goods and services.

(A) Electric Vehicles

On issues pertaining to GST concessions on an electric vehicle, charger, and hiring of an electric vehicle, the Council recommended that this has to be examined in detail by the Fitment Committee and shall be brought before the Council in the next meeting.

(B) Solar Power Generating Systems and Wind Turbines

In accordance with the order of the Hon’ble High Court of Delhi, the GST Council directed that issues related to the valuation of Goods and Services in a solar power generating system and the wind turbine are ready to be placed before the Fitment Committee. And, the recommendations of the Fitment Committee would be placed before the next GST Council meeting.

(C) Lottery 

A Group of Ministers (GoM) on Lottery has submitted a report before the Council. After deliberations on the various issues on the rate of the lottery, the Council recommended that certain issues related to taxation (rates and destination principle) require the legal opinion of the Learned Attorney General.

2) In order to provide enough opportunity to taxpayers as well as the system to adapt the new return system shall be introduced in a phased manner. The details of this new return forms are described as below –

• Between July 2019 to September 2019, the new return system (FORM GST ANX-1&FORM GST ANX-2 only)to be available for trial for taxpayers. Taxpayers to continue to file FORM GSTR-1 & FORM GSTR-3B as at present;
• From October 2019 onwards, FORM GST ANX-1 to be made compulsory. Large taxpayers (having an aggregate turnover of more than  ₹ 5 crores in the previous year) to file FORM GST ANX-1 on a monthly basis whereas small taxpayers to file first FORM GST ANX-1 for the quarter October 2019 to December 2019 in January 2020;
• For October and November 2019, large taxpayers to continue to file FORM GSTR-3B on a monthly basis and will file first FORM GST RET-01for December 2019 in January 2020. It may be noted that invoices etc. can be uploaded in FORM GST ANX-1 on a continuous basis both by large and small taxpayers from October 2019 onwards. FORM GST ANX-2 may be viewed simultaneously during this period but no action shall be allowed on such FORM GST ANX-2;
• From October 2019, small taxpayers to stop filing FORM GSTR-3B and to start filing FORM GST PMT-08. They will file their first FORM GSTRET-01 for the quarter of October 2019 to December 2019 in January 2020;
• From January 2020 onwards, FORM GSTR-3B to be completely phased out.

3) On account of difficulties being faced by taxpayers while filing the annual returns in FORM GSTR-9, FORM GSTR-9A and reconciliation statement in FORM GSTR-9C, the due date for furnishing these returns/reconciliation statements to be extended till 31^st August 2019.

4) To provide sufficient time to the trade and industry to furnish the declaration in FORM GST ITC-04, relating to job work, the due date for furnishing the said form for the period July 2017 to June 2019 to be extended till 31^st August 2019.

5) Certain amendments to be carried out in the GST laws to implement the decisions of the GST Council taken in earlier meetings.

6) Rule 138E of the CGST rules, pertaining to blocking of e-way bills on non-filing of returns for two consecutive tax periods, to be brought into effect from 21^st August 2019, instead of the earlier notified date of 21^st June 2019.

7) The last date for filing of intimation, in FORM GST CMP-02, for availing the option of payment of tax under notification No. 2/2019-Central Tax (Rate) dated 7^th March 2019, to be extended from 30^th April 2019 to 31^st July 2019.

Apart from the above significant points, some additional points were also discussed which are as follows –

• The Council discussed and took a decision regarding the location of the State and the Area Benches for the GST Appellate Tribunal (GSTAT) for various States and Union Territories with the legislature. It has been decided to establish a common State Bench for the States of Sikkim, Nagaland, Manipur and Arunachal Pradesh.
• The tenure of National Anti-Profiteering Authority has been extended for 2 years.
• This Council also decided to bring out an electronic invoicing system in a phased manner for B2B transactions. E-invoicing is a rapidly expanding technology which would help numbers of taxpayers in backward integration and automation of tax relevant processes. It would also help the tax department in nullifying the chances of tax evasion. The first Phase is proposed to be voluntary and shall come into effect from Jan 2020.

Conclusion

The 35^th GST Council meet has brought a great sigh of relief to thousands of taxpayers by making the filing process easier through introducing the new return forms. Moreover, as per the recommendation placed by the council before the Fitment Committee would bring a bouquet of good news in the next GST Council meeting.