40th GST Council Meeting Highlights, Updates, Outcome and More

The 40th meeting of the Goods and Services Tax (GST) Council, held on June 12, 2020, emerged as a pivotal event amidst the challenges posed by the COVID-19 pandemic. Chaired by the Hon’ble Finance Minister, Smt. Nirmala Sitharaman, the Council addressed crucial agendas aimed at providing relief to taxpayers and businesses.

This blog explores the key agendas, highlights, and outcomes of the meeting, shedding light on the measures implemented to alleviate financial burdens, streamline compliance processes, and enhance the overall GST experience. From late fee waivers to the creation of State and Area Benches for dispute resolution, the meeting unfolded a spectrum of initiatives showcasing the government’s commitment to supporting businesses during unprecedented times.

Key Agendas of the 40th GST Council Meeting

Key Agendas Discussed in the 40th GST Council Meeting:

1. Confirmation of Minutes

Confirmation of the Minutes of the 39th GST Council Meeting held on March 14, 2020.

2. Review of Revenue Position

Discussion on the revenue position.

3. Issues Recommended by the Law Committee

• Amendment in CGST Rules to prescribe the rates for the Composition Scheme under Section 10(2A).
• Proposal to issue Removal of difficulty order for extending the time limit for revocation of cancellation of registration.
• Notification of provisions of the Finance Act, 2020 amending various sections of the CGST Act and the IGST Act.
• Reduction of late fees and rate of interest for small taxpayers (taxpayers with aggregate turnover up to Rs. 5 crores) for the tax period May 2020, June 2020, and July 2020.
• Reduction in interest rate for delay in payment of GST for the remaining part of Financial Year 2020-21.
• Reduction in late fees for FORM GSTR3B from July 2017 to January 2020 – One-time amnesty to clean up pendency in return filing in the GST regime.

4. Deemed Ratification by the GST Council

Deemed ratification of the Central Government’s Notifications, Circulars, and Orders.

5. Decisions of the GST Implementation Committee (GIC)

Presentation and discussion on decisions made by the GST Implementation Committee for the information of the Council.

6. Decisions/Recommendations of the IT Grievance Redressal Committee

Presentation and discussion on decisions and recommendations of the IT Grievance Redressal Committee for the information of the Council.

7. Creation of State and Area Benches of the Goods and Services Tax Appellate Tribunal (GSTAT)

Discussion on the creation of State and Area Benches of the Goods and Services Tax Appellate Tribunal (GSTAT) for the State of Uttar Pradesh.

8. Quarterly Report of the National Anti-Profiteering Authority (NAA)

Presentation of the Quarterly Report of the National Anti-Profiteering Authority (NAA) for the quarter of January to March 2020 for the information of the GST Council.

9. Constitution of Grievance Redressal Committee at CBIC Zonal/State level

Discussion on the constitution of the Grievance Redressal Committee at the CBIC Zonal/State level for the redressal of grievances of taxpayers on GST-related issues.

10. Inverted Rate Structure in GST – Correction of inverted rates on certain key sectors.

11. Any Other Agenda Items with the Permission of the Chairperson

• Sharing of GST data with the Comptroller and Auditor General of India for GST audit.
• Discussion on Compensation to States.

12. Date of the Next Meeting of the GST Council.

Highlights of the 40th GST Council Meeting

Here are the key highlights of the 40th GST Council Meeting:

1. Extension of Late Fee Waiver and Reduced Interest Rate

• The late fees for GSTR-3B return for tax periods May, June, and July 2020 were waived for taxpayers with an aggregate turnover of up to Rs. 5 crores.
• The reduced interest rate of 9% for delayed payment of GST was extended for the remaining part of the financial year 2020-21.

2. One-Time Amnesty for Return Filing Pendency

• A one-time amnesty scheme was introduced to clear up the backlog of pending GSTR-3B returns filed between July 2017 and January 2020.
• Taxpayers who had not filed these returns were allowed to do so without any late fees or interest charges if there was no tax liability. For returns with tax liability, the maximum late fee was capped at Rs. 500 per return.

3. Extended Time Limit for Revocation of Cancelled GST Registrations:

• The time limit for seeking revocation of canceled GST registrations was extended till September 30, 2020, for all registrations canceled up to June 12, 2020.
• This extension provided relief to businesses that had faced registration cancellations due to the pandemic-related disruptions.

4. Deemed Ratification of Notifications, Circulars, and Orders:

• The GST Council deemed as ratified all notifications, circulars, and orders issued by the Central Government under the CGST/IGST Act from September 20, 2017, to June 12, 2020.
• This formalization validated these regulatory instruments and provided clarity to taxpayers.

5. Decisions of GST Implementation Committee (GIC)

• The Council reviewed and accepted the decisions taken by the GIC, including measures to improve GST compliance and facilitate taxpayer interactions.
• These decisions were aimed at streamlining GST processes and enhancing the overall taxpayer experience.

6. Decisions of IT Grievance Redressal Committee

• The Council was informed about the decisions taken by the IT Grievance Redressal Committee, which addressed various IT-related issues faced by taxpayers.
• These decisions aimed to resolve technical glitches and improve the functioning of the GST IT infrastructure.

7. Creation of State and Area Benches of GST Appellate Tribunal (GSTAT) for Uttar Pradesh

• The Council approved the creation of State and Area Benches of the GSTAT for the state of Uttar Pradesh.
• This expansion of the GSTAT was intended to provide quicker and more accessible dispute resolution mechanisms for taxpayers in the state.

8. Quarterly Report of the National Anti-Profiteering Authority (NAA)

• The Council took note of the quarterly report presented by the NAA, which highlighted the actions taken against profiteering by businesses under the GST regime.
• The report emphasized the NAA’s efforts to protect consumer interests and ensure fair pricing practices.

Updates on the Implementation and Outcome of the 40th GST Council Meeting Highlights

The decisions taken at the 40th GST Council meeting have been properly implemented providing respite to businesses, simplifying compliance processes, and making the entire GST experience a positive one for the taxpayers. The government continues to track the effectiveness of these measures and fine-tune them in case they are necessary to support the workability of the GST system.

Late Fee Waiver and Reduced Interest Rate

• The late fee waiver for GSTR-3B returns for tax periods May, June, and July 2020 for taxpayers with an aggregate turnover of up to Rs. 5 crore was successfully implemented.
• The reduced interest rate of 9% for delayed payment of GST was extended for the remaining part of the financial year 2020-21 and has since continued.

One-Time Amnesty for Return Filing Pendency

• The one-time amnesty scheme for clearing up the backlog of pending GSTR-3B returns filed between July 2017 and January 2020 was successfully implemented.
• A significant number of taxpayers took advantage of this scheme to regularize their return filing status.

Extended Time Limit for Revocation of Cancelled GST Registrations

• The extended time limit for seeking revocation of canceled GST registrations up to September 30, 2020, was effectively utilized by businesses.
• This extension provided a window of opportunity for businesses to restore their GST registrations and resume normal operations.

Deemed Ratification of Notifications, Circulars, and Orders

• The deemed ratification of all notifications, circulars, and orders issued by the Central Government under the CGST/IGST Act from September 20, 2017, to June 12, 2020, was formalized.
• This ratification provided legal validity to these regulatory instruments and ensured their continued applicability.

Decisions of GST Implementation Committee (GIC)

• The decisions taken by the GIC, including measures to improve GST compliance and facilitate taxpayer interactions, were implemented effectively.
• These measures have contributed to streamlining GST processes, enhancing taxpayer education, and improving the overall GST experience.

Decisions of IT Grievance Redressal Committee

• The decisions taken by the IT Grievance Redressal Committee, addressing various IT-related issues faced by taxpayers, were implemented effectively.
• These measures have resulted in resolving technical glitches, improving the functioning of the GST IT infrastructure, and providing timely redressal to taxpayer grievances.

Creation of State and Area Benches of GST Appellate Tribunal (GSTAT) for Uttar Pradesh

• The State and Area Benches of the GSTAT for Uttar Pradesh were successfully established and became operational.
• This expansion of the GSTAT has provided taxpayers in Uttar Pradesh with quicker and more accessible dispute-resolution mechanisms.

Quarterly Report of the National Anti-Profiteering Authority (NAA)

• The NAA continued to issue quarterly reports highlighting its efforts to protect consumer interests and ensure fair pricing practices under the GST regime.
• These reports provide transparency and accountability in the enforcement of anti-profiteering measures.

What does this Meeting have for Taxpayers and Businessmen?

Key benefits for taxpayers and businesses:

1. Relief from Late Fees and Reduced Interest Charges

Taxpayers with an aggregate turnover of up to Rs. 5 crore were granted a waiver of late fees for GSTR-3B returns filed between May, June, and July 2020. Additionally, the reduced interest rate of 9% for delayed payment of GST was extended for the remaining part of the financial year 2020-21.

2. Opportunity to Regularize Return Filing

A one-time amnesty scheme was introduced to clear up the backlog of pending GSTR-3B returns filed between July 2017 and January 2020. This scheme allowed taxpayers to regularize their return filing status without facing any penalties.

3. Extended Time Limit for Restoring Cancelled Registrations

Businesses that had their GST registrations canceled were given an extended time limit until September 30, 2020, to seek revocation and restore their registrations. This extension provided a chance for businesses to resume normal operations under the GST regime.

4. Simplified Compliance and Legal Certainty

The deemed ratification of all notifications, circulars, and orders issued by the Central Government under the CGST/IGST Act from September 20, 2017, to June 12, 2020, provided legal validity to these regulatory instruments and simplified compliance for taxpayers.

5. Streamlined GST Processes and Enhanced Taxpayer Experience

The implementation of decisions taken by the GST Implementation Committee (GIC) and the IT Grievance Redressal Committee resulted in streamlined GST processes, enhanced taxpayer education, improved IT infrastructure, and quicker resolution of taxpayer grievances.

6. Protection of Consumer Interests

The continued issuance of quarterly reports by the National Anti-Profiteering Authority (NAA) ensured transparency and accountability in the enforcement of anti-profiteering measures, protecting consumer interests and ensuring fair pricing practices under the GST regime.

Also Read:

39th GST Council Meeting Highlights, Updates, Outcome, And More

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More Information

For more information on the 40th GST Council Meeting, please visit the official website of the Central Board of Indirect Taxes and Customs (CBIC) at https://cbic-gst.gov.in/ or https://gstcouncil.gov.in/gst-council-meetings 

Aaryan Singh

B.Com degree with finance and accounting Specialisation in Goods and Service Tax (GST) and taxation system Completed certification course on GST from ICAI in 2022 Online GST practitioner course completed in 2023 from Indian Institute of Skill Development and Training.

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