GST Council Meeting LIVE Updates: Deadline To File GST Returns Extended For Northeastern States

Due date for filing GST returns for November 2019 will be extended in respect of a few Northeastern states.

The Council decided that input tax credit will now be restricted to 10 percent as against 20 percent earlier if invoices not uploaded.

Grievance redressal committees will be set up at zonal or state levels with both CGST and SGST officers, industry representatives and other stakeholders to address problems of taxpayers.

The GST Council has also decided to waive the late fee for filing GSTR1 from July 2017 to November 2019 if all returns are filed before Jan 10. 2020. This has been done to facilitate filing of all past returns.

Besides, E-way bill for the taxpayers who have not filed GSTR-1 for two tax periods will now be blocked.

Input tax credit will now be restricted to 10 percent against 20 percent earlier if invoices are not uploaded.

The GST council has extended the annual return date Form GSTR9 and the reconciliation statement in Form GSTR 9C for 2017-18 to Jan. 31, 2020 from Dec. 31, 2019.

The Council also decided to exempt GST payable on long term lease of industrial or financial infrastructure plot by an entity having 20 percent or more ownership of centre or state government.

Presently, the exemption is available only to those entities having 50 percent or more ownership.

The Council decided to levy a uniform rate of 28 percent on all state-run and state-authorised lotteries. Earlier, state-run lotteries were taxed at 12 percent while state-authorised ones were taxed at 28 percent.

This will be effective from March 1, 2020.

Punjab Finance Minister Manpreet Singh Badal has said that the revenue position shown by the Centre was worse than what they were expected. He said that the delay in GST compensation to states is as good as a debt default.

Delhi Deputy Chief Minister Manish Sissodia has said that every state agreed that changing GST slabs or rates will be a knee-jerk reaction. Instead, he said, loopholes should be plugged in the structure to boost revenue.

West Bengal Finance Minister Amit Mitra has said that the GST Council did not discuss any proposal of a rate hike today. He added that the central government will have not have appropriated funds to compensate states after February.

The council voted in favour of having a single GST rate for lotteries. That’s according to Rajasthan Cabinet Minister Shanti Kumar Dhariwal. However, the discussions were still being held on the quantum of the rate, he added.

Compensation to states for GST losses should be given monthly instead of the current tradition of every two months. That’s according to TS Singh Deo, Chhattisgarh’s GST Council Representative.

The representative also said the state raised the issue of non-payment of Rs 793-crore GST compensation to the state for October-Dec. 15.

Other Highlights:

• Asked for relaxation in Pradhan Mantri Gram Sadak Yojana norms due to problems faced by Naxal activities for building roads.
• Many firms avoiding payment of VAT and paying CST on petroleum products instead leading to loss of revenue for states.
• Prioritise plugging revenue leakages first and not rate hikes.
• Propose levying additional cess on steel, coal, other natural resources; will have to look into constitutional validity of it.
• Proposal to withdraw compensation cess on vessels for industrial use.

Meanwhile, Maharashtra Finance Minister says the Centre still owes states GST compensation for October and November.

The agenda for GST Council meet does not include any rate hikes or increase in compensation cess on cigarettes, said V Narayanaswamy, chief minister of Puducherry.

Other proposals to be raised by the chief minister include:

• Free loans be given to farmers from nationalised bank.
• Farm loan waivers should be shared by both states and centre.
• Incentives should be given to industries in the budget.
• Delhi and Puducherry be treated at par with states devolution of centre funds.
• Government is lowering grants for centrally-sponsored schemes needs to halt.

Delhi Finance Minister and Deputy Chief Minister Manish Sisodia has urged the Modi government to release Rs 8,150 crore for the nation’s capital. “From 2001, Delhi gets only Rs 325 crore from the Centre,” he told reporters ahead of the GST Council meeting.

He also urged the government to give other union territories and municipal corporations funds from the central pool. Moreover, he said the central government should come out with a scheme for Haryana and Uttar Pardesh to subsidise farmers for stubble burning.

Delays from the central government in transferring compensation cess to states adding pressure on state finances, said Thomas Isaac, finance minister of Kerala.

Any shortfall in the compensation cess kitty needs to be met via market borrowings, as agreed upon by the GST Council in its early meetings, Isaac told BloombergQuint in an interview.

On Monday, the central government released Rs 35,298 crore as GST compensation to states and union territories, the Central Board of Indirect Taxes and Customs said in a Twitter post. It did not specify which months this payment corresponds to.

Meanwhile,

The agenda for the 38th Goods and Services Tax Council meeting, scheduled to take place in New Delhi, includes a presentation by the committee of officers to suggest ways to augment tax revenues. The panel had sought views from states for increasing GST collections, and suggestions like removing items from the exempted list, increasing cess on luxury items, were received.

A revamp of the current GST rate structure was also suggested by some of the states. A correction of inverted duty structure—where raw materials are taxed at a higher rate than finished goods leading to accumulation of input credit—is expected.

The panel was constituted as GST revenues started declining, and compensation for losses to states increased, leading to deferment of payments to states due to inadequate funds from the compensation cess fund.

The council would discuss the new GST return filing framework that will be introduced from April 1, and e-invoicing system that will be rolled out on a voluntary basis for businesses with turnover over Rs 500 crore, from Jan. 1.

Another long-pending agenda is a tweak in GST rates for lotteries. A group of ministers constituted to sort out differences among states on having two different rates on lotteries. The panel has suggested having separate rates for state-run lotteries and for those operated by private players.

Currently, lotteries run by state governments are taxed at 12 percent, while those operated by private players are taxed at 28 percent. The GST Council will decide the single GST rate for lotteries.

The GST Council is also expected to discuss a lottery or a reward scheme to lure customers to pay GST. The scheme will reward customers for uploading GST paid invoices, a step aimed at improving compliance.