40th GST Council meeting highlights – zero late fee for those who have nil tax liability, says FM Nirmala Sitharaman

Finance Minister Nirmala Sitharaman today held the 40th GST Councilmeeting, the first such meeting since the nationwide lockdown was announced on March 23. The meeting was held to discuss the government’s revenue position and fixing the compensation mechanism for the states.

The major announcements include zero late fee for the pre-COVID period and reduction of interest rate on late filing of GST returns.

Zero late fee: For the period between July 2017 to January 2020, Finance Minister Nirmala Sitharaman announced that the taxpayers who have no tax liability and have not filed their returns during this period, there will be no late fee.

Interest rate on late filing reduced from 18% to 9%: Interest rate on late filing of GST returns for the period between February 2020 to September 2020 has been reduced from 18% to 9% per annum. This is applicable only to small taxpayers whose aggregate turnover is up to 5 crore.

Further, Sitharaman said that taxpayers who file their pending returns till July 6, 2020, there will be no interest charged. After July 6, interest for small taxpayers will be charged 9% per annum

 

 

Late fee capped at 500: For those who have tax liability, Sitharaman said that the late fee has been capped at 500 for non-filing of GSTR-3B returns for the period between July 2017 and January 2020. This is applicable on all returns filed between July - September 2020.

No increase in GST rates on non-essential items: Sitharaman also said that the Finance Ministry is not in favour of increasing GST rates on non-essential items for now, even though the GST collections have been subdued due to the nationwide lockdown since March 23.

Deadline extended for application for restoration of cancelled GST registrations: Taxpayers whose GST registrations were cancelled and were subsequently unable to apply for restoration of registration will now be able to apply till September 30, 2020. This is valid for all GST registrations which have been cancelled till June 12

Sitharaman also said that there will be a meeting in July to deliberate on the matter of compensation cess to states.

Source::: Business Insider, dated 12/06/2020.