43rd Meeting of the GST Council New Delhi, 28th May, 2021
(GST rates on Goods and Services)
The GST Council in its 43rd meeting held on 28th May, 2021 at New Delhi took
the following decisions relating to changes in GST rates on supply of goods and
services and changes related to GST law and procedure.
Covid relief items
1. As a COVID-19 relief measure, a number of specified COVID-19 related goods
such as medical oxygen, oxygen concentrators and other oxygen storage and
transportation equipment, certain diagnostic markers test kits and COVID-19
vaccines, etc., have been recommended for full exemption from IGST, even if
imported on payment basis, for donating to the government or on recommendation
of state authority to any relief agency. This exemption shall be valid upto 31.08.2021.
Hitherto, IGST exemption was applicable only when these goods were imported “free
of cost” for free distribution. The same will also be extended till 31.8.20201. It may be
mentioned that these goods are already exempted from Basic Customs duty. Further
in view of rising Black Fungus cases, the above exemption from IGST has been
extended to Amphotericin B.
2. As regards individual items, it was decided to constitute a Group of Ministers
(GoM) to go into the need for further relief to COVID-19 related individual items
immediately. The GOM shall give its report by 08.06.2021.
Other goods
3. To support the Lympahtic Filarisis (an endemic) elimination programme being
conducted in collaboration with WHO, the GST rate on Diethylcarbamazine (DEC)
tablets has been recommended for reduction to 5% (from 12%).
4. Certain clarifications/clarificatory amendments have been recommended in
relation to GST rates. Major ones are, -
a. Leviability of IGST on repair value of goods re-imported after repairs
b. GST rate of 12% to apply on parts of sprinklers/ drip irrigation systems
falling under tariff heading 8424 (nozzle/laterals) to apply even if these goods are sold separately.
5. Services
i. To clarify those services supplied to an educational institution including
anganwadi (which provide pre-school education also), by way of serving of
food including mid- day meals under any midday meals scheme, sponsored by
Government is exempt from levy of GST irrespective of funding of such supplies
from government grants or corporate donations.
ii To clarify these services provided by way of examination including entrance
examination, where fee is charged for such examinations, by National Board of
Examination (NBE), or similar Central or State Educational Boards, and input
services relating thereto are exempt from GST.
iii To make appropriate changes in the relevant notification for an explicit provision
to make it clear that land owner promoters could utilize credit of GST charged
to them by developer promoters in respect of such apartments that are
subsequently sold by the land promotor and on which GST is paid. The
developer promotor shall be allowed to pay GST relating to such apartments
any time before or at the time of issuance of completion certificate.
iv To extend the same dispensation as provided to MRO units of aviation sector to
MRO units of ships/vessels so as to provide level playing field to domestic
shipping MROs vis a vis foreign MROs and accordingly, -
(a) GST on MRO services in respect of ships/vessels shall be reduced to 5% (from
18%).
(b) PoS of B2B supply of MRO Services in respect of ships/ vessels would be
location of recipient of service
v. To clarify that supply of service by way of milling of wheat/paddy into flour
(fortified with minerals etc. by millers or otherwise )/rice to Government/ local
authority etc. for distribution of such flour or rice under PDS is exempt from GST
if the value of goods in such composite supply does not exceed 25%. Otherwise,
such services would attract GST at the rate of 5% if supplied to any person
registered in GST, including a person registered for payment of TDS.
vi. To clarify that GST is payable on annuity payments received as deferred payment
for construction of road. Benefit of the exemption is for such annuities which are paid for the service by way of access to a road or a bridge.
vii To clarify those services supplied to a Government Entity by way of construction
of a rope-way attract GST at the rate of 18%.
viii To clarify that services supplied by Govt. to its undertaking/PSU by way of
guaranteeing loans taken by such entity from banks and financial institutions is
exempt from GST.
6. Measures for Trade facilitation:
1. Amnesty Scheme to provide relief to taxpayers regarding late fee for
pending returns:
To provide relief to the taxpayers, late fee for non-furnishing FORM GSTR3B for the tax periods from July, 2017 to April, 2021 has been reduced / waived
as under: -
i. late fee capped to a maximum of Rs 500/- (Rs. 250/- each for CGST &
SGST) per return for taxpayers, who did not have any tax liability for
the said tax periods;
ii. late fee capped to a maximum of Rs 1000/- (Rs. 500/- each for CGST &
SGST) per return for other taxpayers;
The reduced rate of late fee would apply if GSTR-3B returns for these tax
periods are furnished between 01.06.2021 to 31.08.2021.
2. Rationalization of late fee imposed under section 47 of the CGST Act:
To reduce burden of late fee on smaller taxpayers, the upper cap of late fee is
being rationalized to align late fee with tax liability/ turnover of the taxpayers,
as follows:
A. The late fee for delay in furnishing of FORM GSTR-3B and FORM GSTR1 to be capped, per return, as below:
(i) For taxpayers having nil tax liability in GSTR-3B or nil outward
supplies in GSTR-1, the late fee to be capped at Rs 500 (Rs 250 CGST +
Rs 250 SGST)
(ii) For other taxpayers:
a. For taxpayers having Annual Aggregate Turnover (AATO) in
preceding year upto Rs 1.5 crore, late fee to be capped to a
maximum of Rs 2000 (1000 CGST+1000 SGST);
b. For taxpayers having AATO in preceding year between Rs 1.5
crore to Rs 5 crore, late fee to be capped to a maximum of Rs 5000
(2500 CGST+2500 SGST);
c. For taxpayers having AATO in preceding year above Rs 5 crores,
late fee to be capped to a maximum of Rs 10000 (5000 CGST+5000
SGST).
B. The late fee for delay in furnishing of FORM GSTR-4 by composition
taxpayers to be capped to Rs 500 (Rs 250 CGST + Rs 250 SGST) per return,
if tax liability is nil in the return, and Rs 2000 (Rs 1000 CGST + Rs 1000 SGST)
per return for others.
C. Late fee payable for delayed furnishing of FORM GSTR-7 to be reduced to
Rs.50/- per day (Rs. 25 CGST + Rs 25 SGST) and to be capped to a maximum
of Rs 2000/- (Rs. 1,000 CGST + Rs 1,000 SGST) per return.
All the above proposals to be made applicable for prospective tax periods.
3. COVID-19 related relief measures for taxpayers:
In addition to the relief measures already provided to the taxpayers vide the
notifications issued on 01.05.2021, the following further relaxations are
being provided to the taxpayers:
A. For small taxpayers (aggregate turnover upto Rs. 5 crore)
a. March & April 2021 tax periods:
i. NIL rate of interest for first 15 days from the due date of furnishing
the return in FORM GSTR-3B or filing of PMT-06 Challan, reduced
rate of 9% thereafter for further 45 days and 30 days for March,2021
and April, 2021 respectively.
ii. Waiver of late fee for delay in furnishing return in FORM GSTR3B for the tax periods March / QE March, 2021 and April 2021 for
60 days and 45 days respectively, from the due date of furnishing
FORM GSTR-3B.
iii. NIL rate of interest for first 15 days from the due date of furnishing
the statement in CMP-08 by composition dealers for QE March
2021, and reduced rate of 9% thereafter for further 45 days.
b. For May 2021 tax period:
i. NIL rate of interest for first 15 days from the due date of furnishing
the return in FORM GSTR-3B or filing of PMT-06 Challan, and
reduced rate of 9% thereafter for further 15 days.
ii. Waiver of late fee for delay in furnishing returns in FORM GSTR3B for taxpayers filing monthly returns for 30 days from the due
date of furnishing FORM GSTR-3B.
B. For large taxpayers (aggregate turnover more than Rs. 5 crore)
i. A lower rate of interest @ 9% for first 15 days after the due date of
filing return in FORM GSTR-3B for the tax period May, 2021.
ii. Waiver of late fee for delay in furnishing returns in FORM GSTR3B for the tax period May, 2021 for 15 days from the due date of
furnishing FORM GSTR-3B.
C. Certain other COVID-19 related relaxations to be provided, such as
1. Extension of due date of filing GSTR-1/ IFF for the month of May 2021
by 15 days.
2. Extension of due date of filing GSTR-4 for FY 2020-21 to 31.07.2021.
3. Extension of due date of filing ITC-04 for QE March 2021 to 30.06.2021.
4. Cumulative application of rule 36(4) for availing ITC for tax periods
April, May and June, 2021 in the return for the period June, 2021.
5. Allowing filing of returns by companies using Electronic Verification
Code (EVC), instead of Digital Signature Certificate (DSC) till 31.08.2021.
D. Relaxations under section 168A of the CGST Act: Time limit for
completion of various actions, by any authority or by any person, under
the GST Act, which falls during the period from 15th April, 2021 to 29th
June, 2021, to be extended upto 30th June, 2021, subject to some exceptions.
4. Simplification of Annual Return for Financial Year 2020-21:
i. Amendments in section 35 and 44 of CGST Act made through Finance
Act, 2021 to be notified. This would ease the compliance requirement in
furnishing reconciliation statement in FORM GSTR-9C, as taxpayers
would be able to self-certify the reconciliation statement, instead of
getting it certified by chartered accountants. This change will apply for
Annual Return for FY 2020-21.
ii. The filing of annual return in FORM GSTR-9 / 9A for FY 2020-21 to be
optional for taxpayers having aggregate annual turnover upto Rs 2 Crore;
iii. The reconciliation statement in FORM GSTR-9C for the FY 2020-21 will
be required to be filed by taxpayers with annual aggregate turnover above
Rs 5 Crore.
5. Retrospective amendment in section 50 of the CGST Act with effect from
01.07.2017, providing for payment of interest on net cash basis, to be notified
at the earliest.
7. Other Measures
i. GST Council recommended amendments in certain provisions of the Act so
as to make the present system of GSTR-1/3B return filing as the default return
filing system in GST.
Note: The recommendations of the GST Council have been presented in this release in simple language for information of all stakeholders. The same would be given effect through relevant Circulars/Notifications which alone shall have the force of law.
