The 40th GST Council meeting was held on 12th June 2020 via video-conferencing. GST Council was constituted on 15th September 2016 under Article 279A of the Constitution.
The GST Council made the following recommendations :
For Individuals :
- No late fee for taxpayers with nil tax liability
- For people with tax liability, the maximum late fee for non-filing of GSTR-38 returns has been capped at Rs 500 on the condition that they will file their returns between 1st July 2020 and 30th September 2020
For Companies :
- Companies holding no tax liability will not be fined any late fee if they have not filed returns, since 1st July, 2017.
- Companies with tax liabilities will now pay a late fee of Rs 500 per month, instead of Rs 10000 per month.
For taxpayer having turnover up to Rs. 5 Crore :
- Concession on Interest due to COVID 19
- Proposal – To levy interest @9% p.a. instead of 18% p.a. on delayed payment of taxes.
The Council also deferred the decision of raising rates on textiles, fertilisers and footwear to correct the inverted duty structure. States unanimously agreed on the principal of correcting the inverted duty structure but also said that the it is not the right time to raise rates when the idea is to revive demand in the economy.
The Council also decided to meet again in mid-July, only on one point agenda to look into the issue of raising funds to meet the compensation requirements of states. The Council in this July meeting will deliberate on the idea whether Centre can borrow funds from the market to pay off states dues.
The key outcome of this meet was further relief/waiver on late fee and interest payable on late payments as a part of compliance burden of businesses, mainly smaller businesses, as many of these businesses were caught off guard by the lockdown and some of their requests have been well received and considered by the Council.