GST Council recommends various trade facilitation measures and defers implementation of new return filing and e-invoicing system

The Goods and Services Tax (GST) Council held its 39th meeting in New Delhi on 14 March 2020. The key decisions of the council are summarized below:

• The due date for filing annual return in Form GSTR-9 and reconciliation statement in Form GSTR-9C for FY 2018-19 extended till 30 June 2020. Filing of Form GSTR-9C for FY 2018-19 relaxed for entities having aggregate turnover below INR 5 crore.
• Interest for delayed payment of tax, leviable on net tax liability, to be given retrospective effect from 1 July 2017.
• Implementation of a new return system has been deferred. The existing system of filing Form GSTR-1 and Form GSTR-3B to be continued till September 2020.
• Implementation of e-invoicing and QR code is postponed to 1 October 2020. Certain class of registered persons to be exempted from issuing e-invoice or capturing dynamic QR code.
• GST rate on mobile phones and parts increased from 12% to 18% effective 1 April 2020.
• E-wallet scheme to be deferred till 31 March 2021. Consequently, the present exemption from Integrated tax and Compensation cess on imports made under specified schemes will continue up to 31 March 2021.

Extension of due date for filing GST annual return and audit report are in line with the expectations of the businesses. Relaxation to MSMEs may significantly ease compliance burden for the sector.

The council’s decision to defer implementation of new returns and e-invoicing might facilitate industry and tax administration to adequately prepare for the smooth transition to the new system and eliminate the compliance related challenges.

Retrospective effect to the proviso related to interest on delayed tax payment is a welcome move

benefitting the taxpayer. It may settle the disputed position arising out of contrary high court rulings on this matter. Taxpayers who have paid interest on gross tax liability, may explore the possibility of claiming refund of excess interest paid.

On the recommendation to amend CGST rules for recovery of refund on export of goods where

proceeds are not received, government may contemplate appropriate changes in the export

provisions under IGST Act which currently mandates receiving money in convertible foreign

exchange within prescribed time only in case of export of services.