LATEST CHANGES IN GST

[Mr. M. GOVINDARAJAN]

40^th GST Council meeting

The 40^th GST Council has made the following recommendations on Law & Procedures changes-

• Measures for Trade facilitation

• Reduction in Late Fee for past Returns;
• Further relief for small taxpayers for late filing of returns for February, March & April 2020 Tax periods;
• Relief for small taxpayers for subsequent tax periods (May, June & July 2020)
• One time extension in period for seeking revocation of cancellation of registration.

Certain clauses of the Finance Act, 2020 amending CGST Act 2017 and IGST Act, 2017 to be brought into force from 30.06.2020.

Latest changes

On line with the decisions of GST council meeting the Government brought out Notifications, one circular and one instruction as detailed below-

• Notification No. 49/2020-Central Tax, dated 24.06.2020;
• Notification No. 50/2020-Central Tax, dated 24.06.2020;
• Notification No. 51/2020-Central Tax, dated 24.06.2020;
• Notification No. 52/2020-Central Tax, dated 24.06.2020;
• Notification No. 53/2020-Central Tax, dated 24.06.2020;
• Circular No. 141/11/2020-GST, dated 24.06.2020;
• Instruction No.3/2/2020, dated 24.06.2020.

Notification No. 49/2020-Central Tax

Finance Act, 2020 has made certain amendments to the provisions of GST laws. 

Union territory

Section 118 of the Finance Act amended the definition of section 2(114) of CGST Act, 2017 (‘Act’ for short).  Section 2(114) of the CGST Act defines the expression ‘Union territory’ as the territory of-

1.  the Andaman and Nicobar Islands;
2. Lakshadweep;
3. Dadra and Nagar Haveli
4. Daman and Diu;
5. Chandigarh; and
6. other territory.

The amendment substituted clause (c) and (d) by –

(c)  Dadra and Nagar Haveli and Daman and Diu;

(d) Ladakh;

Constitution of Appellate Tribunal

Section 125 of the Finance Act amended section 109 of CGST Act, 2017.   Section 109 of the Act provides for the constitution of GST Appellate Tribunal.  Section 109(6) provides that- The Government shall, by notification, specify for each State or Union territory except for the State of Jammu and Kashmir, a Bench of the Appellate Tribunal (hereafter in this Chapter, referred to as “State Bench”) for exercising the powers of the Appellate Tribunal within the concerned State or Union territory:

Provided that for the State of Jammu and Kashmir, the State Bench of the Goods and Services Tax Appellate Tribunal constituted under this Act shall be the State Appellate Tribunal constituted under the Jammu and Kashmir Goods and Services Tax Act, 2017.

The Finance Act, 2020 omitted the words ‘except for the State of Jammu and Kashmir’ and also the first proviso of section 109 (6) of the Act.

Power to issue instructions or directions

Section 129 of the Finance Act amended section 168 of the CGST Act, 2017.  Section 168 (2) of the Act provides that the Commissioner specified in clause (91) of section 2, sub-section (3) of section 5, clause (b) of sub-section (9) of section 25, sub-sections (3) and (4) of section 35, sub-section (1) of section 37, sub-section (2) of section 38, sub-section (6) of section 39, sub-section (1) of section 44, sub-sections (4) and (5) of section 52, sub-section (5) of section 66, sub-section (1) of section 143, sub-section (1) of section 151, clause (l) of sub-section (3) of section 158 and section 167 shall mean a Commissioner or Joint Secretary posted in the Board and such Commissioner or Joint Secretary shall exercise the powers specified in the said sections with the approval of the Board.

The Finance act substituted the words ‘sub-section (1) of section 143, except the second proviso thereof’ for the words sub-section (5) of section 66, sub-section (1) of section 143.

Removal of difficulties

Section 130 of the Finance Act amended section 172 of the CGST Act, 2017.  The first proviso to section 172(1) provides that no general or special order shall be made after the expiry of a period of three years from the date of commencement of this Act to make such provisions not inconsistent with the provisions of this Act or the rules or regulations made there under, as may be necessary or expedient for the purpose of removing the said difficulty.

The Finance Act, 2020 extended such power of the Government from three years to five years.  As such the Government can issue orders to remove the difficulties upto 30.06.2022.

Effective date

Vide Notification No. 49/2020-Central Tax, dated 24.06.2020, the Central Government appointed 30.06.2020 as effective date for the above amendments.

Notification No.50/2020-Central Tax

Vide Notification No. 50/2020-Central Tax, dated 24.06.2020 the Central Government substituted the existing table in Rule 7 to the new one which is reproduced as below-

Table

Sl. No.	Section under which composition levy is opted	Category of registered persons	Rate of tax
(1)	(1A)	(2)	(3)
1.	Sub-sections (1) and (2) of section 10	Manufacturers, other than manufacturers of such goods as may be notified by the Government	0.5% of the turnover in the State or Union territory
2.	Sub-sections (1) and (2) of section 10	Suppliers making supplies referred to in clause (b) of paragraph 6 of Schedule II	2.5% of the turnover in the State or Union territory
3.	Sub-sections (1) and (2) of section 10	Any other supplier eligible for composition levy under sub-sections (1) and (2) of section 10	0.5% of the turnover of taxable supplies of goods and services in the State or Union territory
4.	Sub-section (2A) of section 10	Registered persons not eligible under the composition levy under sub-sections (1) and (2), but eligible to opt to pay tax under sub-section (2A), of section 10	3% of the turnover of taxable supplies of goods and services in the State or Union territory.’’.

The said amendment was made effective from 01.04.2020.

Notification No. 51/2020-Central Tax

Notification No. 31/2017-Central Tax, dated 28.06.2017 prescribed the rate of interest that can be leviable under section 50(1), 50(3), 54(12), 56 and proviso to section 56.

Vide Notification No. 51/2020-Central Tax, the central Government substituted the proviso to the table containing interest rate and also the table  containing the interest rate for certain categories of taxpayers who failed to file GSTR 3B return along with the payment of tax which are reproduced as below-

 Provided that the rate of interest per annum shall be as specified in column (3) of the Table given below for the period mentioned therein, for the class of registered persons mentioned in the corresponding entry in column (2) of the said Table, who are required to furnish the returns in FORM GSTR-3B, but fail to furnish the said return along with payment of tax for the months mentioned in the corresponding entry in column (4) of the said Table by the due date, namely:--

Table

S. No. (1)	Class of registered persons (2)	Rate of interest (3)	Tax period (4)
1.	Taxpayers having an aggregate turnover of more than ₹ 5 crores in the preceding financial year	‘Nil’ for first 15 days from the due date, and 9% thereafter till 24.06.2020	February, 2020, March 2020, April, 2020
2.	Taxpayers having an aggregate turnover of up to ₹ 5 crores in the preceding financial year, whose principal place of business is in the States of Chhattisgarh, Madhya Pradesh, Gujarat, Maharashtra, Karnataka, Goa, Kerala, Tamil Nadu, Telangana or Andhra Pradesh or the Union territories of Daman and Diu and Dadra and Nagar Haveli, Puducherry, Andaman and Nicobar Islands and Lakshadweep	‘Nil’ till the 30.06.2020, and 9 % thereafter till the 30.09.2020	February, 2020
		‘Nil’ till the 03.07.2020, and 9 % thereafter till the 30.09.2020	March, 2020
		‘Nil’ till the 06.07.2020, and 9 % thereafter till the 30.09.2020	April, 2020
		‘Nil’ till the 12.09.2020, and 9 % thereafter till the 30.09.2020.	May, 2020
		‘Nil’ till the 23.09.2020, and 9 % thereafter till the 30.09.2020.	June, 2020
		‘Nil’ till the 27.09.2020, and 9 % thereafter till the 30.09.2020	July, 2020
3.	Taxpayers having an aggregate turnover of up to ₹ 5 crores in the preceding financial year, whose principal place of business is in the States of Himachal Pradesh, Punjab, Uttarakhand, Haryana, Rajasthan, Uttar Pradesh, Bihar, Sikkim, Arunachal Pradesh, Nagaland, Manipur, Mizoram, Tripura, Meghalaya, Assam, West Bengal, Jharkhand or Odisha or the Union territories of Jammu and Kashmir, Ladakh, Chandigarh and Delhi	‘Nil’ till the 30.06.2020, and 9 % thereafter till the 30.09.2020.	February, 2020
		‘Nil’ till the 05.07.2020, and 9 % thereafter till the 30.09.2020.	March, 2020
		‘Nil’ till the 09.07.2020, and 9 % thereafter till the 30.09.2020.	April, 2020
		‘Nil’ till the 15.09.2020, and 9 % thereafter till the 30.09.2020.	May, 2020
		‘Nil’ till the 25.09.2020, and 9 % thereafter till the 30.09.2020.	June, 2020
		‘Nil’ till the 29.09.2020, and 9 % thereafter till the 30.09.2020	July, 2020

 After the specified date, normal rate of interest i.e. 18% per annum shall be charged for any further period of delay in furnishing of the returns as clarified by the circular dated 24.06.2020.      

This notification shall come into force from the 01.07.2017.

The calculation of interest in respect of this class of registered persons for delayed filing of return for the month of March, 2020 (due date of filing being 20.04.2020) is as illustrated in the Tables below- (as clarified vide Circular No. 141/11/2020-GST, dated 24.06.2020)

Table – For for taxpayers having aggregate turnover above ₹ 5 Cr.

Sl. No.	Date of filing GSTR-3B	No. of days of delay	Interest
1	02.05.2020	12	Zero interest
2	20.05.2020	30	Zero interest for 15 days, thereafter interest rate @9% p.a. for 15 days
3	20.06.2020	61	Zero interest for 15 days, thereafter interest rate @9% p.a. for 46 days
4	24.06.2020	65	Zero interest for 15 days, thereafter interest rate @9% p.a. for 50 days
5	30.06.2020	71	Zero interest for 15 days, thereafter interest rate @9% p.a. for 50 days and interest rate @18% p.a. for 6 days

Table - For for taxpayers having aggregate turnover below ₹ 5 Cr.

S. No.	Tax period	Applicable rate of interest	Date of filing GSTR-3B	No. of days of delay	Interest
1	March, 2020	‘Nil’ till the 03.07.2020 and 9 % thereafter till the 30.09.2020	22.06.2020	61	Zero interest
2			22.09.2020	153	Zero interest for 72 days, thereafter interest rate @9% p.a. for 81 days
4			22.10.2020	183	Zero interest for 72 days, thereafter interest rate @9% p.a. for 89 days and interest rate @18% p.a. for 22 days
4	June, 2020	‘Nil’ till the 23.09.2020, and 9 % till the 30.09.2020	28.08.2020	37	Zero interest
5			28.09.2020	68	Zero interest for 63 days, thereafter interest rate @9% p.a. for 5 days
6			28.10.2020	98	Zero interest for 63 days, thereafter interest rate @9% p.a. for 7 days and interest rate @18% p.a. for 28 days

Notification No. 52/2020-Central Tax

Vide Notification No. 76/2018-Central Tax, dated 31.12.2018 the Central Government waived the amount of late fee payable by any registered person for failure to furnish the return in FORM GSTR-3B for the taxpayers having aggregate turnover below ₹ 5 Crore.

In the said notification the Central Government provides the list of class of registered persons for the waival of late fee subject to conditions mentioned in the table furnished in the said notification.

Vide Notification No. 52/2020-Central Tax, dated 24.06.2020, the Central Government substituted the said table by the table below and also provided two provisos-

Table

S. No. (1)	Class of registered persons (2)	Tax period (3)	Condition (4)
1.	Taxpayers having an aggregate turnover of more than ₹ 5 crores in the preceding financial year	February, 2020, March, 2020 and April, 2020	If return in FORM GSTR-3B is furnished on or before the 24.06.2020.
2.	Taxpayers having an aggregate turnover of up to ₹ 5 crores in the preceding financial year, whose principal place of business is in the States of Chhattisgarh, Madhya Pradesh, Gujarat, Maharashtra, Karnataka, Goa, Kerala, Tamil Nadu, Telangana or Andhra Pradesh or the Union territories of Daman and Diu and Dadra and Nagar Haveli, Puducherry, Andaman and Nicobar Islands and Lakshadweep	February, 2020	If return in FORM GSTR-3B is furnished on or before the 30.06.2020.
		March, 2020	If return in FORM GSTR-3B is furnished on or before the 03.07.2020.
		April, 2020	If return in FORM GSTR-3B is furnished on or before the 06.07.2020.
		May, 2020	If return in FORM GSTR-3B is furnished on or before the 12.09.2020
		June, 2020	If return in FORM GSTR-3B is furnished on or before the 23.09.2020.
		July, 2020	If return in FORM GSTR-3B is furnished on or before the 27.09.2020.
3.	Taxpayers having an aggregate turnover of up to ₹ 5 crores in the preceding financial year, whose principal place of business is in the States of Himachal Pradesh, Punjab, Uttarakhand, Haryana, Rajasthan, Uttar Pradesh, Bihar, Sikkim, Arunachal Pradesh, Nagaland, Manipur, Mizoram, Tripura, Meghalaya, Assam, West Bengal, Jharkhand or Odisha or the Union territories of Jammu and Kashmir, Ladakh, Chandigarh and Delhi	February, 2020	If return in FORM GSTR-3B is furnished on or before the 30.06.2020.
		March, 2020	If return in FORM GSTR-3B is furnished on or before the 05.07.2020.
		April, 2020	If return in FORM GSTR-3B is furnished on or before the 09.07.2020.
		May, 2020	If return in FORM GSTR-3B is furnished on or before the 15.09.2020.
		June, 2020	If return in FORM GSTR-3B is furnished on or before the 25.09.2020.
		July, 2020	If return in FORM GSTR-3B is furnished on or before the 29.09.2020.

 Provided also that the total amount of late fee payable for a tax period, under section 47 of the said Act shall stand waived which is in excess of an amount of ₹ 250/- for the registered person who failed to furnish the return in FORM GSTR-3B for the months of July, 2017 to January, 2020, by the due date but furnishes the said return between the period from 01.07.2020 to 30.09.2020:

Provided also that where the total amount of central tax payable in the said return is nil, the total amount of late fee payable for a tax period, under section 47 of the said Act shall stand waived for the registered person who failed to furnish the return in FORM GSTR-3B for the months of July, 2017 to January, 2020, by the due date but furnishes the said return between the period from 01.07.2020 to 30.09.2020.

 In case the returns in FORM GSTR3B for the said months are not furnished on or before the dates specified in the said notification, then late fee shall be payable from the due date of return, till the date on which the return is filed, as clarified vide Circular No. 141/11/2020-GST, dated 24.06.2020.

Notification No. 53/2020-Central Tax

Vide Notification No. 04/2018-Central Tax, dated 23.01.2018, the Central Government waived the late fee for any registered person for failure to furnish the details of outward supplies for any month/quarter in FORM GSTR-1 by the due date under section 47 of the Act.  Vide third proviso to this notification the Central Government waived the late fee for the registered persons who failed to furnish the details of outward supplies in FORM GSTR-1 for the months/quarters from July, 2017 to November, 2019 by the due date but furnishes the said details in FORM GSTR-1 between the period from 19th December, 2019 to 17th January, 2020.

Notification No. 53/2020-Central Tax substituted the third proviso to Notification No. 04/2018.  The substituted third proviso provides that  the amount of late fee payable under section 47 of the said Act shall stand waived for the registered persons who fail to furnish the details of outward supplies for the months or quarter mentioned in column (2) of the Table below in FORM GSTR-1 by the due date, but furnishes the said details on or before the dates mentioned in column (3) of the said Table:-

Table

Sl. No. (1)	Month/ Quarter (2)	Dates (3)
1.	March, 2020	10th day of July, 2020
2.	April, 2020	24th day of July, 2020
3.	May, 2020	28th day of July, 2020
4.	June, 2020	05th day of August, 2020
5.	January to March, 2020	17th day of July, 2020
6.	April to June, 2020	03rd day of August, 2020.

Notification No. 54/2020-Central Tax

Notification No. 54/2020-Central Tax, dated 24.06.2020 added sixth and seventh proviso to Notification No. 29/2020-Central Tax, dated 23.03.2020.  Through the proviso the Central Government specified the last date for filing GSTR – 3B for the month of August 2020.  The newly inserted two provisos read as below-

Provided also that, for taxpayers having an aggregate turnover of up to ₹ 5crore  in the previous financial year, whose principal place of business is in the States of Chhattisgarh, Madhya Pradesh, Gujarat, Maharashtra, Karnataka, Goa, Kerala, Tamil Nadu, Telangana, Andhra Pradesh, the Union territories of Daman and Diu and Dadra and Nagar Haveli, Puducherry, Andaman and Nicobar Islands or Lakshadweep, the return in FORM GSTR-3B of the said rules for the month of August, 2020 shall be furnished electronically through the common portal, on or before the 01.10.2020.

Provided also that, for taxpayers having an aggregate turnover of up to ₹ 5  crore in the previous financial year, whose principal place of business is in the States of Himachal Pradesh, Punjab, Uttarakhand, Haryana, Rajasthan, Uttar Pradesh, Bihar, Sikkim, Arunachal Pradesh, Nagaland, Manipur, Mizoram, Tripura, Meghalaya, Assam, West Bengal, Jharkhand or Odisha, the Union territories of Jammu and Kashmir, Ladakh, Chandigarh or Delhi, the return in FORM GSTR-3B of the said rules for the month of August, 2020 shall be furnished electronically through the common portal, on or before the 03.10.2020.

Instruction No. 3/2/2020-GST

With effect from 01.04.2019, the construction of affordable residential apartments attracts GST at the rate of 1% [without ITC] and other residential apartments attract GST at the rate of 5% [without ITC].  One of the condition is that at least 80% of value of input and input services, [other than services by way of grant of development rights, long term lease of land or FSI, electricity, high speed diesel, motor spirit, natural gas], used in supplying the construction service, shall be received by the promoter/developer from registered supplier only.    In case of shortfall from the said threshold of 80 per cent., the promoter/developer shall pay the tax on the value of input and input services comprising such shortfall.  Accordingly for FY 2019-20, tax on such shortfall is to be paid by the 30th June, 2020.

Requests have been received seeking details of prescribed form on which the said tax amount has to be reported.  It has been instructed that person required to pay tax in accordance with the said notification on the shortfall from threshold requirement of procuring input and input services (below 80%) from registered person shall use the form DRC-03 to pay the tax electronically on the common portal within the prescribed period.