40th gst council meeting update

Updated on March 15th, 2023

The 40th GST Council Meeting was held in New Delhi under the chairmanship of Honorable Finance Minister Nirmala Sitharaman, through video conference & comprised of the counterparts form the States & UTs

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The 40th GST Council Meeting has made the following recommendations on Law & Procedures changes- June 12th, 2020


Relief for Small Businesses- For all Businesses having an aggregate turnover of less than Rs. 5 Crores, do not have to pay any late fees for furnishing the GST Returns for the Months- February, March & April till 6th July. And then at a rate of 9% per annum till September 30th, 2020


Further Relief for Small Businesses- For Businesses that are affected by the pandemic & could not furnish their GSTR-3B for the months of- May, June & July will get a waiver of any late fees & interest if the Returns are filed by September 2020.


Late Fees Applicable on non-filing of GSTR-3B in the period July 2017 till January 2020-
No Late fees for Taxpayers having Nil Returns (no transactions but required to file GSTR-3B)
Late Fees of Maximum Rs. 500/- per return if there was any Tax Liability


Extension of seeking revocation of cancellation of registration- This measure has been taken for taxpayers who did not get to restore their canceled GST Registration. Such Taxpayers have the opportunity to revoke their cancelations up to September 30th, 2020. In all the cases where the GST registration has been canceled till date (June 12th, 2020).


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


Just as anticipated the 40th GST Council has discussed the major points in the Meeting.

GSTR-3B Late fees have been waived off for Nil Returns & capped at Rs. 500 per return for returns having tax liabilities.

The Finance Minister also mentioned the State Compensation issues, where the states must be paid compensation due to the downfall in GST collection in the past three months.

For this purpose, the idea was to borrow the money from the market. However, the Finance Minister mentioned that if any such need arises the Council will have a separate single agenda Meeting in July for the same & discuss what is to be done & how.

Decisions in favor of Small Businesses having annual aggregate turnover of less than Rs. 5 Crores have been made regarding late fees on GST return Filing.

The Inverted Duty issues were also discussed in the 40th GST Council Meeting, although no specific decision was made & the issue was postponed for a later date.

The Council & Mrs. Sitharaman were firmly against the increasing of Tax rates as it could have ill effects on the National Economy for the longer run.

Overall the 40th GST Council discussed all the predicted & most important issues in the Meeting. The most salient thing in the current situation was helping the taxpayers & Businesses in any way possible & the meeting succeeded in the agenda.

Pre-analyzed Predictions by GSTHero - June 10th, 2020 

1. Implementation of Calamity Cess under GST

There may be the implementation of a Calamity Cess under GST considering the current situations including the Pandemic & the number of natural disasters to recover Government Revenue to some extent.

The Government may or may not be in favor of this decision looking at the over economic & financial stats of the Country.

2. Increase in GST Rates of non-essential goods

There may be a decision to increase the GST Rates on non-essential goods to enhance the Revenue generation.

However, the Government may not be in favor of this decision as it may reduce the demand due to increased GST since the lockdown has already caused losses to the public as well as the Businesses.

3. Relaxation on 180 Days ITC Reversal Rule

Businesses can expect some relaxation in the Input Tax Credit reversal rule, as due to the COVID-19 outbreak there has been lockdown all over the nation that has brought businesses to a lower ground.

Due to the Fact that Businesses are facing losses & downfalls, they may hold their outward expenses, which is only fair. To this, the ITC reversal rule on non-payment of invoices within 180 days may be pulled down by the Government.

4. Due dates extension of GST Return Filing

A decision in favor of the Businesses may be taken by the Government in the 40th GST Council Meeting.

Considering the lockdown, the Government has already provided compensations & relaxations to the Businesses by waiving of the penalties & late fees and Extending the Due Dates of GST Return Filing.

It is expected that the due dates for GST Return filing can be extended even further in this GST Council Meeting.

5. GSTR-3B Late Fees Waiver

CBIC wrote in one of their tweets that this may be a topic of discussion in the 40th GST Council Meeting.

Several Businesses have demanded that the late fees on late filing of GSTR-3B should be waived off.

Due to lockdown, the smooth running of businesses has been hampered severely.

Unavailability of staff & adequate resources businesses were unable to file their GSTR-3B for multiple tax periods increasing the late fees to a high extent.

Looking at the losses that businesses are bearing already, their demand for the waiver of the late fee makes sense.

The 40th GST Council Meeting can discuss the topic & may have some decisions in favor of Business Interests.

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