37th GST Council Meeting (September 2019) – Key Highlights

GSTR 9, 9A Annual Return filing made optional

For FY 2017-18 and 2018-19, GSTR 9 return filing has been made optional for businesses having aggregate turnover up to INR 2 crores. Further, filing of GSTR 9A for composition taxpayers has been waived for the above mentioned period.

This decision is welcomed by small taxpayers who do not maintain proper books of accounts and were having difficulty in bifurcating total input tax credit into various heads.

However, no relief is provided for businesses having a turnover of more than INR 2 crores. For such taxpayers, filing of GSTR 9 and GSTR 9C is mandatory.

Also, a Committee of Officers will be constituted for simplification of annual returns and reconciliation statements i.e. GSTR 9, GSTR 9A and GSTR 9C.

Restriction on claiming input tax credit

Where a taxpayer fails to report outward supplies i.e. file GSTR 1, there shall be restrictions on claiming input tax credit for the said period.

This decision has been made with view to make GSTR 1 return filing timely and compulsory. At present, no penalty is imposed on the delayed filing of GSTR 1.

Delay in implementation of New Return System

New return system consisting of Form GST ANX 1, Form GST ANX 2 and Form GST Ret 1/ 2/ 3 will now be implemented from 1st April, 2020. The earlier proposed date was 1st October 2019.

This delay gives taxpayers an opportunity to understand and familiarize with the new return system using the trial version available on GST portal. This extended trial period will make it easier for taxpayers to adapt to the new return system when it is actually implemented.

Until the new return system is implemented, taxpayers shall continue file Form GSTR 3B and Form GSTR 1 till March, 2020.

Mandatory Aadhar linking 

Linking of Aadhar for GST registration to be mandatory.
Possibility of making Aadhar mandatory for claiming refunds.

Refunds

Integrated refund system with disbursal by the single authority to be introduced from 24th September 2019

Circulars to be issued for uniformity in claiming refund process under GST, eligibility to file a refund application and clarification regarding the supply of Information Technology enabled Services across all jurisdictions.

Others

An extension for filing appeals to GST Appellate Tribunal against the orders of Appellate - Authority has been made as the Appellate Tribunals are not yet functional. Circular in respect of post sales discount has been rescinded.

Reasonable restrictions on passing credit to risky taxpayers including new taxpayers shall be prescribed. This decision is made with view to handle the issue of fake invoices and fraudulent refund claims.

Change in GST Tariff rates

A. Hospitality and tourism

GST rate on outdoor catering without accommodation and accommodation with tariffs up to Rs. 7500 reduced to 5% without Input Tax Credit.

In case there is accommodation and the tariff rate exceeds Rs 7500, GST rate shall remain @ 18% with ITC.

This tariff rate cut has been introduced with the view to promote tourism.

B. Job work service-

For job work services on the diamond, GST rate reduced from 5% to 1.5%

GST rate on supply of machine job works such as in the engineering industry, reduced from 18% to 12 %. However, job work on bus body building shall continue to remain taxable at 18%.

C. Warehousing

Warehousing or storage services provided for storing of cereals, pulses, fruits, nuts and vegetables, spices, copra, sugarcane, jaggery, raw vegetable fibres such as cotton, flax, jute, etc., indigo, unmanufactured tobacco, betel leaves, tendu leaves, rice, coffee and tea shall be exempted.

These changes shall be applicable from 1st October 2019.