TaxTMI 
TaxTMI 
TaxTMI 
Minutes of the 40th GST Council Meeting held on 12th June, 2020
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....n of cancellation of registration iii. Notification of provisions of the Finance Act, 2020 amending various sections of the CGST Act and the IGST Act iv. Reduction of late fees and rate of interest for small taxpayers (taxpayers with aggregate turnover up to Rs. 5 crore) for the tax period May, 2020, June, 2020 and July, 2020 v. Reduction in rate of interest for delay in payment of GST for remaining part of Financial Year 2020-21 vi. Reduction in late fees for FORM GSTR-3B for months from July, 2017 to January, 2020 - One time amnesty to clean up pendency in return filing in GST regime 4. Deemed ratification by the GST Council of Notifications, Circulars and Orders issued by the Central Government 5. Decisions of the GST Implementation Committee (GIC) for information of the Council 6. Decisions/Recommendations of the IT Grievance Redressal Committee for information of the Council 7. Creation of State and Area Benches of the Goods and Services Tax Appellate Tribunal (GSTAT) for the State of Uttar Pradesh 8. Quarterly Report of the National Anti-Profiteering Authority (NAA) for the quarter January to March 2020 for the information of the GST Council 9. Constitutio....
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....Council meeting) with the following version: "The Hon'ble Deputy Chief Minister of Gujarat requested that there is need for amendment in the Central Sales Tax Act, 1956. Letter containing detailed note for amendment in the relevant section of the CST Act is already sent to the Govt. of India. Wrong use of C-Forms is causing loss of CST revenue to many states. Other states have also agreed to prevent wrong use of C-FORM and therefore, the Central Government should bring amendment immediately. If need be, the matter may be discussed in the Council meeting." iii. The State of Puducherry suggested that in paragraph 13.9, the statement (Commissioner, State tax, Puducherry mentioned that this was debated in the Officer's Meeting on 13.03.2020 and this debate is resulting in delaying the decision and cases are piling up) with the following version: "Chief Commissioner, State tax, Gujarat mentioned that this was debated in the Officer's Meeting on 13.03.2020 and this debate is resulting in delaying the decision and cases are piling up." 4.1 The Hon'ble Minister, Commercial Tax from Chhattisgarh requested that his name in paragraph 4.23 had been wrongly mentioned (Shri K.P. Singh Deo) an....
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....ow Rs. 5 crore limit, the additional tax recovered from each tax payer was Rs. 13,000 per tax payer whereas the compliance cost was appx. Rs. 50,000) "Tamil Nadu had supported and welcomed the ameliorative measures taken for ease of doing business by enhancing the turnover limit upto Rs. 5 crore for filing annual returns in Form GSTR-9 and reconciliation statement in Form GSTR-9C. iii. In paragraph 13.9, to add after the sentence (There can also be a senior lawyer who can be designated as a judicial member) "Tamil Nadu expressed strong reservations against the proposed amendments to sections 109 and 110 of the CGST Act with reference to the appointment of technical members in the GST Tribunals. These amendments seek to replace two technical members by one, leaving the option to choose a Central Technical member or State Technical Member to the Government of India. Tamil Nadu was of the view that the National Bench of the Appellate Tribunal and its Regional Benches may consist of Judicial Member and a Technical Member (Central) and in State Bench of the Appellate Tribunal and its Area Benches must consist of Judicial member and a Technical member (State)." iv. In paragraph 10.9 ....
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....mount or on the gross gaming revenue as has always been done in the pre GST era. This was for the reason that casinos in Goa were on the verge of closure. That they were a very important source of revenue for the State and that Law and Fitment Committees had decided the issue and that the issue could be brought directly to the GST Council. On being informed by the Joint Secretary, GST Council Secretariat that this issue was minuted in the 38th GST Council meeting, the Hon'ble Chairperson instructed that an addendum to this effect in respect of the same may be issued. 4.6 The Hon'ble Member from Madhya Pradesh stated that they were grateful that the State had been given Rs. 1,386 crore as compensation and the borrowing limit had also been raised from 3% to 5% of Gross State Domestic Product (GSDP). He, however, requested that conditionalities attached to the raising of the borrowing limit may be relaxed. He further stated that lie was looking after the departments of Home and Health and during his meeting with industrialists he had learnt that medical equipment used in the fight against COVID attracted GST and had not been given any benefits/exemption. He further stated that builde....
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....sues Agenda wise as procedural issues do not take much time to discuss. The Hon'ble member from Jharkhand expressed his gratitude to Hon'ble Chairperson for having released compensation for the period till February 2020. However, they were in dire need for compensation for the subsequent months of March May 2020. He further stated that he supported the Hon'ble Member from West Bengal and Puducherry and that compensation and revenue should be discussed. 4.9. The Secretary requested that before the Council take up Agenda Item 2, the minutes may be confirmed. 5. For Agenda item 1, the Council approved the Minutes of the 39th GST Council meeting with the following changes: 5.1. To correct the name of the Hon'ble Minister in paragraph 4.23 of the Minutes from 'Shri K.P. Singh Deo' to 'Shri T.S. Singh Deo'. 5.2. To add the following paragraph after paragraph 6 of the Minutes, "6A, The Hon'ble Minister from Goa reminded the Hon'ble Chairperson that the draft Minutes of the 39th GST Council meeting did not reflect that it was agreed to instruct the GST Intelligence Unit, Hyderabad not to initiate action against the casinos in the State of Goa till it was decided whether GST was require....
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....demands on that ground. He also suggested that the distinction between branded and unbranded food grains should be completely done away with as most taxpayers have switched to unbranded category by filing affidavits and consequently the loss to exchequer on account of removal of the distinction will not be much. He also urged the Hon'ble Chairperson to kindly consider the remaining representations forwarded to the Council or the grounds of rationalization of tax, items of essential use by common man, items for the benefit of farmers and fishermen, items made by small artisans and items relating to religious sentiments at the earliest." 5.6. To replace the sentence 'The Hon'ble Member from Odisha further stated that the 18% GST on job work will not impact the price of liquor because this depends upon the relationship between the brand owner and the contract bottling unit' in paragraph 11.8 of the Minutes with "The Hon'ble Member from Odisha further stated that the 18% GST on service of job work will not impact the price of liquor because this depends upon the relationship between the brand owner and the contract bottling unit." 5.7. To add in paragraph 13.3 of the Minutes, after t....
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....nd for the two months of April and May 2020-21. He highlighted that in the last financial year the total GST collections were Rs. 12,22,1 16 crore as against which Rs. 94,323 erore gross revenue have been collected in the first two months of the current fiscal. Then, he explained the collections under IGST and its apportionment/settlement as shown in Table 2 of the Agenda Note. It was explained that the amount collected under IGST in the first two months of the current fiscal was about Rs. 52,732 crore of which Rs. 11,334 was refunded. Of the remaining, Rs. 22,766 crore was apportioned/settled between the Centre and all the States/UTs through the normal settlement route due to return filing. It was witnessed in the past few months there was no need to do any ad hoc settlement because of change in the rules of cross utilization of lGST credit. But in the months of April'20-May'20 a net balance of Rs. 18,632 crore was present mainly because the returns were deferred especially for smaller tax payers who are at the end of the value add chain. Therefore some lGST would have been paid but the credit would not have been taken since the tax payers are yet to file their returns. As and whe....
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....tes. Remaining Rs. 88,000 crore shall be apportioned to the States and consequently the compensation which was released in 2017-18 would become excess and a part of it, depending on recalculations, has to be reversed. Because there are four legs to these transactions, some of them are releases to States and some of them are reversal of releases to States done previously and it has to and fro releases of funds, this transaction was broken into two parts. One having no net cash outgo and other will have cash outgo. It needs to be appreciated that while the amount pertaining to a, b and c above are settlements between both Consolidated Funds of Centre and States the reversal compensation at d above will be credited to the Compensation Fund. It will not go to the Consolidated Fund of India because it was released from Compensation Fund. As a result, the transaction has been split up into two parts. The first leg of the transaction having no cash implication has been carried out in the month of May 2020 and the net implication has been effected to by transferring Rs. 33,412 crore from CFI to Compensation Fund in the month of May 2020. This amount was used to release compensation due fro....
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....ts from the Hon'ble Members of the Council. The Hon'ble Deputy Chief Minister of Delhi stated that he was glad that the issue which concerned the Union Territories of Delhi and Puducherry the most i.e. apportionment of balance IGST lying in 2017-18 had finally been discussed in paragraph 6 of the Agenda Note. He stated that, on behalf of Delhi & Puducherry, this issue has been raised repeatedly, even in personal meetings with the Hon'ble Union Finance Minister and in the GST Council as well. Both the UTs with legislatures were the prime losers in the devolution because they were not covered by the Finance Commission grant and, therefore, did not get any money as a result of adoption of this mode of settlement. He stated that the Agenda laid down the process involved in the reversal of IGST balance of Rs. 1.76 lakh crore during 2017-18. While the Government of India had released Rs. 33,412 crore from the Consolidated Fund of India to the Compensation Fund, the remaining part of the reversal had been left to be decided by deliberations in the Group of Ministers (GoM) constituted for this subject matter. The Hon'ble Member said that he had been raising this issue in the various GST Co....
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....ill be resolved. Puducherry and Delhi are considered to be States under the GST Act. Therefore, both are entitled to compensation like other States. Sometimes, the apportionment will also be done. Looking into the situation, after considering the compensation that has been made, if any moneys are due to Puducherry and Delhi, it may be given. In case, the payments were excess, definetely they would have to reverse. Therefore, a final call has to be taken on this. 6.6 The Hon'ble Minister from Tamil Nadu stated that he wished to bring the long pending issue of IGST settlement for the year 2017-18 to kind attention of the Council. The Group of Ministers constituted for the purpose of examining the issue of IGST settlement had convened a meeting on 18.01.2020. No decision had yet been taken to release the pending accumulated lGST for the year 2017-2018 amounting to Rs. 4,073 crore to the State of Tamil Nadu. He also requested the GoM to work out a regular system of apportioning the surplus in the IGST account among the States and Union Territories in accordance with the principles laid in section 17(2) of the lGST Act. He also urged the Hon'ble chairperson to make early release of pen....
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....tatement of Hon'ble Minister from West Bengal, he stated that out of Rs. 88,000 crore of CGST revenue, the States would get 42% out of which is around Rs. 36,000 crore. Already Rs. 33,000 crore was disbursed which means that only Rs. 3,000 crore remain. The Hon'ble Deputy Chief Minister then underscored the fact that out of the 92 lakh odd dealers during 2017-18 about 46 lath odd dealers had filed their annual returns. Regarding the reconciliation statement out of 12,42,000, already 10,00,00 have filed their reconciliation statements. He urged for detailed scrutiny of the big tax payers among the 46 lakh dealers who tiled their returns. He requested that instead of ad hoe settlement, even for 2017-18 it will be better if the Council goes for final settlement for year 2017-18 He is chairing a GoM on IGST settlement but due to Corona pandemic, he could not hold the meetings but he assured that he will hold a meeting soon regarding the 2017-18 IGST settlement. He urged the officials that the entire data of 2017-18 should be scrutinized thoroughly, analyze the entire data and examine from every angle to be placed before the GoM. It is a complicated process since there is reversal adjus....
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....ect effect on the finances of the States. He requested that this matter may be referred to a GoM which can have the detailed calculations. The reversal of' money should not he conducted in one go or in a harsh manner. The GoM should also discuss how the reversal should take place keeping in view the COVID situation and State finances. Ultimately, the capacity of the State to reverse is important and whatever is due to the States, the formula of 50:50 for State and Centre and devolution of 42% from Central pool to States should be strictly followed. Once all the figures are clear, the States will be in a better position to look into the matter and therefore should not be rushed through. 6.12. The Hon'ble Minister from Punjab stated that this issue which had been raised by Hon'ble Finance Minister of West Bengal was initially flagged off in the 37th GST Council Meeting at Goa by State of Punjab. The Hon'ble Union Finance Minister kindly consented to look into this entire matter and subsequently the GoM was constituted chaired by Hon'ble Dy. CM of Bihar but it is yet to be resolved. He saw this in State of Punjab as well that because of the CO VID epidemic, apart from the Health depa....
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....d. There are no sources of money. Goa have not received any compensation since March (it is about Rs. 743 crore, had they received that amount, they would have been in a better position), Goa now is landing into a debt trap. To prevent this he requested that smaller States are to be looked at differently; ultimately, funds are going to be devolved. The Hon'ble Union Finance Minister was kind enough to give it as per the requisite formula, irrespective of whether they are big, medium or small. If there was a formula wherein it involves only a few hundred crores, if devolved earlier, the smaller States will not land into debt traps which will be difficult to get out because of the very reason that they are small. For example, for Goa, mining and tourism are closed, they have no source of funds and therefore they have to look towards the Centre only, At least what is due to them being smaller States, the smaller amounts can be given to them earlier than the bigger States where the amounts are big which are rightly due to them which they also require. Cry of smaller States is like the cry of a small baby and therefore they should be heard first. His humble plea was that if they had giv....
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....om West Bengal stated that he would like to correct his earlier figures since he was looking through the tables once again. Out of Rs. 1.76 lakh crore, 42% devolution translates to Rs. 73,920 crores which the States have got. He requested that for better understanding it was necessary that the officials concerned presented a matrix to the Council showing all the details of this transaction. States did get 42% because of the devolution which was Rs. 73,920, now the question is by what matrix this devolution happened since there may be some corrections that may be required and requested that some light may be thrown on the remaining quantum which needs to be given to the States. Some States will gain more and some States will gain less because of Finance Commission's formula and some corrections may have to be made. He requested Joint Secretary. Department of Revenue for the matrix used and details of the amount still remaining. He also pointed out that Table 3 of the Agenda needed a bit of correction since balance quanta carried over are not present. He agreed with Dy. CM of Bihar that the balance as of now is Rs. 8,013 crores and some more balance maybe accumulated. His understandi....
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....two and half months of Iockdown paralyzed the economy of the State. Ile once again requested that ways and means have to be found out to distribute compensation to the States timely He further highlighted that as the return filing has been deferred, the apportionment of IGST could not be done and that is also one reason why they are unable to claim compensation. Therefore, GST Council needs to think and come up with a solution for this. 6.21 The Hon'ble Chairperson then asked Joint Secretary, Department of Revenue to respond to the queries/observations of the Hon'ble Members. Joint Secretary, Department of Revenue, stated that he would explain the broad number to the Council and table the detailed numbers before the GoM. As Hon'ble Minister from West Bengal had pointed out, States had actually received around Rs. 68,000 crores of devolution in 2017-18 which has to be reversed, and Rs. 88,000 crores should be settled to States as SGST portion. They will also get an additional Rs. 37,000 crores of Rs. 88,000 crores which the Centre gets from Rs. 1.76 lakh crore. Since the States get Rs. 88,000 crores of SGST, Rs. 46,000 crores worth compensation has to be reversed. The net impact of....
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..... 3,400 crores that Delhi was supposed to get will be transferred in the next leg of the transaction since it is a cash transaction. Hon'ble Dy. CM of Delhi requested that since they are short of funds, this process may be expedited. The Secretary to the Council stated GoM under the Chairmanship of Dy.CM of Bihar would be requested to expedite this and as few Hon'ble Ministers requested, the full matrix of devolution to States, the formulae utilized, the amount of credit and debit transactions that should happen as per the four legs mentioned earlier will be placed before the GoM and full settlement will be done. He further stated that the detailed exercise would have to be carried out to work out the reversal by the States and the additionalities that are required to be given to them. Hon'ble Dy. CM of Delhi submitted that detailed calculations based on the matrix and tabling the figures before the GoM might take time. Meanwhile, since the case of Delhi is clear cut, after adjusting Rs. 326 crore compensation, Rs. 3,400 may be transferred to Delhi for which GoM is not required 6.22 The Hon'ble Member from Karnataka stated that once the matrix has been prepared by the officials an....
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.... passage of GST law was that the Council should borrow and pay. He, therefore, urged that GST Council should borrow to pay compensation to the States and recoup the money by extending the period of compensation cess. He requested that this may be discussed and a decision taken since this is very important. Every Finance Minister has stressed the dire situation of State finances. The condition is going to accentuate in the coming months and therefore, this issue must be placed on the table and be discussed. 7. For the Agenda item 2, the Council took note of the same and the suggestions made by the Hon'ble Members. Agenda Item 3: Issues recommended by the Law Committee for the consideration of the GST Council 8.1 The Finance Secretary invited Shri Manish Kumar Sinha, Joint Secretary, TRU-Il to take up the Agenda Item No. 3 8.2 The Joint Secretary, TRU-Il (JS, TRU-Il) initiated the discussion with a presentation (Annexure 3) by stating that some of the Agenda Items are technical in nature, and that he will mention the same and seek approval of the Council. Introducing Agenda Item 3(i) relating to amendment in CGST Rules to prescribe the rates for Composition Scheme under Section....
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....the appointed day i.e. till 30.06.2020 and after 30.06.2020, these powers will come to an end. He stated that therefore, the proposal was to notify Sections 130 and 134 of Finance Act 2020 to come into force on 30.06.2020 so that powers will be available for 5 years i.e. till 30.06.2022. Power was needed for five years as it was also co-terminus with the period for which Centre had to pay compensation. He further stated that Sections 118, 125, 129 of the Finance Act, 2020 may also be given effect on 30.06.2020. As this was having no pari materia impact on SGST Acts, he stated that this portion of the agenda was of technical nature and be taken note of and approved, to which the Council agreed. 8.8. The Hon'ble Minister from Tamil Nadu submitted that with regard to amendment of State GST Act with reference to Finance Act No.12 of 2020, they wished to state that as the State legislature was not in session, they would issue the same by promulgating an Ordinance early. 8.9. On the second part of this Agenda he stated that there was a need to prescribe a process so that the recommendations of the Council requiring law amendment were implemented from a given date or within certain time....
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....rge with late fee and the waiver of 15 day interest and late fee shall not be available. H requested that view may please be taken as to whether to allow some soft landing to these taxpayers who are not able to avail the relief granted as per the conditions of the package. He put forth the following options pertaining to the issue: A. Allow the scheme to continue the way it was decided, without allowing any further soft landing. B. Extend the reduced rate of interest at 9% till the date of tiling of return with full late fee. C. Extend the reduced rate of interest at 9% till the date of filing of return with n late fee. He further stated that this is one decision point; the second decision point is whether this soft landing should be given to all the taxpayers or to the small taxpayers only. 8.13. The Hon'ble Deputy CM, Delhi said that he was of opinion that it was good to be as soft lenient with the taxpayers as possible but two important factors needed consideration. First, revenue position of the States where salaries had to be paid and medical expenses to be met. Second, was to understand GST was not direct tax as income tax, where one is earning Rs. 1oo and had to give....
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....dering all the factors. 8.16. Hon'ble Finance Minister, West Bengal stated that return filing proposal is a good one as now internet is working though not perfectly but working. Some offices have also opened. So the first question is, should they be asked to file returns for past months, he thought it was quite reasonable as it will kick start the process. Second was the interest rate they should pay? Proposal was to reduce it from 18% to 9% or no interest at all? He thought as this was a force majeure that the taxpayers couldn't file the returns as entire nation went into lockdown so they could discuss whether to charge interest or not. At this time, the important thing was to promote the return filing so that taxes can come. Finally, on the penalty, he was of the opinion that penalty shouldn't be there because it was a force majeure with no fault of the taxpayer. He added that they should be as liberal as possible so that the tax starts coming which was the point made by Delhi as also Bihar. Further he added that he was not in favour of punishing the taxpayers by charging penal interest for not being able to file the returns when entire nation went into lockdown. He submitted th....
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....iven only to the small taxpayers not to the big taxpayers as, if we start giving relaxation to big taxpayers also then there will be a major revenue loss. Third, on penalty he was of the opinion that it should be reduced because such epidemic was unforeseen and it was the right time for the Council to take call on reduction of penalties for late filers. 8.21. Hon'ble Minister from Goa, said that during this COVID time everybody was looking to the Central Government for relief but at the same time the States should also be looking towards revenue i.e. how the revenue will come? There can't be a complete of soft landing for everyone. Small taxpayers should be given relief and Rate of interest should be reduced from 18% to 9% for them. As far as the penalty is concerned, the question of charging penalty shouldn't be raised as it was unforeseen circumstance but nevertheless let us take a balanced view, so that revenue should also keep coming. 8.22. Hon'ble Deputy CM, Gujarat stated that for paying tax which had already been collected from the customer, Rate of Interest should be NIL till June, from June to September, it should be 9% and after September it should be 18% as this was no....
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.... the matter in June end or July and if we find that the situation has changed then we will modify it accordingly to which the Council agreed. Summarising the decision, he stated that till September rate of interest be charged at 9% and beyond that 18%, however this will be reviewed in July and if the situation worsens further, then they could further extend benefit of 9%. 8.27. The Hon'ble Finance Minister, West Bengal agreed to the decision conditional to review. 8.28. Proceeding with the second part of the Agenda Item 3(iv) JS, TRU-Il stated that this entire discussion was thus far related to the first part of the said agenda with regard to the returns for the period of February, March and April 2020. The second part dealt with the returns for the period of May, June and July 2020. Briefly recapitulating the compliance relief that had been given to all taxpayers for February, March and April 2020 tax periods as under: * Late fee waiver and 15 days interest waiver with lower rate of interest @% beyond that for taxpayers having turnover> Rs. 5 Cr, if returns filed upto 24th June 2020. * Late fee waiver and NIL interest for taxpayers <Rs. 5 Cr. Turnover, if returns filed by th....
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.... Deputy CM of Bihar, the due dates will be sufficiently staggered. 8.33. The Agenda Item 3(v) relating to the reduction in rate of interest on delayed filing of return to 9% for the entire Fiscal year 2020-21 was not taken up as decision on reduced rates had already been taken covering period up to September 2020 and subject to review thereafter, hence the said Agenda Item was dropped. 8.34. The Hon'ble Minister from Tamil Nadu in his written speech submitted that the proposal in the Agenda Item 3(v) was to defer GST payment for taxpayers with turnover up to Rs. 5 crore beyond 30.6.2020 till 31.3.2021, with interest of 9 percent. This rate of interest was lower than marginal cost of working capital. Therefore, it was likely that this category of taxpayers would be tempted to opt for deferral, even if they didn't need assistance. Further, repeated deferrals would only result in indebtedness of the small tax payers. There was also doubt if they would be able to pay deferred taxes with interest in one Iumpsum after 31.3.2021. They therefore believe that tax deferral may not be the most appropriate way of supporting the small tax payers at this time of need. Moreover, State Governmen....
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....2017 to January 2020, he will be allowed to file subsequent returns. It's a kind of temporary relief given to the taxpayers to help them clear their backlog. He emphasised that the scheme has following 3 benefits: 1. All taxpayers will come into the system. 2. Return filing will pick-up and the system will be streamlined/ cleared. 3. We will get tax revenue. He further clarified that if we start giving refund of late fees paid earlier, then we will end up paying a huge amount as refund. Neither Centre nor States could afford that. Such relaxation schemes had always applied prospectively. 8.39. The Hon'ble Deputy CM of Bihar stated that he did not think that there should be any issue with this proposal. It was a very good proposal and we should have general consensus on the same. 8.40. The Hon'ble Finance Minister of Kerala said that they were in total agreement with the proposal. 9. For Agenda Item 3, the Council: i. Approved following amendment in rule 7 of the CGST Rules, 2017, w.e.f. 01.04.2020 to prescribe the rates for Composition Scheme under Section 10(2A) 7. Rate of tax of the composition levy.-The category of registered persons, eligible for composition levy....
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....usly by Centre and states, in subsequent meeting(s) of the Council. iv. A) Taxpayers having aggregate turnover exceeding Rs. 5 Crore, who were required to file returns of Feb, March and April, 2020 by 24th June to avail the benefit Covid relief package, NIL interest to be charged for 15 days from due date and interest @ 9% to be charged thereafter till 24th June and at normal rate of 18% after 24th June 2020.. B) Provided relief to small taxpayers (aggregate turnover up to Rs. 5 crore) for filing of returns for the months of February, March and April 2020 through reduced rate of Interest of 9% for the period of relaxed due filing date till September 2020. Beyond September 2020 interest of 18% shall apply subject to review of the economic situation. C) Provided relief to small taxpayers (aggregate turnover up to Rs. 5 crore) by waiver of late fees and interest if the returns in FORM GSTR-3B for the supplies effected in the months of May, June and July, 2020 are furnished by September, 2020 (staggered dates to be notified). v. This agenda was dropped. vi. Approved the proposals for reduction in late fees for not furnishing FORM GSTR-3B for tax periods during July, 2017 to 3....
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.... be taken up as an Agenda Item in the next Council Meeting. The Hon'ble Minister from Odisha thanked the Hon'ble Chairperson for the same. 11 For Agenda Item 4 the Council: i. Granted deemed ratification to the following Notifications, Circulars and Orders as in Agenda Item and the presentation (Annexure 3) made during the Council Meeting, which are available on www.cbic.gov.in Act/Rules Type Notification/Circular/Order Nos. CGST Act/CGST Rules Central Tax 09 to 43 of 2020 Central Tax (Rate) 02 to 03 of 2020 IGST Act Integrated Tax 03 of 2020 Integrated Tax (Rate) 02 to 03 of 2020 UTGST Act Union Territory Tax 01 of 2020 Union Territory Tax (Rate) 02 to 03 of 2020 Circulars Under the CGST Act 132 to 138 of 2020 ii. The Notifications, Circulars and Orders issued by the States which are pari materia with above Notifications, Circulars and Orders were also deemed to have been ratified. iii. Table Agenda Item 11(v) be moved as a regular agenda in the 41st GST Council meeting. Agenda item 5; Decisions of the GST Implementation Committee (GIC) for information of the Council 12. The Secretary asked JS, TRU-Il to present Agenda No. 5. Thereafter, JS. ....
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.... Pertaining to cases received from Nodal Officers on account of technical glitches in filing TRAN-1 & TRAN-2 (257 cases): i To allow 75 cases of TRAN-1/TRAN-2 pertaining to Subcategories Al, A2, A4 and A5 of technical glitch for filing of TRAN 1/TRAN 2 in accordance with the Law Committee recommendations regarding consequential benefits related to filing of TRAN 1and TRAN 2. ii Not to allow remaining 182 cases of TRAN-1 pertaining to Category 'B' (Subcategories BI, Bi. B3, B4, B5, B6, B7 and B8) in the absence of any evidence of technical/system errors in these cases, as was decided in similar cases in past ten IT-GRC meetings. 14.4 Recommendation for Agenda 2; Pertaining to cases received as Court Cases on account of technical glitches in filing TRAN-1 & TRAN-2 (18 cases): i. To allow 07 Court cases of TRAN- 1 TFRAN-2 pertaining to subcategories A 1 and A5 of technical glitch for filing of TRAN 1/TRAN 2 in accordance with the Law Committee recommendations regarding consequential benefits related to filing of TRAN 1 and TRAN 2. ii. Not to allow remaining 11 Court cases of TRAN-1/TRAN-2 pertaining to Category 'B' (Subcategories Bi, B3, 84 and B6) in the absence of any evidenc....
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....ified in CBIC Circular 39/13/2018 dated 03.04.2018 read with CBIC letter F.No.CBEC-20/06/17/2018-GST dated 04.02.2020. Thereafter, GSTN shall examine technical logs of all such cases and place before the ITGRC for decision e. The following issue shall be referred to the Law Committee through GSTN: whether the date prescribed under Rule 117(1A) is the last date for completion of all the formalities including the filing/revision of TRAN-1/2 and whether the said date would need to be extended again if the cases have been received upto 31.03.2020 by Nodal Officers and GSTN but considered and approved after 31.03.2020 by ITGRC for being allowed to file/revise TRAN- 1/2. 12th ITGRC Meeting 26"' May 2020 14.7 The 12th meeting of the IT grievance Redressal Committee (IT-GRC) was held on 26th May 2020 through Video Conference to resolve grievance of the taxpayers arising out of technical problems. The Agenda 1 consisting of a total of 118 cases of TRAN 1/TRAN-2 had been examined by GSTN and presented before the ITGRC. Out of these, 104 cases were sent by Nodal officers and 14 were court cases. After detailed discussion, the 12th ITGRC decided and recommended as under: 14.8. Recommenda....
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....ng the State and Area Benches of the Goods md Services Tax Appellate Tribunal (GSTAT) for the State of Uttar Pradesh i.e State Bench at Lucknow and 04 Area Benches at Varanasi, Ghaziabad, Agra and Prayagraj was considered and approved by the Council 17. For Agenda No. 7 the Council approved the creation of State Bench at Lucknow md 4 Area benches at Varanasi, Ghaziabad, Agra and Prayagraj for the State of Uttar radesh. Agenda Item 8: Quarterly Report of the NAA (National Anti-profiteering Authority) the period from 01.01.2020 to 31.03.2020 18. In terms of provisions of clause (iv) of Rule 127 of the CGST Rules 2017. National Anti-Profiteering Authority (NAA) was required to furnish a performance report to the GST Council by 10th of the closing of each quarter. The Secretary introduced this Agenda Item pertaining to various issues related to the National Anti-profiteering Authority (NAA) and placed the quarterly performance report for the period from 01.01.2020 to 31.03.2020 of National Anti-profiteering Authority of the financial year 2019-2020 before the Council, as under: (a) 34 Orders were passed by the Authority during this quarter. All the orders were passed unanimously.....
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....d decided that a structured grievance redressal mechanism should be established for the taxpayers under GST to tackle grievances of taxpayers on GST related issues of specific / general nature. GST Council has accordingly approved constitution of 'Grievance Redressal Committee' at Zonal/State level consisting of both Central Tax and State Tax officers, representatives of trade and industry and other GST stakeholders. 20.1. Office Memoranda F.No. 820/GRC/GSTC/2019 dt. 30.12.2019 and 07.02.2020 were issued by this GST Council Secretariat for constitution of Grievance Redressal Committee (GRC) at CBIC Zonal/State level in accordance with CBIC letter F.No. 20/10/16/201 8-GST(Pt.1) dated 24.12.2019. 20.2. The present position of constitution of GRC on the basis of orders constituting Zonal/State level Grievance Redressal Committee which have been received in the GSTC Secretariat, have been compiled and updated (Annexure 4). The details of constitution of these GRCs are being uploaded regularly on the GST Council website http://www. gstcouncil.gov.in/grievance-redressal-committees-central-zonestate-level under sub-menu "Public Grievance Redressal Committee (GRC)" under menu "Help" for ....
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....e discussion which took place in the previous Council meeting should be taken forward as the entire industry was bearing the brunt of inversion. He emphasised that the textile industry felt that for the growth of entire textile chain and to make it more competitive in the international market, a uniform rate structure for the entire textile value chain was required and that there should be immediate correction of inversion. He added that therefore, the emphasis of his presentation was more on the textile sector because of the kind of inversion in the sector and the way it was affecting the industry. 22.3. JS, TRU I elaborating on the need for correction of inversion in this sector submitted that there were significant implications in terms of cash flow and unutilised ITC. No refund was given on input services and capital goods. As a result, working capital gets blocked and the ITC became cost to the sector. Most importantly, while big units could take care of their inversion in 'view of their integrated business beginning from initial stage of supply chain and their significant value addition in the supply chain. For instance large units may start from chemical and go up to fabric....
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....to inversion and consequent adverse impact on the sector. So, in all the sectors, the inversion comes from various sides and this inversion is resulting in blockage of funds. Some refund is given and some refund is blocked. Some corrections have been made in past but all those corrections are not fully helping the sector and also as refund of capital goods credit is not there, investment issues are there. Further discussing the implication of inversion in terms of revenue as well as refunds he stated that in 2018-19, refunds started from August as before that refund on fabric was not allowed and as of now, we end up giving a refund of about Rs. 6000 crores in a year on the textile chain and this was bound to increase in future. 22.6. JS, TRU I further stated that the entire issue was examined at great length and the recommendations of the Fitment Committee on the proposed structure of GST was as brought out in the presentation (Annexure 5). He stated that if inversion could be corrected, following benefits will accrue: * A simple uniform rate across textile chain * Refund outgo shall be reduced by at least Rs. 6000 crore a year * No cash flow issues for domestic manufacturer....
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....pt the proposal. When things stabilised, they could revisit the proposal may be in July- August as he was in agreement in principle. 22.9. The Hon'ble Finance Minister, West Bengal further added that logic of correcting inverted duty structure, not only in textiles but in many areas is very strong and theoretically he agreed to it but this was not the right time to send out message that garment goes to 12% from 5%. He added that in the proposed structure only man-made fibre benefits by going down from 18% to 12% and there were very big players in this segment who could afford the inverted duty structure. He lauded the presentation given by JS TRU I but again emphasised that this was certainly not the right time and he could not agree to the proposal for present. He suggested that the matter be reviewed when things stabilized and un-employment rate carne down. He urged the Council to defer their decision on the proposal. 22.10. Hon'ble Deputy CM Bihar stated that he agreed with West Bengal that this was not an opportune moment as rate would increase from 5% to 12% for the garments having price of less than Rs. 1000. This will give wrong message to public as in these Corona times t....
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.... no last date or time period when it would end. He also congratulated Fitment Committee for bringing out this proposal and said they were not increasing rates, but just correcting anomaly and therefore as per their understanding the proposal could be accepted now and implemented later when deemed fit. 22.16. Hon'ble Finance Minister Kerala stated that he wished to recall the discussions that had taken place in last Council meeting. He stated that there was no objection to the proposal but the time was not appropriate and that the crisis had only deepened since. He accepted that the proposal would help production and industry but the rate on final product was increasing and that's where the problem lied. He requested to defer the issue. 22.17. Gauging the sense of the Council the Hon'ble Chairperson felt that the Agenda item may be deferred for a later appropriate time. 22.18. The Hon'ble Minister from Tamil Nadu in his written speech submitted that in their State, they had been receiving numerous representations from the trade associations dealing with food grains complaining that the tax authorities were demanding tax for delayed filing of disclaimer affidavit before the jurisd....
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....ed about the discussion on compensation. The Finance Secretary drew the attention of the Council to the presentation made by Joint Secretary, Department of Revenue on issue of revenue position and stated that the compensation cess collected during 2017-18 and 2018-19 was more than the compensation requirement. However, since last year 2019-20, the compensation cess collected was only Rs. 95,444 crore and actual compensation required was more than Rs. 1,50,000 crore. In the last financial year 2019-20 itself Rs. 1,20,498 crore was released and in the current financial year, during the months December, January and February, Rs. 36, 000 crore was released. So, for the last Financial Year, more than Rs. 1,50,000 crores compensation was released by the Central Government. Now, the position is that the money coming into the compensation fund has been much less than the actual requirement due to the falling revenues in these difficulty times. The difficulty is on two counts. The first is due to the lower volumes of trade; the compensation cess collection is low and second is that the compensation requirement is also increasing. The law (Goods and Services Tax (Compensation to States) Act,....
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.... binding compensation needs to be paid to the States. He had mentioned it earlier that it is a contra-cyclical measure. Giving compensation when the revenues shrink enables the State revenues to be stable. The issue now is how to meet it when the revenues are going down and the compensation requirement is going up. There is only one solution to this. The GST Council has to borrow the money to pay and let the compensation cess be extended. There is no other option. Now, there is no option of increasing the number of commodities on which compensation cess can be imposed because it is unacceptable during the economic slump. It is the same reason the agenda earlier was put aside. The borrowing by the GST Council does not affect the fiscal deficit of the Central Government because it is outside the budget. There was consensus on this issue in the GST Council and it was recorded in the minutes of the earlier meetings. There was a detailed discussion on this issue and the assurance of 14% growth was the reason why many States which had serious reservations agreed to this. Tamil Nadu, till the very end held out against GST. Some other States also had reservations. It was because of this pr....
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.... of GST to pay compensation to the States. But, whether the GST Council has the mandate to raise the loan as a sovereign body like Centre or State need to be examined very closely. As of now, the Union Government is so gracious that in spite of low collections, it has borrowed money and released Post Devolution Revenue Deficit Grant to States. The Central Government was taking good care of States by, firstly, allowing Revenue Deficit grant for states like Assam and Kerala and secondly, by not curtailing as of now the Devolution Grant of States. These two streams of fund were a big help for the States. They were initially afraid whether the Centre would be able to give the amount since these are big amounts like Rs. 1,400 crore and Rs. 600 crore for a State like Assam. His first request to the Central Government was to continue the Revenue Deficit Grant and Devolution Grant since these were their bread and butter. He thought that States are not thanking enough the Central Government for continuously giving the amounts to States which could have been cut due to low tax collections. He was sure that lot of hard labor must have gone into achieving this. The Council can continuously dis....
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.... to make. First was to not stop Revenue Deficit Grant. Second was to not stop Devolution Grant and third to see whether some conditions for availing increased borrowing limit can be relaxed? He agrees that some conditions have to be implemented hut some of these were difficult or near impossible to implement before December 2020. He requested for some flexibility in this regard. He promised that the States will put in best efforts and in case if it is not possible to fulfill some conditions, relaxation may be given. For example without Aadhaar, One Nation One Ration Card cannot be implemented but Assam does not have Aadhaar. They had just completed up to 35%. State of Meghalaya does not have Aadhaar at all. In cases where, despite best efforts, if some of the conditionalities are not implemented, the States may not be penalized for that and may be next year they will fulfill all the conditions. 26.3. Hon'ble Dy. CM of Bihar read from page no 22 of the Agenda Note that as per the proceedings of the 39th GST Council Meeting, the Hon'ble Union Finance Minister said that 'She reiterated the commitment made by the then chairperson of the GST Council that in case there are no adequate r....
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....detailed discussion on the issue of compensation. Along with this, he requested that detailed discussion should also be held on anomalies, sources of funds and inputs outgo as refunds since there is no end date for Corona epidemic. We should move ahead with the idea that we go forward along with the COVID disease. Just like we wear a raincoat and carry an umbrella during rains, wear a coat and muffler during winter season, we should take all precautions cum protective measures to deal with Corona epidemic and move forward with an understanding that corona epidemic will not end soon and we learn to live with it accordingly. Along with this we should recognize that economic activities are essential. If the economic activities stop, we do not move forward and we postpone decisions then all our activities will stop. He submitted that in the 37th GST Council Meeting, it was discussed that Mentha-oil may he brought within the ambit of Reverse Charge Mechanism (RCM). Mentha-oil is the subject of only Uttar Pradesh. The burden should fall on the purchaser and not on the farmer. Under RCM, Kaju (cashew), Tendu leaves, silk yam, cotton etc. are present. The Council could not take decision on....
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....economic management. Some items like Petrol, Diesel, and Liquor are still taxed by the States. Today, when there is an extraordinary situation in Delhi, though neighboring States have not made it so costly but we have increased the price of diesel by Rs. 6. Also they imposed 70% 'special corona fee' on liquor since they had the power to impose on these items. Now, the power to impose GST rests with the GST Council. Therefore, in extraordinary situations GST Council has to support the States. While the responsibility to pay and meet expenditures is with the States, the power to tax rests with the GST Council. Therefore, GST Council has to take up the responsibility. By labeling it as 'act of God' the GST Council cannot shirk off responsibility stating that it will only look at economic management and reimburse only if there was some issue with GST and its management. For the first time in the history of this country, we have created a superb federal structure. The responsibility should be showcased now and whatever extraordinary measures can be undertaken like possibilities of raising a loan from the market should be explored. He praised the way the Hon'ble Union Finance Minister in....
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....a different level. Unfortunately, while it seemed that we were on the right track, COVID pandemic happened. When it comes to lowering the rates there is a tendency to be State specific. Only those rates which affect particular State revenues are desired to be lowered by respective members. If that is so, then who is going to think of the country and overall buoyancy in the revenue, He did not want to name anyone but the Council did not, at one point of time, hesitate to tinker the architecture of GST. A certain State was in distress and he also supported the decision then allowing them to impose a State specific cess with a sunset clause. The Council wanted to be practical. This subject needs much more time and much more application o mind. Even the States want to apply their mind and come out with some solution. It is not just merely giving opinion on whether we are allowed to borrow. Whether we will borrow, how exactly it will be done and contacting legal luminaries are not the points to ponder. What we need is pure and strong application of mind and that is why need a fuller session to discuss this particular subject. He strongly believed that all the State Finance Ministers com....
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....mpensation at the right time and therefore they may be given the option of borrowing at their own end, by removing certain conditions, the borrowing limit which was increased from 3% to 5% recently may be further increased by 0.25% or more. Whether the whole borrowing should be done by the GST Council is a very big question. Secondly, looking into the situation, RBI always deals with the emergencies; RBI maintains its SLR rate with banks. RBI has certain deposits to deal with the emergencies. Similarly, in future, we should have certain corpus funds for the Council. Whenever few States have certain problems or whenever the whole country is faced with issues like the current corona pandemic, certain corpus funds have to be built over a period of time, so that they can be utilized in emergencies. He thought that wider consultation is necessary, course corrections are necessary and so many other things have come up. He believed that we can get through this if everyone put their energies together. Under the leadership of the Hon'ble Union Finance Minister, we need to come up with an extraordinary solution to deal with the extraordinary situation. 26.8. Hon'ble Minister from Telangana ....
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....rity to borrow, what are the sources may be discussed. He supported the statement of Dy. CM of Bihar that this should be taken up exclusively and before that the officers should be instructed to do due diligence on the available options. A detailed discussion can follow after this. It is time that this should be taken to another meeting exclusively with the due diligence and options to be given in advance to the States so that they can also do their due diligence and come back to the Council. 26.10. Hon'ble Minister from Uttar Pradesh stated that it was his humble request to specially present a view point that whatever matters are assigned to Law and Fitment Committees, since the Council meets once in every three months, the reports of the Committees should be tabled before the Council in its subsequent meeting. Along with this, issues that were raised, issues related to revenue collections and topics which can increase revenue collections should be decided at the earliest. Mentha-oil is an issue relevant to the State of Uttar Pradesh There would not be any additional burden due to this and therefore it has to be brought within the ambit of RCM. Brick Kiln & Pan Masala issues have....
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.... Delhi 8 Goa Shri Mauvin Godinho 9 Gujarat 10 Haryana Shri Nitinbhai Patel Shri Dushyant Chautala 11 Shri Bikram Singh 12 Jammu and Kashmir Shri K. K. Sharma Himachal Pradesh 13 Jharkhand Shri Rameshwar Oraon 14 15 Karnataka Kerala 16 Madhya Pradesh 17 Meghalaya Shri Basavaraj Bommai Dr. T. M. Thomas Isaac Shri Narottam Mishra Shri James K. Sangma Shri Lalchamliana Shri Niranjan Pujari Shri V. Narayanasamy Shri Manpreet Singh Badal 18 Mizoram 19 20 Odisha Puducherry 21 Punjab 22 Tamil Nadu 23 24 Telangana Tripura Shri T. Harish Rao Shri Jishnu Dev Varma 25 Uttarakhand Shri Madan Kaushik CHAIRMAN'S INITIALS 26 Uttar Pradesh 27 West Bengal Shri D. Jayakumar Shri Suresh Kumar Khanna Dr. Amit Mitra Charge Union Finance Minister Minister of State (Finance) Minister for Finance, Planning and Legislative Affairs Finance Minister Deputy Chief Minister Minister, Commercial Tax Deputy Chief Minister Minister for Transport and Panchayat Raj Deputy Chief Minister Deputy Chief Minister Minister for Industries, LEP, Tech. Education and Vocational & Ind Training Advisor to Lt. Governor Minister - Planning cum Finance, Commercial Taxes, Food, Public Distribution & Consumer Affairs. Minister for Ho....
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....ncil 31. GST Council 32. GST Council 33. GST Council Shri Mahesh Singarapu Shri Krishna Koundinya Shri Sarib Sahran Shri Adesh Nayak Under Secretary Under Secretary Superintendent Superintendent 34. GST Council Shri Krishan Kumar Verma Superintendent 35. GST Council Ms Chanchal Soni Superintendent 36. GST Council Shri Sumit Kumar Superintendent 37. GST Council 38. GST Council Shri Rakesh Joshi 39. GSTN Shri Vijay Malik Shri Prakash Kumar 40. GSTN Ms Kajal Singh 41. GSTN Shri Nitin Mishra 42. GSTN 43. GSTN Shri Jagmal Singh 44. GSTN Shri Sarthak Saxena 45. Govt of India Shri Sandeep Puri 46. Govt of India 47. Andhra Pradesh 48. Andhra Pradesh 49. Andhra Pradesh 50. Andhra Pradesh CHAIRMAN'S INITIALS 51. Andhra Pradesh Shri S. Sekhar Shri Vashistha Chaudhary Shri Nishith Goyal Shri Peeyush Kumar Shri K. Ravisankar Shri D. Venkateswara Rao Shri J.V.M. Sarma Inspector Inspector CEO EVP, Services EVP, Tech SVP (Services) VP, Services OSD to CEO Comissioner, Delhi - Audit Chief Commissioner, Patna, Ranchi Zone Chief Commissioner (State Tax) (GST) Addl. Commissioner, State Tax (GST) OSD, Revenue Joint Commissioner, State Taxes Joint Commissioner, 68 JAYNA BOOK DEPOT Estd. 1949 JAYNA MINUT....
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....i Mansur M. I. Shri Manoj Govil Shri Raghwendra Kumar Singh Shri Sudip Gupta Secretary, Commercial tax Commissioner, CTD Special Secretary, CTD State Tax officer Commissioner, CT Additional Commissioner, Commercial Taxes Additional Chief Secretary Commissioner, State Tax Special Commissioner, State Tax Deputy Commissioner, State Tax PS, Commercial Tax Department CCT Jt. CCT 70 JAYNA BOOK DEPOT MINUTE BOOK Estd. 1949 99. Maharashtra JAYNA 100 Maharashtra Shri Sanjeev Kumar Shri Dhananjay Akhade 101 Maharashtra Shri Kiran Shinde Commissioner, State Taxes Joint Commissioner, State Taxes Deputy Commissioner, State Taxes Additional Chief Secretary (Finance) 102 Manipur Dr. Rajesh Kumar Commissioner of 103 Manipur Shri Charchit Gaur Taxes Asst. 104 Manipur Shri Yumnam Indrakumar Singh Commissioner of Taxes Commissioner & Secretary, Additional Commissioner of 105 Meghalaya Smt S. A. Synrem Taxation Commissioner of 106 Meghalaya Shri Arunkumar Khembavi State Tax 107 Meghalaya Shri L. Khongsit 108. Meghalaya 109 Meghalaya Shri N. L. Sohliya 110 Meghalaya 111 Mizoram 112 Mizoram 113 Nagaland 114 Nagaland 115 Odisha 116. Odisha 117 Puducherry 118. Puducherry 119 Puducherry Smt. S. M. Sutnga S....
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....r APS/Additional Chief Secretary, State Tax Commissioner, CT Joint Commissioner, CTD AC, CT Finance Secretary Commissioner, State Tax GST PPU Head 73 CHAIRMAN'S INITIALS CHAIRMAN'S INITIALS MINUTE BOOK Annexure 3 PPT for 40th GST Council 12th June 2020 Agenda 3(i) Amendment in rule 7 of CGST Rules to prescribe the rates for Composition Scheme under Section 10(2A) • Composition scheme for services (turnover upto Rs. 50 lakhs) implemented through Rate notification w.e.f. 01.04.2019 • Section 10(2A) enacted as part of Finance Act 2019 and notified • Rate of tax under the same is required to be prescribed, though covered by Notification Proposal: • Rule 7 of CGST Rules, 2017 to be amended w.e.f. 01.04.2020 to prescribe 3% rate for such supplies by registered person opting to pay tax under section 10(2A) which is a technical change of legal drafting. 74 MINUTE BOOK Estd. 1949 JAYNA Agenda 3 (ii) Proposal to issue Removal of difficulty order for extending the time limit for revocation of cancellation of registration • In the 39th meeting of the GST Council, issuance of RoD order was recommended in cases where cancellation orders were passed upto 14.3.2020, t....