53rd GST Council Meeting: Almost eight months after the previous one, on June 22, 2024, in New Delhi, the 53rd GST Council meeting took place. This meeting was presided over by Nirmala Sitharaman, the recently appointed Union Finance Minister. This is the inaugural meeting of the GST Council following the Lok Sabha elections of 2024.
This GST Council meeting’s agenda contained a lot of items. Additionally, the Union FM held pre-budget consultations with several states and UTs before the GST Council meeting. Union FM further confirmed that, as of December 31, 2023, 1,14,999 taxpayers, or less than 1.96% of all GST taxpayers, had received notices under the GST.
Highlights from the 53rd GST Council Meeting
Ease of compliance burden of taxpayers
- Changes will be allowed in GSTR-1 going forward within the same tax period: The implementation of a new form, GSTR-1A, which permits taxpayers to add or change details of GSTR-1 of the current tax period/IFF for the first and second months of the quarter that are missed before filing GSTR-3B, was approved by the GST Council.
- GSTR-1 reporting for B2C supplies: There would be a reduction in the threshold from Rs. 2.5 lakh to Rs. 1 lakh for reporting business-to-consumer (B2C) interstate supplies invoice-wise in Table 5 of GSTR-1.
- GSTR-4 Due Date Revised: Starting with FY 2024-2025, an extension is offered to the current 30th of April for composition taxable people to file their GSTR-4 returns by the 30th of June 2024.
- GSTR-7 filing is required: GSTR-7 reporting is required even in cases where no TDS is withheld, as stated invoice by invoice. There is no late filing penalty for a nil filing.
- GSTR-9/9A filing applicability: Taxpayers with an annual gross income of up to Rs. 2 crores are excused from making an annual return in GSTR-9/9A for the fiscal year 2023–2024.
- Amendment to Section 16(4): It may be determined that the deadline for claiming Input Tax Credit (ITC) for invoices or debit notes in any GSTR-3B filed up until November 30, 2021 (which applies to the fiscal years 17–18, 18–19, 19–20, and 20–21) is November 30, 2021. This will take effect retroactively on July 1, 2017. Additionally, where returns are filed by the registered person within thirty days of the order of revocation, Section 16(4) shall be relaxed for the period from the date of cancellation of registration/effective date of cancellation of registration to the date of revocation of cancellation of the registration.
- Amendment to CGST Rule 88B: If the GSTR-3B is filed after the deadline, the GST Council advises against charging interest on the amount that is accessible in the electronic cash ledger on that date and is debited during the filing of the relevant report.
- New Section 128A: For demand letters issued under Section 73 of the CGST (applicable for fiscal years 17–18, 18–19, and 19–20) in circumstances not involving fraud, suppression, or misrepresentation, the GST Council has waived interest and penalties. It is applicable in situations where the taxpayer pays the notice’s total amount by March 31, 2025.
- Financial Boundaries for GST Appeals: The department is advised to file appeals before these legal forums no more than Rs. 20 lakh for the GST Appellate Tribunal, Rs. 1 crore for HC, and Rs. 2 crore for SC.
- TCS Rate Reduction: By Section 52(1) of the CGST Act, Electronic Commerce Operators (ECOs) were required to collect tax collected at source (TCS) at 1% (0.5% each under CGST and SGST/1% under IGST) on net taxable supplies. Reducing this to 0.5% (0.25% under CGST, 0.25% under SGST/UTGST, and 0.5% under IGST) is advised.
- Amending Sections 107 and 112: The maximum pre-deposit amount under CGST and SGST will be reduced to Rs. 20 crore and Rs. 25 crore, respectively, for filing an appeal before appellate bodies. Additionally, the pre-deposit amount for appeals before the GST Appellate Tribunal has been lowered from 20% to 10%, with the maximum amount allowed under CGST and SGST is Rs. 50 crore and Rs. 20 crore, respectively.
- Sunset Clause to amend Sections 109 & 117: Sunset clause to be added for anti-profiteering cases pending, and the decision was taken to shift the hearing panel from CCI to the principal bench of GSTAT. The GST Council has also recommended the sunset date of 1st April 2025 for receiving any new application regarding anti-profiteering.
- Changes in Sections 73 and 74: These sections will both provide a consistent timeframe for the issuance of orders and demand notifications, without making a distinction between circumstances involving fraud and those involving non-fraud. To be eligible for the reduced penalty, taxpayers would have an additional 30 to 60 days to pay the required tax amount plus interest.
- Time limit to file appeals before the GSTAT: The GST Council recommended modifying Section 112 to provide 3 months for filing appeals before the GST Appellate Tribunal. It will start from a date yet to be notified by the government, most likely to be announced by 5th August 2024 as this is the last date.
- New Section 11A: This provision permits regularization of short- or non-levy GST in cases where widespread commercial practices were causing underpayment or nonpayment of tax.
- IGST Refund due to upward price revisions after exports: To assist taxpayers in obtaining reimbursement for additional IGST paid for upward price revisions of goods after export, a method for claiming refunds of additional IGST paid is being introduced.
- No IGST refund in some situations: By amending Sections 16 and 54, IGST will not be reimbursed in situations when export duty is due. This covers exports as well as supply to SEZ units and developers, whether or not taxes are paid.
- Aadhaar authentication with biometrics: Those who opt to employ the biometrics-based Aadhaar authentication method at the GST Suvidha Kendra will eventually be able to register for GST across the nation.
- DRC-03 Circular anticipated notification: A circular outlining a procedure for reducing any demand amount paid via DRC-03 in comparison to the amount required as a pre-deposit to file a GST appeal will be released.
- Section 122(1B) is to be changed: To make it clear that the aforementioned criminal provision only applies to those e-commerce operators that are obligated to collect TCS under Section 52 and not to other e-commerce operators, the amendment will take effect retroactively on October 1, 2023.
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Conclusion
The 53rd GST Council Meeting produced important revisions that show how the GST structure is still evolving. The council has once again shown that it is committed to improving the GST regime with important decisions ranging from adjustments to tax rates to simplified compliance procedures. These reforms are anticipated to ensure that the tax system stays strong and equitable while providing much-needed clarity and ease for businesses, especially small and medium-sized ones. Businesses must stay educated and adjust to these changes as the GST landscape changes to retain compliance and maximize their financial plans. All parties involved must be watchful and proactive since the decisions made at this meeting will surely influence the GST framework in the months to come.