38th GST Council meeting was held on 18 December 2019 It was chaired by our Hon’ble Union Finance Minister Nirmala Sitharaman and conducted at New Delhi.
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The Goods & Services Tax (GST) Council, in its 38th meeting, decided on a single rate of 28 % on both state-run and private lotteries. The new rate would be applicable from 1st March, 2020.
The is the first time that the Council arrived at a decision through voting since it was constituted.
“Every attempt was made to keep that set tradition alive, every attempt was made to convince based on opinion making in the house but eventually the Council was reminded what the rules allow, and that tradition was not part of the rulebook. And the rules are what should govern the Council…” Finance Minister Nirmala Sitharaman said.
Presently, lotteries run by state governments attract 12 % GST, while those authorised by them and sold outside the state are taxed at 28 %.
The Centre, on 16th December 2019, released Rs 35,298 Crore as GST compensation to the states for August and September. The Council also extended the deadline for GSTR 9 and GSTR 9C return filing for 2017 – 18, to 31st January, 2020 from 31st December, 2019 earlier.
The GST Council has exempted long term lease on industrial plots to facilitate setting up of industrial parks. It also rationalised tax rate on woven and non-woven bags to 18 %.
What is the GST Council?
In July 2017, Union of India, Indian states and union territories agreed to have a unified indirect tax regime, the Goods and Services Tax (GST). The regime is governed by a federal body chaired by union finance minister. Finance ministers of states are its members. As per convention, all decisions taken by the council on unanimous basis.
Highlights of 38th GST Council Meeting
1. Due dates extended for GSTR-9 & GSTR-9C for FY 2017-18 till 31 January 2020
The due date of GSTR-9 & GSTR-9C are extended further till 31 January 2020 from the earlier date of 31 December 2019. It was done to allow more time for taxpayers to use the offline tool of GSTR-9C that is expected to be made available on 21 December 2019.
2. Provisional ITC claim in GSTR-3B further restricted
The amount of ITC availed on a provisional basis restricted to 10% from the earlier 20%, where invoices or debit notes are not reflected in GSTR-2A. Hence, invoice matching must be frequently done and vendor communication becomes challenging.
3. Late fee waiver on GSTR-1 through amnesty scheme
Waiver of late fee for GSTR-1 for tax periods between Jul 17 and Nov 19, if filed by 10 January 2020. If the taxpayer does not still file for more than two consecutive tax periods, then e-way bills of such taxpayer will be blocked from generation.
4. Standard Operating Procedure (SOP) in case of non filing of GSTR-3B defined for taxman
The SOP is to be released for the benefit of tax officers about actions taken for non-filing of GSTR-3B. These will help in blocking or reversal of fake ITC availed.
5. Due dates for GST returns extended for certain category of taxpayers
The due date extension for GST returns for some North Eastern States (November 2019) to be extended till 31 Dec 2019.
6. The GST Council decided to levy 28% tax on all lotteries
Opts for voting to conclude the matter
Date of applicability is 1 March 2020
Prior, GST rates on lottery schemes were as follows:
1. State-owned – 12%
2. State-authorised – 28%
7. GST Rate rationalised to remove inverted tax structure
The GST Council imposes a uniform rate of 18% from earlier 12% on bags belonging to HSN code 3923/6305 from 1 January 2020 (woven and non-woven bags and sacks of polythene or polypropylene strips or the like , whether or not laminated, of a kind used for packing of goods including FIBC). It effectively removes the inverted tax structure.
8. GST exemption for the industrial land developers
Supply should be a long-term lease of an industrial or financial infrastructure plots. The Central or State Government holds 20% or more shares in the developer’s capital from the earlier share of atleast 50%. Exemption to apply from 1 January 2020.
9. Other Decisions:
Amendments to the GST law to be taken up in the Union Budget 2020-21. Several thoughts deliberated on GST revenue augmentation. Grievance Redressal Committees (GRC) will be constituted at Zonal/State level to address grievances of specific/ general nature of taxpayers.