Updates on 45th GST Council Meeting

Hon’ble Finance Minister Nirmala Sitharaman chaired the 45th GST Council Meeting held on 17th September, 2021 in Lucknow. The major outcomes of the meeting are as follows:

1) Relaxation in the requirement of filing Form GST ITC 04: Taxpayers whose annual aggregate turnover (AATO) in preceding financial year exceeds Rs. 5 crore can furnish Form ITC-04 once in six months. Taxpayers whose AATO in preceding financial year is up to Rs. 5 crore can furnish ITC 04 annually.

2) Interest to be charged: As per previous council decision, interest was to be charged on net cash liability under GST. Now section 50(3) of the CGST Act to be amended retrospectively from 1st July, 2017 to charge interest on “ineligible ITC availed and utilized” @ 18% p.a.

3) Availment of ITC: Restriction on availment  of ITC in respect of invoices or debit notes, to the extent the details of invoices/ debit notes which are furnished by the supplier in GSTR 1/ IFF and are reflected in GSTR 2B.

4) Balance in Cash Ledger: The unutilized balance in CGST and IGST cash ledgers can be transferred between entities with same PAN but registered in different states without refund procedures.

5) Aadhar authentication to be mandatory for taxpayer to be eligible to file a refund claim and an application for revocation of cancellation of registration.

6) GSTR 1 Late Fees: Late fees for delayed filing of GSTR 1 to be auto populated and collected through next GSTR 3B.

7) From 1st January, 2022 onwards, registered person will not be allowed to furnish GSTR 1 if they have not furnished GSTR 3B for the preceding month.

8) The matter of bringing Petrol and Diesel under GST was discussed. However, it was decided that this was not the right time to bring petrol and diesel under the scope of GST.

9) The compensation cess collection is extended till March 2026.

10) With regard to food delivery apps, the e commerce operators will pay the tax on restaurant services provided through them.

11) GST on railway parts and locomotives falling under chapter 86 increased from 12% to 18%

12) Also, there are certain other changes with respect to the GST rates on goods and services which are proposed and which will be effective from the date of CBIC notification which is awaited.

Complete circulars attached

Circular – 1 

Circular – 2

Circular – 3