Implementation of Recommendations of 48th GST Council Meeting

The 48th GST Council meeting was held on 27th December 2021 and several recommendations were made by the Council for the simplification of the GST compliance process and to provide relief to taxpayers. Some of the key recommendations and their implementation status are:

1. Extension of Due Date for GST Annual Return and Reconciliation Statement: The due date for filing GST Annual Return and Reconciliation Statement for the financial year 2020-21 has been extended to 31st March 2022.

2. Simplification of GST Returns: The Council has recommended the implementation of a new GST return system with the following features:

Monthly return for small taxpayers with turnover up to Rs 5 crore
Quarterly return for taxpayers with turnover above Rs 5 crore
Auto-population of input tax credit and liability based on invoices uploaded by the supplier
Option to file Nil return by SMS
Option to file Quarterly Return Monthly Payment (QRMP) scheme by small taxpayers

3. Changes in GST Rates: The Council has made the following changes in the GST rates:

Reduction in GST rate on goods and services used for Covid-19 treatment from 12% to 5%
Extension of GST exemption on specified Covid-19 related goods till 31st March 2022
Rationalization of GST rates on textiles and textile products

4. Rationalization of Late Fee for Delayed Filing of GST Returns: The Council has recommended the rationalization of late fee for delayed filing of GST returns based on the taxpayer's turnover.

5. GST Refunds for Inverted Duty Structure: The Council has recommended the simplification of the process for claiming GST refunds for inverted duty structure.

The implementation of the above recommendations has been carried out through various notifications, circulars and orders issued by the Central Board of Indirect Taxes and Customs (CBIC) and the respective state tax authorities. These measures are expected to provide significant relief to taxpayers and promote ease of doing business in India.

Changes in GST rates recommended by the Council

The 48th GST Council meeting held on 17th December 2021 recommended the following changes in the GST rates:

1. Reduction in GST rate on goods and services used for Covid-19 treatment from 12% to 5%: The Council has recommended a reduction in the GST rate on Covid-19 related goods and services such as oxygen concentrators, pulse oximeters, ventilators, Covid-19 testing kits, etc. from 12% to 5%. This reduction in GST rate will make these goods and services more affordable for consumers and patients.

2. Extension of GST exemption on specified Covid-19 related goods till 31st March 2022: The Council has also recommended an extension of the GST exemption on certain Covid-19 related goods such as medical grade oxygen, oxygen concentrators, ventilators, etc. till 31st March 2022. This will provide relief to Covid-19 patients and their families.

3. Rationalization of GST rates on textiles and textile products: The Council has recommended a rationalization of GST rates on textiles and textile products to promote the growth of the sector. The GST rates on certain textile products such as man-made fibers, yarns, and fabrics will be reduced from 12% to 5%, while the GST rate on other textile products such as silk and cotton fabrics will be increased from 5% to 12%.

These changes in GST rates will be effective from 1st January 2022.

Purpose of simplifying the process for claiming GST refunds for inverted duty structure

The purpose of simplifying the process for claiming GST refunds for inverted duty structure is to provide relief to the taxpayers who have to deal with an inverted duty structure, where the tax rate on inputs is higher than the tax rate on the final product. This situation often leads to an accumulation of input tax credit (ITC) and creates a cash flow problem for the taxpayers.

To address this issue, the government has introduced a simplified process for claiming GST refunds for inverted duty structure. The process aims to reduce the time taken for processing refund claims and provide faster relief to the taxpayers. This will not only improve the ease of doing business but also increase compliance and transparency in the GST system.

The simplified process for claiming GST refunds for inverted duty structure allows taxpayers to file a single refund claim for the entire tax period instead of filing multiple claims for each invoice. Additionally, the process allows taxpayers to file a refund claim on a quarterly basis instead of a monthly basis. This will reduce the compliance burden on small taxpayers who face difficulties in complying with the monthly filing requirements.

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FAQs

Here are some FAQs related to the implementation of the recommendations of the 48th GST Council meeting:

Q: What is the new due date for filing GST Annual Return and Reconciliation Statement for the financial year 2020-21?

A: The due date for filing GST Annual Return and Reconciliation Statement for the financial year 2020-21 has been extended to 31st March 2022.

Q: What are the features of the new GST return system recommended by the Council?

A: The new GST return system will have the following features:

Monthly return for small taxpayers with turnover up to Rs 5 crore
Quarterly return for taxpayers with turnover above Rs 5 crore
Auto-population of input tax credit and liability based on invoices uploaded by the supplier
Option to file Nil return by SMS
Option to file Quarterly Return Monthly Payment (QRMP) scheme by small taxpayers

Q: What are the changes in GST rates recommended by the Council?

A: The Council has made the following changes in the GST rates:

Reduction in GST rate on goods and services used for Covid-19 treatment from 12% to 5%
Extension of GST exemption on specified Covid-19 related goods till 31st March 2022
Rationalization of GST rates on textiles and textile products

Q: How will the late fee for delayed filing of GST returns be rationalized?

A: The late fee for delayed filing of GST returns will be rationalized based on the taxpayer's turnover.

Q: What is the purpose of simplifying the process for claiming GST refunds for inverted duty structure?

A: The simplification of the process for claiming GST refunds for inverted duty structure is expected to provide relief to taxpayers who face difficulties in claiming such refunds due to complex procedures and documentation requirements.

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