GST Council Meeting Offers Relief and Streamlines Compliance for Taxpayers


The 53rd meeting of the GST Council, held on Saturday, provided a sigh of relief for taxpayers struggling with GST compliance. The Council announced a slew of measures aimed at simplifying the framework, reducing litigation, and easing the financial burden on businesses.

Taxpayer Relief Measures Take Center Stage

A key takeaway for many businesses is the waiver of interest and penalty on tax dues from the 2017-18, 2018-19, and 2019-20 tax years. This relief is conditional, with full tax payment required by March 31, 2025. Additionally, the Council extended the time limit for availing input tax credit on invoices and debit notes filed up to November 30, 2021, for financial years 2017-18 to 2020-21. This provides much-needed flexibility for businesses facing challenges in claiming credits.

The Council further recognized the cash flow challenges faced by businesses by reducing the pre-deposit amount required to file appeals under GST. This will make contesting disputed assessments less financially burdensome. Filing deadlines were also relaxed, with the due date for filing GSTR-4 form for composition taxpayers extended from April 30 to June 30 of the following financial year. Additionally, the Council clarified that interest on delayed filing of returns will not be levied on the amount available in the Electronic Cash Ledger (ECL) on the due date of filing the return.

Focus on Trade Facilitation and Dispute Resolution

The Council also aimed to streamline trade facilitation and reduce unnecessary litigation. It recommended setting monetary limits for filing appeals by the department before different courts. This aims to curb frivolous lawsuits and encourage a more measured approach to disputes. Additionally, the Council issued much-needed clarifications on various GST aspects such as valuation of services, applicability of input tax credit, and place of supply. This clarity will help businesses comply more effectively and avoid unintended tax implications.

Furthermore, the introduction of the optional form GSTR-1A allows taxpayers to amend details in GSTR-1 before finalizing GSTR-3B. This flexibility helps prevent errors and simplifies the filing process. Recognizing the administrative burden on smaller businesses, the Council exempted those with an annual turnover up to Rs 2 crore from filing the annual return in GSTR-9/9A for FY 2023-24.

Boosting Transparency and Addressing Anti-profiteering Concerns

The Council acknowledged the issue of fake input tax credit claims and proposed a pan-India rollout of Aadhaar authentication for the registration process. This biometric-based verification is expected to enhance transparency and deter fraudulent activities.

To address concerns regarding anti-profiteering measures, the Council proposed a sunset clause of April 1, 2025, for receiving new anti-profiteering applications under GST. This suggests a potential shift towards a more settled GST regime with less focus on retroactive price controls.

Additional Measures for Improved Compliance

The Council further tightened compliance by lowering the threshold for reporting B2C inter-State supply invoices in GSTR-1 from Rs 2.5 lakh to Rs 1 lakh. This expands the scope of reporting and potentially improves tax collection. Additionally, businesses required to deduct tax at source under GST will now need to file the GSTR-7 form mandatorily every month, even if no tax was deducted. This ensures a more comprehensive record of tax liability.

The 53rd GST Council meeting’s recommendations are a positive step towards a more taxpayer-friendly and efficient GST system. The measures aim to simplify compliance, reduce litigation, and provide relief for businesses, particularly smaller entities. While the long-term impact remains to be seen, these changes are expected to improve the ease of doing business and boost economic activity.

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