GST Council waives off interest, penalty on retrospective notices for 2017-2020

The Goods and Service Tax (GST) Council in its 53rd meeting on June 22 waived off interest and penalty on tax demand notices for the period 2017-2020, provided the assessees pay the tax by March 31, 2025, Finance Minister Nirmala Sitharaman said.

“The Council recommended waiving off the interest and penalty for cases that fall under section 73,” Sitharaman said at a press briefing.

The next Council meeting will be held in August, she added.

Biometric authentication

In order to plug the loophole of fake invoicing, the Council also approved pan-India roll out of Aadhaar-based biometric authentication for assessees, which will be implemented immediately in a phased manner.

Rate rationalisation

The Group of Ministers (GoM) on rate rationalisation is now chaired by Bihar Deputy Chief Minister Samrat Choudhary, who will give a presentation before the Council in its next meeting, Sithraman said.

GST on fertilisers

The fitment committee had suggested exempting fertilisers from GST due to inverted duty structure. The Council has decided to form a group of ministers to deliberate on the issue and suggest future course of action.

“These recommendations reflect the government’s continued commitment to reducing the compliance burden, promoting the ease of doing business through facilitative measures, and fostering a more business-friendly environment. These decisions, in addition to other recommendations, collectively, constitute a welcome stride towards clarity and relief for the taxpayer community. However, the absence of resolutions on rate rationalization and clarity on reliefs sought by the online gaming and fertiliser industries leaves avenues for future deliberation and sets up hopes on the forthcoming budget to address these crucial areas,” Krishan Arora, Partner, Grant Thornton Bharat, said.

GST notices

The Finance Minister also assured the GST assessees that the government is working towards increasing ease of compliance for the taxpayers. Against the perception, the GST notices sent by the Centre constitute even less than 2 percent of the total active taxpayers, she said.

“Of all the active tax assessees, only 1.96 percent have been sent GST notices from Center till December 31, 2024. Only 1,14,939 assessees have received tax notices from central GST,” she added.

GST Cess

The repayment of the back-to-back loan of Rs 2.69 lakh crore taken to compensate states for revenue loss during the COVID-19 pandemic will extend beyond March 31, 2025, against earlier expectations, she said. “The loan repayment will be done sometime after March 31, 2025 but before March 31, 2026,” she added.

The Council will have to discuss and decide what is to be done with cess once the loan repayment is complete.

Fuel under GST

Sitharaman said that the Centre remains committed to bringing petrol, diesel, and aviation turbine fuel (ATF) under the ambit of GST.

“The states just need to decide the GST rate to be applicable on fuel. No amendment will be needed to bring it under the GST as the Act already provides for it,” she said.

Pre-Budget meet with state ministers

Earlier in the day on June 22, Sitharaman held a pre-budget meeting with all the state ministers. The states have sought an increase in the interest free capex loan allocation in the upcoming Union Budget, she said. The interim Budget had allocated Rs 1.30 lakh crore for FY25.

Source: moneycontrol