Relief for Taxpayers: GST Council Announces Waiver of Interest and Penalties

In a significant move aimed at providing relief to taxpayers, the Goods and Services Tax (GST) Council, chaired by Union Finance Minister Nirmala Sitharaman, has announced the waiver of interest and penalties on certain tax demand notices. This decision is expected to benefit a wide range of stakeholders, including traders, MSMEs, and the general public.

Key Highlights:

Waiver of Interest and Penalties

The GST Council has recommended the waiver of interest and penalties for demand notices issued under Section 73 of the GST Act for the financial years 2017-18, 2018-19, and 2019-20. This waiver is conditional on the taxpayer paying the full amount of tax demanded in the notice by March 31, 2025.

Expansion of Input Tax Credit Eligibility

The Council has also recommended that the time limit to avail input tax credit in respect of any invoice or debit note under Section 16(4) of the CGST Act be deemed to be from 2011 to 2021 for the financial years 2017-18 to 2020-21. This is a retrospective change effective from July 1, 2017.

Reduction in Litigation

To reduce tax litigation, the GST Council has recommended minimum limits for filing appeals - Rs. 20 lakh for the appellate tribunal, Rs. 1 crore for the High Court, and Rs. 2 crore for the Supreme Court.

Taxpayer-Friendly Measures

The Council has also introduced several other taxpayer-friendly measures, such as:

• Exemption from GST for hostel accommodation services up to Rs. 20,000 per person per month, provided the service is for a minimum continuous period of 90 days.
• Allowing taxpayers to correct omissions or mistakes in their GSTR-1 filings through a new form, GSTR-1A.
• Extending the due date for filing GSTR-4 (for composition taxpayers) from April 30 to June 30.

Combating Fake Input Tax Credit Claims

To address the issue of fraudulent input tax credit claims, the GST Council has decided to introduce a biometric-based Aadhaar authentication system.

These decisions by the GST Council are aimed at facilitating trade, providing relief to taxpayers, and enhancing transparency in the GST system. The measures are expected to benefit a wide range of stakeholders, including traders, MSMEs, and the general public.

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