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The 38th GST Council Meeting - Highlights

GST is Goods and Service Tax. GST is known as the Goods and Services Tax. It is an indirect tax which has replaced many indirect taxes in India such as the excise duty, VAT, services tax, etc. The Goods and Service Tax Act was passed in the Parliament on 29th March 2017 and came into effect on 1st July 2017.GST is a single domestic indirect tax law for the entire country.

An item goes through multiple change-of-hands along its supply chain: Starting from manufacture until the final sale to the consumer.Consider goods manufactured in Delhi and sold to the final consumer in Mumbai. Since the Goods and Service Tax is levied at the point of consumption, the entire tax revenue will go to Mumbai and not Delhi. There is a whole history of how GST bill finally passed in 2017.

There are three taxes applicable under this system: CGST, SGST & IGST.

  • CGST : It is a tax charged on intrastate supply of goods and services by the central government and is governed by the CGST Act, 2017. And, SGST is a tax component applied to the same intrastate supplies by the state government.

  • IGST: It is a tax charged on all the interstate supplies of goods and services and is governed by the IGST Act, 2017. The IGST collected is shared equally between the central government and state government.

  • SGST: When SGST is being introduced, the present state taxes of State Sales Tax, VAT, Luxury Tax, Entertainment tax (unless it is levied by the local bodies), Taxes on lottery, betting and gambling, Entry tax not in lieu of Octroi, State Cesses and Surcharges in so far as they relate to supply of goods and services etc. are subsumed into one tax in GST called State GST.

The implementation of GST in the country has brought about significant changes across several industries.The 38th GST Council meeting was held on 18th of December 2019 and was chaired by Union FM Nirmala Sitharaman, Minister of state for finance Anurag Thakur, Goa Chief Minister Pramod Sawant,Panchayat Mauvin Godinho who is nominated a member of Goa for GST Council.

Here are some highlights of the Summit:

  • Due dates extended for GSTR-9 and GSTR-9C for FY 2017-18 till 31 January 2020: The due date of GSTR-9 and GSTR-9C were extended further till 31 January 2020 from the earlier date of 31 December 2019. It was done to allow more time for taxpayers to use the offline tool of GSTR-9C that is expected to be made available on 21 December 2019.

  • Following measures would be taken to improve filing of FORM GSTR-1: (i) waiver of late fee to be given to all taxpayers in respect of all pending FORM GSTR-1 from July 2017 to November 2019, if the same are filed by 10.01.2020.

(ii) E-way Bill for taxpayers who have not filed their FORM GSTR-1 for two tax periods shall be blocked.

  • The Council also considered the rate of GST rate on Woven and Non-Woven Bags and sacks of polyethylene or polypropylene strips or the like , whether or not laminated, of a kind used for packing of goods ( HS code 3923/6305) in view of the requests received post the changes recommended on such goods in last meeting and recommended to raise the GST to a uniform rate of 18%(from 12%) on all such bags falling under HS 3923/6305 including Flexible Intermediate Bulk Containers (FIBC). This change shall become effective from 1st January, 2020.

  • The GST council meeting decided to levy 28% tax on lotteries. Its date of applicability is 1st March 2020. It was earlier taxed at 12% for State-owned lotteries and 28% for State authorized lotteries.

  • In the GST council meeting, the Council came up with a measure to improve the filing of GSTR-1 by proposing that the E-Way bills will be blocked for the taxpayers who have not filed their forms for two consecutive tax periods. Grievance Redressal Committees to be set up to address taxpayer grievance.

  • Sh. Sushil Kumar Modi who was the Convenor of GoM on revenue augmentation made a presentation to the GST Council on the issue of revenue, GST rate structure and compensation needs of the States. The issues covered in presentation were:

  • for encouraging voluntary compliance

  • for expanding tax base

  • to improve return filing and tax collection

  • for rate rationalisation

  • Of automating various aspects like e-invoice, new return system, QR code on bills etc.

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