Summary of Points Finalized in the Meeting

1. Review of Revenue Position

The Council reviewed GST revenue trends, noting a decline due to the COVID-19 pandemic. Total GST collection for 2019–20 was ₹12.22 lakh crore, but only ₹94,323 crore was collected in April–May 2020–21. Compensation cess collected till April 2020 was ₹2.54 lakh crore, with ₹2.46 lakh crore released to States. A balance of ₹8,013 crore remained in the compensation fund. The issue of ₹1.76 lakh crore of un-apportioned IGST from 2017–18 was discussed, and it was agreed that the Group of Ministers (GoM) chaired by the Deputy CM of Bihar would finalize settlement details. 40th GSTC Minutes, page 11

2. Compensation to States

Many States requested immediate release of pending GST compensation and suggested borrowing mechanisms to address the shortfall. The Council acknowledged that GST compensation should continue, possibly through market borrowing and extending the compensation cess period beyond the original five years. 40th GSTC Minutes, page 24

3. IGST Settlement Issue (2017–18)

It was decided that detailed calculations of IGST distribution and reversals would be prepared and presented to the GoM. The Council noted that some States might need to refund excess amounts while others would receive additional funds. The GoM was instructed to expedite its report for approval in the next Council meeting. 40th GSTC Minutes, page 23

4. Amendments Recommended by the Law Committee

Approval to amend CGST Rules to prescribe rates under Section 10(2A) for the Composition Scheme.

Extension of the time limit for revocation of cancellation of registration through a “Removal of Difficulty” order.

Notification of provisions of the Finance Act, 2020, amending various sections of CGST and IGST Acts.

Reduction of late fees and interest for small taxpayers (turnover up to ₹5 crore) for May–July 2020.

One-time amnesty for reduction in late fees for GSTR-3B returns (July 2017–January 2020) to clean up return backlogs. 40th GSTC Minutes, page 1

5. Other Key Decisions

Ratification of notifications, circulars, and orders issued by the Central Government between meetings.

Approval of creation of State and Area Benches of the Goods and Services Tax Appellate Tribunal (GSTAT) for Uttar Pradesh.

Review and acceptance of the National Anti-Profiteering Authority’s (NAA) quarterly report (January–March 2020).

Agreement to share GST data with the Comptroller and Auditor General (C&AG) for audit purposes. 40th GSTC Minutes, page 2

6. Inverted Duty Structure

The Council acknowledged the issue of inverted duty structure on certain key sectors and agreed to review rates for correction in upcoming meetings. 40th GSTC Minutes, page 2

7. Next Meeting

It was agreed that the 41st GST Council Meeting would be convened soon to finalize compensation arrangements and review revenue implications post-lockdown. 40th GSTC Minutes, page 2