43rd GST Council Meeting — COVID Relief & Late Fee Amnesty

The 43rd Meeting (28 May 2021, Virtual) was primarily a preparatory session during India's devastating COVID-19 second wave. It focused on: (1) Compliance relief — extending deadlines, reducing late fees, waiving interest for March–May 2021; (2) Preliminary COVID rate discussions — recommending GoM review of medical goods rates (detailed decisions came in 44th meeting 2 weeks later); (3) Late fee rationalization — permanent cap of ₹500 for NIL returns and ₹2,000 for others; (4) Amnesty scheme for 1.46 Cr taxpayers with pending returns since July 2017; (5) Compensation Cess extension discussions.

The 43rd Meeting announced India's first major GST late fee amnesty: (1) SCOPE: All pending GSTR-3B returns from July 2017 to April 2021; (2) REDUCED FEES: NIL returns — ₹500 max (was unlimited), Non-NIL — ₹1,000 max per return; (3) CONDITION: Must file by 31 August 2021; (4) BENEFICIARIES: ~1.46 Cr registered taxpayers with outstanding returns; (5) PERMANENT CHANGE: Going forward, late fees capped at ₹500 (NIL) and ₹2,000 (non-NIL); (6) RATIONALE: Many small businesses had stopped filing during COVID — this brought them back into compliance. The scheme was widely used and helped reduce the return pendency backlog significantly.

The 43rd Meeting provided compliance relief (not rate changes — those came in 44th): (1) Filing extensions: GSTR-3B and GSTR-1 deadlines extended 15 days; (2) Interest reduction: 9% instead of 18% for late filing during March–May 2021; (3) E-Way Bill: Extended validity for bills that expired during lockdowns, suspended blocking of EWB generation for non-filers; (4) Oxygen concentrators: Import duty reduced to 12% retrospectively from 1 May; (5) Rate GoM: Constituted a Group of Ministers to comprehensively review all COVID medical goods — their recommendations were acted on in the 44th Meeting (12 June 2021). This was a 'bridge' meeting between policy discussions.

The 43rd Meeting DISCUSSED the extension but did NOT finalize it — that was deferred. Background: (1) States were guaranteed 14% annual growth for 5 years (2017-2022); (2) COVID caused massive shortfall (₹2.78 lakh Cr gap); (3) In FY21, Centre borrowed ₹1.10 lakh Cr and gave back-to-back loans to states; (4) For FY22, ₹1.59 lakh Cr was proposed; (5) Opposition states wanted direct compensation from Centre, not loans; (6) Final decision on extension came in the 45th (Sep 2021) and 46th (Dec 2021) meetings — Cess was extended till March 2026 to repay the loans taken during COVID.

Held on 28 May 2021 via video conferencing from New Delhi. Context: (1) India was at the peak of its catastrophic second COVID wave — daily deaths had exceeded 4,000 in early May; (2) Nationwide oxygen crisis, hospital bed shortages, and medication hoarding; (3) Multiple states were in full/partial lockdown; (4) Political pressure from opposition states for comprehensive COVID tax relief; (5) This was a 'preparatory' meeting — major rate changes were formalized 2 weeks later in the 44th Meeting (12 June). The meeting acknowledged the crisis but deferred detailed rate decisions to allow the newly constituted GoM to submit recommendations.