Highlights of 42nd GST Council Meeting dated 5th October, 2020
Looking for the updates of the 42nd GST Council Meeting? Here are the most important ones-
Table of Content
The 42nd GST council meeting was held on 5th October, 2020 under the chairmanship of Finance minister Smt. Nirmala Sitharaman through video conferencing. The meeting was also attended by Union Minister of State for Finance & Corporate Affairs Shri Anurag Thakur besides Finance Ministers of States & UTs and senior officers of the Ministry of Finance& States/ UTs. Let us have a look at the outcome of the 42nd GST Council Meeting Held on 5th October, 2020.
Extension of Compensation Cess lavy
It was decided in 42nd GST Council meeting that the Levy of Compensation Cess will be extended beyond the transition period of five years i.e. beyond June, 2022, for such period as may be required to meet the revenue gap. Further details to be worked out.
GSTR 1 and GSTR 3B for Taxpayer with turnover below 5 Crore
- The 42nd GST Council meeting decided to revise the due date of furnishing quarterly GSTR-1 by quarterly taxpayers to 13th of the month succeeding the quarter effective from January 1, 2021.
- From January 1, 2021, taxpayers with less than Rs 5 crore annual turnover will not be required to file monthly GSTR-1 and GSTR-3B returns. Instead, they will now do it on a quarterly basis.
- However, Such quarterly taxpayers would, for the first two months of the quarter, have an option to pay 35% of the net cash tax liability of the previous quarter, using an auto-generated challan.
Road-map for auto-generation of GSTR-3B from GSTR-1
- With a view to further enhance Ease of Doing Business and improve the compliance experience, the Council has approved the future roadmap for return filing under GST.
- A roadmap has been prepared for the auto-generation of GSTR-3B, where the ITC will be auto-populated from the supplier’s GSTR-1, and the tax liability will be auto-populated from the business’ GSTR-1.
- However, to achieve this, the GSTR-1 should be filed mandatorily before filing GSTR-3B w.e.f. 01.04.2021.
- The approved framework aims to simplify the return filing and further reduce the taxpayer’s compliance burden in this regard.
- The present GSTR-1/3B return filing system to be extended till 31.03.2021 and the GST laws to be amended to make the GSTR-1 & GSTR 3B return filing system as the default return filing system.
Requirement of declaring HSN for goods and SAC for services
- HSN for goods and SAC for services in invoices and in FORM GSTR-1 e.f. 01.04.2021, the taxpayers with turnover exceeding Rs 5 crore, HSN code up to 6 digits must be mentioned.
- For turnover less than Rs 5 crore, HSN code up to 4 digits need to be mentioned for B2B supplies for both goods and services.
- For notified classes of goods and services, 8 digits will need to be mentioned.
Amendment to the CGST Rules
- All taxpayers will continue to pay GST dues monthly through a simple challan.
- A NIL CMP-08 will be allowed to be filed through an SMS.
- Refund to be paid/disbursed in a validated bank account linked with the PAN & Aadhaar of the registrant w.e.f. 01.01.2021.
- Aadhaar authentication facility (with OTP) is now allowed for refund applications. This discourages taxpayers from misusing the system.
- To encourage domestic launching of satellites particularly by young start-ups, the satellite launch services supplied by ISRO, Antrix Corporation Ltd. and NSIL would be exempted.
Apart from this, in the 42nd GST Council Meeting, it was announced that the Center will release compensation of Rs 20,000 crore to States today towards loss of revenue during 2020-21 and an amount of about Rs 25,000 crore towards IGST of 2017-18 by next week.
However, The 42nd GST Council again was unable to come to a consensus on the compensation borrowing options. The same will further be discussed in the next meeting which will be the Extended 42nd GST Council meeting which is Scheduled to be held on 12.10.2020.
Hope this article was helpful. Refer to the topics discussed in the 41st GST Council meeting.