The 42nd GST council meeting was held on 5th October 2020 as well as on 12th October 2020. The meetings were chaired by Finance Minister Smt. Nirmala Sitharaman, Union Minister of State for Finance and Corporate Affairs Shri Anurag Thakur was also present at the meeting, besides the Finance Ministers of the states and union territories (UTs), and other senior officers of both, the Ministry of Finance and the States and UTs.<\/p>\n
After an almost 8-hour long meeting, the Council failed to reach a consensus on the issue of borrowing to make up for the compensation cess shortfall on 5th October 2020. Hence, the Council met up again on 12 October 2020 to resolve compensation issues for the states.<\/p>\n
The GST Council, in its 42nd meeting held on 05.10.2020, has made the following recommendations:<\/p>\n
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- Levy of Compensation Cess to 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.<\/li>\n
- Centre is releasing compensation of ? 20,000 crore to States today towards loss of revenue during 2020-21 and an amount of about ? 25,000 crore towards IGST of 2017-18 by next week.<\/li>\n
- Enhancement in features of return filing: <\/strong>In its 39th Meeting held in March 2020, the Council had recommended an incremental approach to incorporate features of the new return system in the present familiar GSTR-1\/3B scheme. Various enhancements have since been made available on the GST Common Portal. With a view to further enhance Ease of Doing Business and improve the compliance experience<\/strong>, the Council has approved the future roadmap for return filing under GST. The approved framework aims to simplify return filing and further reduce the taxpayer’s compliance burden in this regard significantly<\/strong>, such that the timely furnishing of details of outward supplies (GSTR-1) by a taxpayer and his suppliers would – (i) allow him to view the ITC available in his electronic credit ledger from all sources i.e. domestic supplies, imports and payments on reverse charge etc. prior to the due date for payment of tax, and (ii) enable the system to auto-populate return (GSTR-3B) through the data filed by the taxpayer and all his suppliers. In other words, the timely filing of GSTR-1 statement alone would be sufficient as the return in FORM GSTR-3B would get auto prepared on the common portal. To this end the Council recommended \/ decided the following:\n <\/li>\n<\/ul>\n<\/div>\n
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a. Due date of furnishing quarterly GSTR-1 by quarterly taxpayers to be revised to 13th of the month succeeding the quarter w.e.f. 01.1.2021<\/strong>;
\n b.
\n Roadmap for auto-generation of GSTR-3B from GSTR-1s by:<\/p>\n\n
i. Auto-population of liability from own GSTR-1 w.e.f. 01.01.2021<\/strong>; and
\n ii.
\n Auto-population of input tax credit from suppliers GSTR-1s through the newly developed facility in FORM GSTR-2B for monthly filers w.e.f. 01.01.2021 <\/strong>and for quarterly filers w.e.f. 01.04.2021<\/strong>;<\/p>\n<\/blockquote>\nc. In order to ensure auto population of ITC and liability in GSTR 3B as detailed above, FORM GSTR 1 <\/strong>would be mandatorily required to be filed before FORM GSTR3B <\/strong>w.e.f. 01.04.2021.
\n d.
\n 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\/3B return filing system as the default return filing system.<\/strong><\/p>\n<\/blockquote>\n<\/li>\n- \n
As a further step towards reducing the compliance burden particularly on the small taxpayers having aggregate annual turnover < Rs. 5 cr., <\/strong>the Council’s earlier recommendation of allowing filing of returns on a quarterly basis with monthly payments <\/strong>by such taxpayers to be implemented w.e.f. 01.01.2021<\/strong>. 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 last quarter using an auto generated challan.<\/div>\n<\/li>\n- \n
Revised Requirement of declaring HSN for goods and SAC for services in invoices and in FORM GSTR-1 w.e.f. 01.04.2021 <\/strong>as under:<\/strong>\n <\/div>\n\n
a. HSN\/SAC at 6 digits for supplies of both goods and services for taxpayers with aggregate annual turnover above Rs. 5 crores;
\n b.
\n HSN\/SAC at 4 digits for B2B supplies of both goods and services for taxpayers with aggregate annual turnover upto Rs. 5 crores;
\n c. Government to have power to notify 8 digit HSN on notified class of supplies by all taxpayers.<\/p>\n<\/blockquote>\n<\/li>\n- \n
Amendment to the CGST Rules: <\/strong>Various amendments in the CGST Rules and FORMS have been recommended which includes provision for furnishing of Nil FORM CMP-08 <\/strong>through SMS.<\/div>\n<\/li>\n- \n
Refund to be paid\/disbursed in a validated bank account linked with the PAN & Aadhaar of the registrant w.e.f. 01.01.2021.<\/div>\n<\/li>\n- \n
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.<\/div>\n<\/li>\n<\/ul>\nHighlights of the 42nd GST Council Meet (Held on 12 October 2020)<\/strong> <\/p>\n
![\"\"](\"https:\/\/klickongstworld.com\/blog\/wp-content\/uploads\/2022\/02\/clip_image006.jpg\")
\n Union Finance Minister Nirmala Sitharaman and MoS Finance Anurag Thakur address the GST Council meeting, in New Delhi on October 12, 2020.<\/p>\n\n- \n
- The 43rd GST Council meeting ended with no unanimity on the borrowing issue. Hence, no conclusion was reached. The states may go ahead with borrowing funds as per the options previously given.<\/li>\n
- The levy of compensation cess will continue beyond the 5-year period, as was announced in the 42nd GST Council meeting.<\/li>\n
- The centre will not be able to borrow funds to meet the compensation cess shortfall as this will result in an increase in the yield on G-sec bonds.<\/li>\n
- The Finance Minister explained that the Centre has issued a borrowing calendar, and if it goes beyond it to borrow, the G-Sec deals used as a benchmark for every other borrowing will go up. This will increase the borrowing costs for states and the private sector as well.<\/li>\n
- It was also clarified in the press briefing that the cess collected July 2022 onwards will not be disbursed to the states and the same will be utilised solely for the purpose of repayment of interest and principal. Hence, there will be no burden on the states regarding repayment of the borrowings made.<\/li>\n<\/ol>\n<\/div>\n
Encl :<\/strong><\/p>\n
1. Agenda Volume 1<\/a><\/strong>, Volume 2<\/a><\/strong>,Volume 3<\/a><\/strong>,Volume 4<\/a><\/strong>,Volume 5<\/a><\/strong>
\n 2. Press Release<\/a><\/strong>
\n 3. Press Meeting – 05.10.2020<\/a><\/strong>
\n 4. Press Meeting – 12.10.2020<\/a><\/strong>
\n 5. Minutes of the meeting<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"2022\/02\/clip_image003.jpg<\/p>\n","protected":false},"author":1,"featured_media":648,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"_links":{"self":[{"href":"https:\/\/www.klickongstworld.com\/blog\/wp-json\/wp\/v2\/posts\/599"}],"collection":[{"href":"https:\/\/www.klickongstworld.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.klickongstworld.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.klickongstworld.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.klickongstworld.com\/blog\/wp-json\/wp\/v2\/comments?post=599"}],"version-history":[{"count":37,"href":"https:\/\/www.klickongstworld.com\/blog\/wp-json\/wp\/v2\/posts\/599\/revisions"}],"predecessor-version":[{"id":7416,"href":"https:\/\/www.klickongstworld.com\/blog\/wp-json\/wp\/v2\/posts\/599\/revisions\/7416"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.klickongstworld.com\/blog\/wp-json\/wp\/v2\/media\/648"}],"wp:attachment":[{"href":"https:\/\/www.klickongstworld.com\/blog\/wp-json\/wp\/v2\/media?parent=599"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.klickongstworld.com\/blog\/wp-json\/wp\/v2\/categories?post=599"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.klickongstworld.com\/blog\/wp-json\/wp\/v2\/tags?post=599"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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