The outcome of the 42nd GST Council meeting, held today through video conferencing is as follows:
- The CG shall disburse the compensation cess collection, amounting to ₹ 20,000 crores, to the states tonight towards the revenue loss for FY 2020-21. Moreover, the states’ share of IGST collection of FY 2017-18, amounting to approx. ₹ 25,000 crores, shall also be disbursed by next week.
- Taxpayers with aggregate turnover < ₹ 5 crores shall be allowed to file returns (both FORM GSTR – 1 and FORM GSTR – 3B) on a quarterly basis from January, 2021 onward. However, such taxpayers will have to pay at least 35% of the net cash tax liability of the last quarter in the first 2 months of a quarter using an auto-generated challan, and adjust the difference in the 3rd month of the quarter while filing the return.
- The requirement for declaring HSN codes/ SAC in tax invoices and FORM GSTR – 1 has been revised w.e.f. 01 April, 2021 as follows –
- Taxpayers with aggregate turnover > ₹ 5 crores – 6 digits
- Taxpayers with aggregate turnover =< ₹ 5 crores – 4 digits
- For certain class of supplies to be notified later – 8 digits
- As discussed in the 39th meeting of the Council, an incremental approach was recommended to incorporate the features of the new return system in the present FORM GSTR – 1/ 3B system. The following roadmap has been recommended by the Council in this regard today –
- The present system of FORM GSTR – 1/ 3B shall be extended till 31 March, 2021 and the GST laws shall be amended to make this system as the default return filing system.
- W.e.f. 01 January, 2021 –
- Due date of furnishing quarterly FORM GSTR – 1 shall be revised to the 13th day of the succeeding month.
- Output tax liability in FORM GSTR – 3B shall be auto-populated on the basis of FORM GSTR – 1 filed by the taxpayer.
- Input tax credit in FORM GSTR – 3B of monthly filers shall be auto-populated on the basis of FORM GSTR – 2B.
- W.e.f. 01 April, 2021 –
- Input tax credit in FORM GSTR – 3B of quarterly filers shall be auto-populated on the basis of FORM GSTR – 2B.
- FORM GSTR – 1 shall be mandatorily required to be filed before FORM GSTR – 3B, in order to ensure the system of auto-population as mentioned above.
- 01 January, 2021 onwards, refund to be paid in a validated bank account linked with PAN and Aadhaar.
- DSC is no more mandatory for filing refund applications. It can be signed through Aadhaar authentication as well.
- To encourage domestic launching of satellites by young start-ups, the satellite launch services supplied by ISRO, Antrix Corporation Ltd. and NSIL would be exempted.
- Levy of compensation cess shall be extended beyond the transition period of 5 yrs. ending in June, 2022, as mentioned in the GST(CS) Act, 2017. The Act shall be amended accordingly.
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Author Of this post: CA Sumit Jalan