The 42nd GST Council Meeting was held on October 5th, 2020 chaired by Union Finance Minister Nirmala Sitharaman, via video conferencing. The meeting was attended by Shri. Anurag Thakur, Union Minister of State for Finance & Corporate Affairs besides Finance Ministers of States & UTs and Senior officers from Union Government & States.
In the last meeting i.e. the 41st GST council meeting, Centre had given two borrowing options to States to meet GST compensation requirement for the current financial year.
Highlights of 42nd GST Council Meeting
1. Compensation Cess:
GST Council decides to extend Compensation Cess levy beyond June 2022. Compensation of ₹ 20,000 crores to be released to States towards loss of revenue during 2020-21. Additionally, an amount of approx ₹ 25,000 CR towards IGST of 2017-18 to be released in the coming week.
The GST Council will meet on October 12 to further deliberate on compensating states for GST cess shortfall.
2. GST Returns Filing – Enhancements and Process Streamlining:
The 39th GST Council Meeting acknowledged the necessity for simpler GST reporting, especially for small taxpayers. It was decided to incrementally fix the current filing system, introduce enhancements wherever necessary and streamline for an efficient reporting system. Various enhancements have since been made available on the GST Common Portal including filing NIL GSTR 3B via SMS and form GSTR 2B etc.
The Council today has approved a future roadmap for efficient GST Return filing. Following are the key highlights from the roadmap:
- 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
- Roadmap for auto-generation of GSTR-3B from GSTR-1 by:
- Auto-population of liability from own GSTR-1 w.e.f. 01.01.2021; and
- Auto-population of the input tax credit from suppliers’ GSTR-1 through the newly developed facility in the FORM GSTR-2B for monthly filers w.e.f. 01.01.2021 and for quarterly filers w.e.f. 01.04.2021;
- In order to ensure auto-population of ITC and liability in GSTR 3B as detailed above, FORM GSTR 1 mandatorily required to be filed before FORM GSTR 3B from 01.04.2021 onwards.
- The present GSTR 1 and GSTR 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.
3. Small Taxpayers GST Compliance
To reduce the compliance burden of small taxpayers having an aggregate annual turnover of less than ₹ 5 crores, GST Council had earlier suggested quarterly return filing with monthly tax payment. Same has been accepted today. It will be implemented from 01 Jan 2021. The number of returns comes down from 24 monthly returns to 8 returns, from January 2021.
4. HSN Declaration
A revised Harmonised System Nomenclature (HSN) System for Goods and Service Accounting Code (SAC) to be introduced from 01.04.2021. Following are the recommendations:
- 6 digits HSN/SAC Code to be used by businesses for supplies of both goods and services for taxpayers with aggregate annual turnover above Rs. 5 crores.
- 4 digits HSN/SAC Code for B2B supplies of both goods and services for taxpayers with aggregate annual turnover up to Rs. 5 crores.
- Special 8 digit HSN/SAC Code – Power to introduce the same on the notified class of supplies by all taxpayers lies with the Government.
5. Nil CMP-08
Various amendments in the CGST Rules and FORMS have been recommended which includes provision for furnishing of Nil FORM CMP-08 through SMS.
6. GST Exemption
To encourage the domestic launching of satellites particularly by young start-ups, the satellite launch services supplied by ISRO, Antrix Corporation Ltd., and NSIL would be exempted from GST.
7. GST Refunds Claim
Refunds will be given only in bank account validated with PAN and Aadhaar details from 1 January 2021.
Expectations from 42nd GST Council Meeting
The 42nd GST Council meeting is expected to mainly focus on reviewing the options provided by the central government in which it allowed states to borrow funds either from RBI or from the market. Some states may ask to put in place a dispute resolution mechanism to address the contentious in GST.
As per the recent tweet of CNBC-TV18, the Government Sources says GST Council likely to exempt satellite launch services from GST move to encourage private Indian enterprises to launch satellite through Indian satellite launch facilities. Sources reveal that GST Council may reject the proposal to reduce rates on ayurvedic hand sanitizers from 18% to 12%.
- GST Council likely to exempt satellite launch services from GST
- Move to encourage private Indian enterprises to launch satellite via Indian satellite launch facilities
- Fitment Committee in favour of exempting GST on satellite launch svcs supplied by ISRO, Antrix/NSIL
- Fitment Committee unable to assess revenue loss as no satellites belonging to Indian private entrepreneurs has been launched so far.
To read our coverage on the previous Council Meet decisions, you may refer here:
- 41st GST Council Meeting
- 40th GST Council Meeting
- 39th GST Council Meeting
- 38th GST Council Meeting
- 37th GST Council Meeting
- 36th GST Council Meeting
Other GST Council Meeting
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Nicely drafted
Ma’am I have an question can gst audit details need to be considered while filling income tax audit.
Yes, you need to reconcile the values reported in GST Returns and values reported in Income Tax returns
ma’am
My questions was about income tax audit
Do we have to give gst detail when performing income tax audit. Like gst registeration details , gst audit details on 3cd like we used to give in service tax , central excise exy
Implementation of changes relating to two new reporting requirements under ‘clause 30C pertaining to GAAR’ and ‘clause 44 pertaining to GST have been relaxed from reporting while furnishing Form 3CD during 20 Aug. 2018 to 31 March 2021 effectively.
However GST Registration number is required to be provided
And Clause 44 : Clause attempts to provide a break-up of the total expenditure into various fields that are relevant from the GST stand point viz. expenditure in relation to exempt goods / services, payments to entities under the Composition Scheme, Payments to entities not registered under GST etc. This schedule is similar Income Tax return forms to be filled up by those not liable for tax audit.