Key Highlights of 42nd GST Council Meeting

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Key Highlights of 42nd GST Council Meeting

42nd GST Council Meeting was held on 5th October 2020 via video conferencing mode. The key recommendations made by the GST council, during the meeting, are highlighted in the present article.

Various amendments in GST return

  • With effect from 1st January 2021, it is recommended to revise the due date for filing of quarterly Form GSTR-1 return to 13th of the month succeeding the end of the quarter.
  • Auto-generation of Form GSTR-3B based on Form GSTR-1 as under-
Particulars Basis of auto-generation Effective date
Auto-generation of tax liability Taxpayer’s own Form GSTR-1 1st January 2021
Auto-generation of Input Tax Credit Supplier’s Form GSTR-1 via new facility developed in Form GSTR-2B

1st January 2021 (for monthly filers)

1st April 2021 (for quarterly filers)

  • It is recommended to continue present Form GSTR-1 and Form GSTR-3B till 31st March 2021.
  • Recommendation for taxpayer having aggregate annual turnover less than INR 5 Crores-
    • With effect from 1st January 2021, it is recommended to allow such taxpayer (i.e. taxpayer whose annual turnover is less than INR 5 Crores) to file the return on a quarterly basis, however, tax to be discharged on monthly basis.
    • Such taxpayer would have an option, for the first two months of the respective quarter, to pay 35% of the net cash tax liability of the last quarter by using an auto-generated challan.

Amendment in requirement of declaration of HSN and SAC in invoices and Form GSTR-1

  • Following table explains the amended requirement of declaration of HSN and SAC-
Number of digits of HSN/ SAC to be declared Particulars
6 digits A taxpayer having aggregate annual turnover above INR 5 Crores.
4 digits In case of B2B supplies (for both goods and services) for taxpayer having aggregate annual turnover up to INR 5 Crores.
8 digits Notified class of supplies by all the taxpayers.

Please note HSN code is applicable for supply of goods, whereas, SAC is applicable for supply of services.

  • The above amendment will be effective from 1st April 2021.

Compensation Cess

  • It is recommended to extended Compensation Cess beyond the transition period of five years. That means the Compensation Cess will remain applicable even after 1st June 2022. Such extension will be for the period as may be required to meet up the revenue gap.
  • Compensation Cess of INR 20,000 Crores will be released to the States on 5th October 2020 against revenue loss during the year 2020-2021.

Miscellaneous recommendations

  • Incorporation of the facility to furnish NIL Form CMP-08 return via SMS.
  • From 1st January 2021, a refund will be paid or disbursed in a validated bank account which linked with the PAN & Aadhaar of the registrant.
  • The satellite launching services supplied by ISRO, NSIL and Antrix Corporation would be exempted. The exemption aims to promote domestic satellite launching specifically by young start-ups.

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CA Poonam Gandhi is a Chartered Accountant and a Lawyer. With a wide practice experience and deep understanding of different laws and taxes, she has been an independent professional writer in the field of taxation, finance and laws.