On 5th October 2020 the 42nd GST council meeting was led by the honorable finance minister Smt. Nirmala Sitharaman. It was conducted over video conferencing. Union Minister of State for Finance andamp; Corporate Affairs Shri Anurag Thakur too had attended the meeting along with state finance ministers and other senior ministers. The following aspects were decided to post completion of the meeting.
It was decided about extension of Levy of Compensations crossing the five-year transition phase.
GSTR 1 and GSTR 3B for those taxpayers having turnover below 5 Crore
1- It was decided to modify the date of fulfilling quarterly GSTR 1 to 13th of the concerned month of the following quarter from 1st January 2021.
2- No need to file monthly GSTR-1 and GSTR-3B return by those with yearly turnover under 5 crore INR it has to be done quarterly. For initial couple of months, the taxpayers will be having option of paying 35 percent of gross tax liability in cash of earlier quarter through automated challan.
Opening way for auto-generation of GSTR-3B from GSTR-1
1- The council has approved future aspects of GST return filing.
2- There is a roadmap for GSTR-3B auto-generation. Here the UTC is going to be auto propagated from the GSTR-1 of the supplier. Through GSTR-1 of the business the tax liability has to be auto propagated as well.
3- GSTR-1 is essential to be filed before filing GSTR-3B effectively on 4th April 2021.
4- Current GSTR-1/3B return filing model is set to be scheduled till 31.03.2021 and the GST laws to be set for turning the GSTR-1 andamp; GSTR 3B return filing system as the default option for return filing.
Conditions for HSN for goods and SAC for services declaration
1- HSN for goods and SAC for services in invoices and within the FORM GSTR-1 is effective from 4th April 2021 for over 5 crore turnover it must have a six-digit HSN code specified.
2-HSN code of 4 digit is essential to be specified for both goods and services for turnover under 5 crore.
3- For explicit good and services class it is essential to specify 8 digits.
Modification to the CGST Rules
1- Taxpayers will keep on paying monthly GST dues monthly through regular challan.
2- A NIL CMP-08 is acknowledged for filing through an SMS.
3- Refund has to be made through authorized bank account having PAN andamp; Aadhaar connection it will be effective from 1st January 2021.
4- Aadhaar authentication facility along OTP is currently accepted for refund purpose
Satellite launch services provided by ISRO Antrix Corporation Ltd. and NSIL were decided to be relaxed to encourage taxpayers.
It was decided that Center will be allowed a compensation amount of 20,000 crore INR to States for compensating loss of revenue during 2020-21 and INR 25,000 crore towards IGST of 2017-18 by upcoming week. However the 42nd GST Council again was unable to consent to the option of compensation borrowing.
So now provided below are the highlighting aspects of the GST council meeting that was taken place on 12th October 2020.
Key excerpts of the GST Council meeting on 12th October 2020
1- Finance Minister Sitharaman particularly specified about no consensus being made in the last meeting regarding borrowing aspects to fill in the shortfalls of compensations.
2- She also stated that this is the first time for the Council to discuss the compensation cess to compensate shortfall. Center had provided a couple of borrowing options for the states before.
3- According to Smt. Sitharaman, the Centre has come up with a borrowing calendar, and in case it goes beyond the same for borrowing the G-Sec deals meant as a standard for all other borrowings will move up. This is going to boost the borrowing expense for the states as well as for the private sector.
4- Finance Minister Nirmala Sitharaman has declared that government employees can obtain a cash voucher for LTC upon not traveling due to a pandemic.
5- The finance minister also declared about a 50-year loan amount of Rs 1,600 crore, free of interest for north-eastern states along with 900 crore INR of similar loans for Himachal Pradesh and Uttarakhand.
6- The entire sum has to be expended by 31st March 2021.
7- 7,500 crore INR loans have been allowed for other states as per their share in the Finance Commission evolution.
In the end the Finance Minister said that The GST Council has been cordial enough to accept an extension of the cess beyond 5 years for repayment of the principal and interest. The finance minister confirmed that the whole amount would be paid.