Today on 5th October 2020, GST Council Meeting was held. Though the meeting was in news due to the deadlock between the Centre and States regarding GST Compensation dues to be paid to states. Although the issue was still not resolved even after a long overhaul at the meeting table, still there were other important decisions taken in the meeting.
Let’s discuss the highlights of 42nd GST Council Meeting on 05th October 2020.
Major Relief has been announced for small taxpayers
Taxpayers with Aggregate Annual Turnover of less than 5 Crores would not be required to file monthly returns of GSTR3B and GSTR 1 from 01-Jan-21 onwards. Instead of that taxpayers would be required to file Returns on Quarterly Basis. Tax Payment would be done on monthly basis by way of Challans.
HSN /SAC Codes now being made mandatory
The other important decision was regarding HSN Codes being made mandatory. From 1st April 2021 Taxpayers with Turnover more than 5 crores shall mention 6 Digits HSN /SAC Code on all Invoices. While the Taxpayers with Turnover less than 5 crores shall have to mention 4 Digits HSN /SAC Code on B2B Invoices.
Refunds
It has also been decided in 42nd GST Council meeting that from 01st January 2021, Refund shall be paid in a validated Bank Account which is linked with PAN and Aadhaar Number of the applicant.
This help in avoiding making payment to bogus companies.
Regarding Composition dealers
Amendment Proposed to allow the filing of NIL CMP-08 return through SMS facility similar to the one being deployed currently in the case of GSTR 3B/ GSTR-1.
CMP-08 is a quarterly return to be filed by those taxpayers who are registered under composition scheme
GSTR 3B would soon be auto-populated
GST Council is planning to make GSTR 3B return an auto populated one. Output liability of the return is to be auto populated from GSTR 1 which a registered person would have already filed.
ITC details in GSTR 3B return would be auto populated from the newly introduced GSTR 2B which would in turn be generated from GSTR 1 of suppliers.
It would be also made mandatory for taxpayers to file their GSTR 1 before GSTR 3B. This will help in auto-populating ITC and Output liability in GSTR 3B.
This would be applicable from 01-Jan-21 for monthly return filers and from 01st April for taxpayers filing their return on quarterly basis.
GST Compensation Deadlock between States and Centre
Now the issue for which this GST council Meeting was all over in News from almost like two months. The reason for which GST Council meeting was desperately awaited by the states. But the meeting ended with the announcement that GST Compensation Issue between States & Centre is not yet resolved. Decision of payment has been said to be deferred and would be taken up again in next GST Council Meeting to be held next week on 12th October 2020.
Government informed through press conference of their decision regarding Compensation Cess levy to be extended beyond 5 yrs.
Further Rs.20,000 Crores Compensation would be disbursed tonight to states. And instead of earlier borrowing limit of Rs 97,000 crore in Option I, Rs 1.1 lakh crore would be given for the states’ borrowing.
We hope that GST Compensation dispute is resolved timely and amicably.
