42nd GST Council Meeting: Key Highlights & Outcomes
The Hon’ble Finance Minister Mrs. Nirmala Sitharaman held the 42nd GST Council meeting via video conferencing in New Delhi today.
We bring you key highlights and outcomes from the meeting.
> Compensation cess collected this year amounting to approx. Rs. 20,000 Crore – will be disbursed to all states tonight.
> The Council addressed the long-pending issue of Integrated Goods & Services Tax. As there was no formula for devolution of IGST, it resulted in several anomalies in its distribution. The committee under Chairpersonship of Bihar Minister Mr. Sushil Modi has worked out a way to resolve IGST devolution issue. The amount of Rs. 24,000 Crore which has to go to states that received less will get the amount now.
> Commencing from January 1, 2021, taxpayers with annual turnover of less than Rs. 5 Crore need not file monthly returns (GSTR-3B and GSTR-1); quarterly returns can be filed by these taxpayers. However for state revenue, payments can be made through challan every month, and returns can be filed every quarter. This would bring down the number of returns from 24 monthly returns to 8 returns.
> The provision of GSTR-2B has been provided to help taxpayers calculate input tax credit. It will give taxpayers a complete idea of the ITC they are entitled to.
> Commencing from 1st April 2021, taxpayers with turnover more than Rs. 5 crore will have to compulsorily mention HSN codes up to 6 digits. Those taxpayers with a turnover less than Rs. 5 crore will have to mention HSN code up to 4 digits, for B2B supplies.
> Certain classes of goods where the government feels the need for closer tracking, HSN codes will be of 8 digits. These will be notified by the government.
> From 1st January, 2021 refunds will be given only to those bank accounts which are validated with PAN and Aadhaar. This will help check tendencies of some taxpayers to receive refunds and then disappear.
> The refund applications can be signed using Aadhaar authentication, to make the application convenient and easy for taxpayers.
> The GST Council has decided that satellite launches will be completely exempt from 18% GST, to encourage domestic launching of satellites by ISRO and Antrix Corporation.
During the 41st GST Council Meeting the states were presented with two options to meet the shortfall in GST compensation. Accordingly, the states had then requested time to deliberate on the options and get back. A follow-up meeting of the GST Council of the compensation issue will be held on 12th October, 2020.
Vox Analytica GST
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