The 42nd GST council meeting held on 5th October 2020, under the chairmanship of Union Finance Minister Mrs. Nirmala Sitharaman. On various issues, the government took a final decision. While on the disagreement of pending GST Compensation for the states the GST Council failed to reach a consensus. The decision has now been deferred to the next council meeting that will be held on October 12th, 2020.
Key Announcements
RELIEF TO STATES
States get Rs 20000 crore from the cess fund as well as Rs 25000 crore towards IGST dues.
It is decided that the Centre will immediately disburse Rs 20000 crore collected in the cess fund in the current financial year to sates. IGST dues Rs 25000 crore to be released by end of next week.
The Union minister has also approved the extension of the GST compensation cess levy beyond 2022. The proposal was to extend the levy by two years till 2024. While implementing GST in July 2017, Compensation Cess was levied for a period of 5 years.
RELIEF TO TAXPAYERS
No monthly GST returns up to Rs 5 crore Annual Turnover.
From January 1st, 2020, Taxpayers with an annual turnover up to Rs 5 crore will not be required to file returns (GSTR-1 and GSTR-3B) on monthly basis. The government has facilitated quarterly basis GST returns filing by the 13th of the month succeeding the quarter.
However, Tax payment will remain the monthly exercise, but it has to be done through a new simplified Challan.
EASE IN COMPLIANCES
Compliances burden reduced to 8 returns from 24 returns. Declaration of HSN/SAC codes held mandatory.
The compliance burden is been reduced for taxpayers having Annual Turnover up to Rs 5 crore, As the number of returns is reduced to 8 returns annually from 24 returns.
From April 1st, 2021, 6-digit HSN/SAC codes must be provided in invoices and returns for the business with an Annual Turnover of Rs 5 crore or exceeding. However, for those having turnover up to Rs 5 crore 4digit HSN/SAC codes are required.
The council has exempted 18% of GST on startups involving in providing satellite launch services to ISRO, Antrix Corporation, and New Space India.
Source (press release):- Recommendations of the 42nd GST Council Meeting
Knowledge Source:
Key Highlights Of 41st GST Council Meeting