written by | October 11, 2021

Everything about 42ns GST Council Meeting

What is the GST Council?

Goods and Services Tax Council is a constitutional body for making suggestions to the Union and State Government on issues identified with Goods and Service Tax. The GST Council is led by the Union Finance Minister and other members are the Union State Minister of Revenue or Finance and Ministers accountable for Finance or Taxation of the apparent multitude of States.
According to Article 279A (4), the Council makes suggestions to the Union and the States on significant issues identified with GST, like goods and services that might be subjected or absolved from GST, model GST Laws, rules that oversee Place of Supply, threshold limits, GST rates incorporating the floor rates with bands, special rates for raising extra assets during natural cataclysms/catastrophes, special arrangements for specific States, and so forth. These decisions are taken by the council in the council meeting which is headed by the Finance Minister of India. A decision of the GST Council requires a majority of at least 75 percent votes. Voting is done by a weighted average system, with the Centre having one-third of weightage and states together are considered to two-third weightage.

42nd GST Council Meeting

The 42nd GST Council met under the Chairmanship of Union Finance and Corporate Affairs Minister Smt. Nirmala Sitharaman by means of video conferencing on  05th October in New Delhi. 

Union Minister of State (MoS) for finance Anurag Thakur finance ministers of states and Union territories (UTs) likewise attended the virtual meeting, which was held to finalize modalities to remunerate states for their income shortage of Rs 2.35 lakh crore in the current monetary year.

In the last GST board meeting, the central government gave two choices to the state governments. The originally was an open window of Rs 97,000 crore from the Reserve Bank of India and the second was to get 5the whole shortage of Rs 2.35 trillion from the business sectors for convenience by the national bank. The sum will be paid by compensation cess which will be conveyed forward from June 30, 2022, which created a lot of noise. 

The significant changes and decisions taken in the 42nd GST Council Meeting are:

  • Compensation cess

Compensation cess gathered for the current year up until this point, adding up to around to Rs 20,000 crore, will get dispensed to all states. The GST council additionally chose to extend the compensation cess past June 2022.
In help to businesses, apparently despite the hefty deficit in GST collection because of the pandemic, the GST Council won’t be increasing the rate of Compensation Cess. Be that as it may, it has been chosen to broaden the duty of Compensation Cess past the change time of 5 years which lapses in June 2022.

  • Integrated GST

Rs 25,000 crore of IGST to be delivered to the states — which had gotten less before — will be dispensed before the following week’s over since the meeting took place.

  • Monthly Return filing: 

From the first of January onwards, citizens with a yearly turnover of up to Rs5 crore won’t be needed to file monthly GST return (GSTR-3B and GSTR-1). They will just need to file for quarterly returns. 

  • Help to Small Taxpayers 

GST Council’s choice to make returns for little citizens on a quarterly premise instead of month to month premise will be a significant alleviation. The number of returns descends from 24 month to month returns to 8 returns, from January 1, 2021.

  • GST Council exempts satellite service benefits by ISRO, Antrix 

To empower the domestic launching of satellites especially by young & new companies, the satellite launch services provided by ISRO, Antrix Corporation Ltd. furthermore, NSIL would be excluded. 

  • GST compensation issue 

The installment of GST compensation to states turned into an issue after incomes from the imposition of cess began waning since August 2019. The Center needed to plunge into the excess cess sum gathered during 2017-18 and 2018-19. The compensation payout sum was Rs 69,275 crore in 2018-19 and Rs 41,146 crore in 2017-18. 

  • Improvement in features of return filing

To upgrade Ease of Doing Business and improve the compliance experience, the Council has affirmed the future guide for return recording under GST. 

The approved structure intends to simplify return filing and additionally lessen the taxpayer’s compliance burden altogether, with the end goal that the furnishing of details of outward supplies (GSTR-1) by a taxpayer and their providers would- 

(I) permit them to see the ITC accessible in his electronic credit ledger from all sources for example domestic supplies, imports and payment on reverse charge and so forth, preceding the due date for payment of tax, and 

(ii) Enable the system to auto-populate return (GSTR-3B) through the information recorded by the taxpayer and all of his providers.

  • The Council recommended

  1. a) Due date of furnishing quarterly GSTR-1 by quarterly citizens to be reconsidered to 13th of the month succeeding the quarter w.e.f. 01.1.2021; 
  2. b) Roadmap for auto-generation of GSTR-3B from GSTR-1s by: 
  1. Auto-population of liability from own GSTR-1 w.e.f. 01.01.2021; and 
  2. Auto-population of input tax reduction from providers’ GSTR-1s through the recently evolved facility in FORM GSTR-2B for the month to month filers w.e.f. 01.01.2021 and for quarterly filers w.e.f. 01.04.2021; 
  1. c) In request to guarantee auto-population of ITC and liability in GSTR 3B as definite above, FORM GSTR 1would be obligatorily needed to be recorded before FORM GSTR3B w.e.f. 01.04.2021. 
  2. d) The present GSTR-1/3B return filing system to be stretched out till 31.03.2021 and the GST laws to be altered to make the GSTR-1/3B return filing system as the default return filing system. 

Given the familiarity accomplished by businesses with the current return filing system (GSTR-1 and GSTR-3B) in the course of the last 3 years, the choice to proceed with them is an inviting move, which will forestall avoidable disturbances that would have been caused while moving to another return recording component. Nonetheless, with the introduction of GSTR-2B and its linkage with GSTR-3B, it will be intriguing to see whether the Council eventually chooses to confine the ITC eligibility of organizations to invoices showing up in GSTR-2B. 

  • Revised Requirement of announcing HSN for merchandise and SAC for services in invoices

Re Requirement of announcing HSN for merchandise and SAC for services in invoices and in FORM GSTR-1w.e.f. 01.04.2021 as under: 

  1. HSN/SAC at 6 digits for provisions of the two products and enterprises for citizens with total yearly turnover above Rs. 5 crores; 
  2. HSN/SAC at 4 digits for B2B supplies of the two products and enterprises for taxpayers with total yearly turnover up to Rs. 5 crores; 
  3. Government to have the capacity to tell 8 digit HSN on the notified class of supplies by all taxpayers.

With the Council choosing to empower the Government to notify the class of supplies for which 8 digits of HSN would be needed to be unveiled, organizations ought to return to their ERP frameworks to guarantee that their billing and accounting systems are prepared to uncover and record the HSN of their outward supplies at 8 digit level.

  • Refund to be paid/disbursed

The refund will have to be paid/disbursed in a validated bank account linked with the PAN & Aadhaar of the registrant w.e.f. 01.01.2021.

All we have is the hope that the country’s economy shoots up and apart from these small measures, we have big plans that can be actually implemented efficiently and change the dynamics of the growth of the country. 

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