Highlights of the 42nd GST Council Meeting Held on 5 October 2020

The 42 GST council meeting has taken some major decision based on the GSTR 1 and 3B quarterly filing.

Also, the meeting took concern on the revenue compensation and has said that it will announce decision on the upcoming 12th October on this issue. Other issues such as refund, HSN and facilities on the portal were stated.

However, the main focus of the 42nd GST Council meeting was not very clear but members had taken several GST return and compensation related decisions

1. Effective from 1st January 2021, small taxpayers with turnover less than Rs 5 crore, can file quarterly GSTR-3B and GSTR-1 and the due date of furnishing quarterly GSTR-1 will be the 13th of the month succeeding the quarter. However, taxpayers can upload invoices every month. Hence, the number of returns have been reduced to 8 from 24.

2. Such quarterly taxpayers would, for the first two months of the quarter, have an option to pay 35% of the net cash tax liability of the previous quarter, using an auto-generated challan.

3. A roadmap has been prepared for the auto-generation of GSTR-3B, where the ITC will be auto-populated from the supplier’s GSTR-1 and the tax liability will be auto-populated from the business’ GSTR-1. To achieve this, the GSTR-1 should be filed mandatorily before filing GSTR-3B w.e.f.01.04.2021.

4. All taxpayers will continue to pay GST dues monthly through a simple challan. A nil CMP-08 will be allowed to be filed through an SMS.


5. Effective from1st April 2021 Taxpayers with turnover exceeding Rs 5 crore, HSN code up to 6 digits must be mentioned in the invoice and in GSTR-1. However, the taxpayer having  turnover less than Rs 5 crore, HSN code up to 4 digits need to be mentioned for B2B supplies for both goods and services. However for notified classes of goods and services, 8 digits will need to be mentioned.

6. Refunds to be given into bank accounts where PAN and Aadhaar linking is done. Aadhaar authentication facility (with OTP) is now allowed for refund applications. This discourages taxpayers from misusing the system.

7. GST exemption provided to satellite launch services by ISRO, Antrix Corporation and New Space India Limite (NSIL) to encourage the space launching services in India.

8. Non-alcohol based sanitisers will continue to be taxed at an 18% GST rate.

9. The compensation cess collected till now accounts to Rs.20,000 crore, and the same will be disbursed to the states by 05.10.2020.

10. The amount of Rs.25,000 crore towards IGST of 2017-18 will also be disbursed to specific states by next week.

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