Last updated: October 18th, 2022 6:44 PM

Key Highlights of 42^nd GST Council Meeting

42^nd GST Council Meeting was held on 5^th October 2020 via video conferencing mode. The key recommendations made by the GST council, during the meeting, are highlighted in the present article.

Various amendments in GST return

• With effect from 1^st January 2021, it is recommended to revise the due date for filing of quarterly Form GSTR-1 return to 13^th of the month succeeding the end of the quarter.
• Auto-generation of Form GSTR-3B based on Form GSTR-1 as under-

Particulars	Basis of auto-generation	Effective date
Auto-generation of tax liability	Taxpayer’s own Form GSTR-1	1st January 2021
Auto-generation of Input Tax Credit	Supplier’s Form GSTR-1 via new facility developed in Form GSTR-2B	1st January 2021 (for monthly filers) 1st April 2021 (for quarterly filers)

• It is recommended to continue present Form GSTR-1 and Form GSTR-3B till 31^st March 2021.
• Recommendation for taxpayer having aggregate annual turnover less than INR 5 Crores-
  • With effect from 1^st January 2021, it is recommended to allow such taxpayer (i.e. taxpayer whose annual turnover is less than INR 5 Crores) to file the return on a quarterly basis, however, tax to be discharged on monthly basis.
  • Such taxpayer would have an option, for the first two months of the respective quarter, to pay 35% of the net cash tax liability of the last quarter by using an auto-generated challan.

Amendment in requirement of declaration of HSN and SAC in invoices and Form GSTR-1

• Following table explains the amended requirement of declaration of HSN and SAC-

Number of digits of HSN/ SAC to be declared	Particulars
6 digits	A taxpayer having aggregate annual turnover above INR 5 Crores.
4 digits	In case of B2B supplies (for both goods and services) for taxpayer having aggregate annual turnover up to INR 5 Crores.
8 digits	Notified class of supplies by all the taxpayers.

Please note HSN code is applicable for supply of goods, whereas, SAC is applicable for supply of services.

• The above amendment will be effective from 1^st April 2021.

Compensation Cess

• It is recommended to extended Compensation Cess beyond the transition period of five years. That means the Compensation Cess will remain applicable even after 1^st June 2022. Such extension will be for the period as may be required to meet up the revenue gap.
• Compensation Cess of INR 20,000 Crores will be released to the States on 5^th October 2020 against revenue loss during the year 2020-2021.

Miscellaneous recommendations

• Incorporation of the facility to furnish NIL Form CMP-08 return via SMS.
• From 1^st January 2021, a refund will be paid or disbursed in a validated bank account which linked with the PAN & Aadhaar of the registrant.
• The satellite launching services supplied by ISRO, NSIL and Antrix Corporation would be exempted. The exemption aims to promote domestic satellite launching specifically by young start-ups.