The Goods and Services Tax Council (GST) on Monday was unable to resolve the compensation issue and postponed the matter for the next meeting to be held on October 12.
However, the Council made other decisions that will have an impact on companies.
Consulting firm EY India summarizes the other decisions made by the Council on Monday
1. The GST compensation rate will extend beyond the five-year transition period for as long as it takes to fill the income gap.
2. Allow taxpayers with a turnover of less than Rs 5 crore to file GST returns on a quarterly basis with monthly payment from January 1, 2021. Such individuals will have the option to pay 35% of their tax liability net cash quarter using an automatically generated challan during the first two months of the quarter.
3. The due date for providing quarterly GST statements (GSTR-1) will be changed to the 13th of the following month starting January 1.
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4. Accountability in GSTR-3B will automatically be completed in GSTR-1 as of January 1st. The entry tax credit will be automatically filled through GSTR-2B beginning January 1 for taxpayers filing monthly returns and beginning April 1 for quarterly taxpayers. GSTR-1 must be filed with GSTR-3B with effect from April 1.
5. The current GSTR-1 and GSTR-3B filing system will run until March 31. GST laws will be modified to be the same as the default filing system.
6 As of April 1, taxpayers with a turnover of more than Rs 5 million are required to mention the six-digit Harmonized System of Nomenclature (HSN) / Service Accounting Code (SAC) on invoices. Taxpayers with a turnover of up to Rs 5 million are required to mention four digit HSN / SAC on business-to-business (B2B) invoices. The government may also report the mention of eight-digit HSNs for a specific class of supplies.
7. Several amendments are recommended to the 2017 Central Goods and Services Tax (CGST) Rules, including the provision to provide the NIL CMP-08 form via Short Message Service (SMS).
8. Refund to be disbursed to a validated bank account linked to the Registrant’s Permanent Account Number (PAN) and Aadhaar with effect from January 1.
Abhishek Jain, Tax Partner of EY, commented on the Council’s decisions.
He said: “In line with the expectations of the majority, the increase in the tenure of the foreclosure rate was finalized as an option to compensate the states, but it would imply the continuation of the increase in the prices of these goods for a couple of years plus. While an ad-hoc release of funds and increased tenure should provide some comfort to states, the modus operandi on lending remains a major bone of contention with no consensus building. “
At the time of introducing the new indirect tax regime, the GST law assured state governments a 14% increase in their annual tax revenue for five years and the Center committed to cover any shortfall in revenue through the tax rate. compensation imposed on luxury items and products of sin. such as liquor, cigarettes, sparkling water, cars, coal, and other tobacco products.
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