GST NEWS BULLETIN

Recommendations of the 42nd GST Council Meeting

The GST council in its 42nd meeting held on 05.10.2020 has made the following recommendations:

(a) Compensation cess levy to be extended beyond the transition period of 5 years ending June, 2022 for such further period as may be required.

(b) Enhancement in features of return filing for boosting ease of doing business as follows :

• Due date of furnishing quarterly GSTR-1 by quarterly taxpayers to be revised to 13th of the month succeeding the quarter w.e.f. 01.01.2021.

• 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 credit from suppliers’ GSTR-1s through the newly developed facility in FORM GSTR-2B for monthly filers w.e.f. 01.01.2021 and for quarterly filers w.e.f. 01.04.2021;

• For ensuring auto population of ITC and liability in GSTR 3B as detailed above, FORM GSTR 1 would be mandatorily required to be filed before FORM GSTR3B w.e.f. 01.04.2021.
• The present GSTR-1/3B return filing system to be extended till 31.03.2021 and the GST laws to be amended to make the GSTR-1/3B return filing system as the default return filing system.

(c) To lower the compliance burden on small taxpayers having aggregate annual turnover < Rs. 5 crores, the council has recommended to allow filing of returns on a quarterly basis with monthly payments w.e.f. 01.01.2021. 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 last quarter using an auto generated challan.

(d) Revised requirement of declaring HSN for goods and SAC for services in invoices and in FORM GSTR-1 w.e.f. 01.04.2021 as under:

• HSN/SAC at 6 digits for supplies of both goods and services for taxpayers with aggregate annual turnover above Rs. 5 crores;
• HSN/SAC at 4 digits for B2B supplies of both goods and services for taxpayers with aggregate annual turnover upto Rs. 5 crores;
• Government to have power to notify 8 digits HSN on notified class of supplies by all taxpayers.

(e) Refund to be disbursed in a validated bank account linked with the PAN & Aadhaar of the registered person w.e.f. 01.01.2021.

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Blocking of E-way Bill generation facility after 15th October, 2020

As per Rule 138 E (b) of CGST Rules, 2017, E-way bill generation facility of a person is liable to be restricted, in case GSTR-3B for a consecutive period of two months or more is not filed.

CBIC has specified that registered persons having Aggregate Annual Turn Over (AATO) more than ₹ 5 crores, failing to file their GSTR-3B Return for two or more tax periods, up to the month of tax period of August, 2020, their EWB generation facility will be blocked on the EWB Portal after 15th October, 2020.

The above provision shall not be applicable if

• Person is not registered on the EWB portal or
• Registered Person have already filed your GSTR-3B Return for August, 2020 or
• AATO (PAN based) is below ₹ 5 Crores.

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CBIC has issued clarification on GSTR-9 & 9C vide press release dated 9th October, 2020

CBIC has provided much awaited clarification in respect of transactions relating to F.Y. 17-18 being reflected in auto-populated GSTR-9 of F.Y. 18-19. CBIC has clarified that the taxpayers are required to report only the values pertaining to Financial Year 2018-19 and the values pertaining to Financial Year 2017-18 which may have already been reported or adjusted are to be ignored.

Furthermore, no adverse view would be taken in cases where the returns have already been filed by including the details of supplies and ITC pertaining to Financial Year 2017-18 in the Annual return for FY 2018-19.

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CBIC has issued clarification for cumulative application of sub-rule 4 of rule 36 of the CGST Rules, 2017 for the months of February, 2020 to August 2020.

CBIC vide circular no. 142/12/2020 – GST dated 9th October, 2020 has clarified the procedure for cumulative application of sub-rule 4 of rule 36 of the CGST Rules, 2017 for the months of February, 2020 to August 2020 in GSTR-3B for the month of September, 2020.

The registered persons shall reconcile the ITC availed in GSTR-3B with the invoice details reflected in the GSTR-2A for the period Feb-20 to Aug-20.

The registered persons are required to check the details of invoices uploaded by their suppliers in their GSTR-1 for the period Feb-20 to Aug-20 till the due date of furnishing GSTR-1 for the month of September, 2020 as reflected in GSTR-2As.

The cumulative amount of ITC availed for the said months in FORM GSTR-3B should not exceed 110% of the cumulative value of the eligible credit available in respect of invoices or debit notes the details of which have been uploaded by the suppliers till the due date of furnishing GSTR-1 for the month of September, 2020.

The excess ITC availed arising out of reconciliation during this period, if any, shall be

required to be reversed in Table 4(B)(2) of FORM GSTR-3B, for the month of September, 2020.

Failure to reverse such excess availed ITC on account of cumulative application of sub-rule (4) of rule 36 of the CGST Rules would be treated as availment of ineligible ITC during the month of September, 2020.

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