Content:

Levy of Compensation Cess to be extended beyond 5 years

Centre to Release Compensation to states

Compliance related measures

Reducing Burden of Small Taxpayers

Revising the requirement to mention HSN/SAC on Tax Invoices

Levy of Compensation Cess to be extended beyond 5 years

  • GST is a destination based consumption tax; the revenue of GST has been accruing to destination/ consuming states [except section 13(8) of IGST Act].
  • Goods and services Tax (compensation to States) Act, 2017 was enacted to levy compensation cess for providing compensation to the States for the loss of revenue which is arising on account of implementation of the goods and services tax with effect from the date from which the provisions of the Central Goods and Services tax Act is brought in force (01/07/2017), for a period of five years or for such period as may be prescribed on the recommendations of the GST council.
  • Therefore, the levy of Compensation Cess to be extended beyond the transition period of five years i.e., beyond June, 2022, for such period as may be required to meet the revenue gap.

Centre is releasing compensation to Sates of an amount of about 20000 crore today for the loss of revenue during 2020-21 and towards IGST of an amount 25000 crore of 2017-18 by next week.

Compliance related measures

  • With a view to further enhance Ease of Doing Business and improve the compliance experience, the Council has approved the future roadmap for return filing under GST.
  • The approved framework aims to simplify return filing and further reduce the taxpayer’s compliance burden in this regard significantly in below manner:
  • Due date of furnishing quarterly GSTR-1 by quarterly taxpayers to be revised to 13 of the month succeeding the quarter w.e.f. 01st January 2021
  • Auto- population of liability from own GSTR-1 w.e.f. 1st January 2021
  • Auto- population of input tax credit from suppliers GSTR-1 s through the newly developed facility in FORM GSTR-2B for month filers w.e.f. 01st January, 2021 and for quarterly filers w.e.f 01st April 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.

Reducing Burden of Small Taxpayers

  • The compliance burden on small taxpayers is aggregate annual turnover is more than 5 crores, the Council recommends to allow filing of returns on a quarterly basis with monthly payments by such taxpayers to be implemented w.e.f 01st January, 2021.
  • Those 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.

Revising the requirement to mention HSN/SAC on Tax Invoices

  • HSN & SAC are required particulars to be mentioned in Tax Invoice as per Rule 46(g) of CGST Rules.
  • The following table would illuminate the current requirement of HSN & SAC on invoice & its comparison with expected change recommended by GST Council:
Current position Recommended
Aggregate turnover Digits Aggregate turnover digits
Up to ₹1.5 crores Not required Up to ₹5 cr 4 digits (for B2B transaction)
More than ₹1.5 crores but up to ₹5 cr 2 digits Above ₹5 cr 6 digits
More than ₹5 cr 4 digits Import & export of goods 8 digits
Import export of Goods 8 digits Government notified supplies 8 digits
CategoryGST
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