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October 4, 2020

Three Expectations from GST Council Meeting on 5 October 2020

by facelesscompliance in GST

Three Expectations from GST Council Meeting on 5 October 2020

The 42nd GST Council meeting is all set to discuss a whole host of issues proposing compliance relaxations, finding a solution to the on-going compensation cess issue of states

1) GST Compliance Due Dates

  • GST Council likely to allow UPI & IMPS Option to make payment. Currently payments can be made by only GST-authorised banks
  • GST Council to extend GSTR-1 & 3B system till March 21
  • Council to change due date of filing of GSTR-1 by quarterly taxpayers till 13th of month next to the quarter
  • Council to consider limiting period for taking cognisance of prosecution under GST Act
  • Council likely to limit the period in case of fine to a max of six-month imprisonment, in case of imprisonment between 1-3 years to 3 years
  • GST council may re think to extend GST Amnesty for GST taxpayers to avail late fee waiver benefit
  • Extend GSTR 3B amnesty scheme to 31.12.2020
  • Capped late fee to 500/-
  • Extend all GSTR1 due date from April 20 to 31.03.2021 4.
  • Relief for provision of section 16(4)

2) GST Rates

  • GST Council-nominated fitment committee proposes no distinction should be made in ayurvedic & alcohol-based hand sanitizers
  • Fitment committee examined in detail proposal to reduce rates for Ayurveda/Unani/Siddha ingredients based hand sanitizer from 18 to 12%
  • Fitment Committee leaves it for Council to consider whether to re-classify ayurvedic hand sanitizer under Ayurvedic products category & not in disinfectant category
  • Ayurvedic products attract 12% GST, disinfectants attract 18% GST
  • Council likely to exempt satellite launch services from GST, move to encourage private Indian enterprises to launch satellite through Indian satellite launch facilities

3) GST cess compensation issue

  • Council to discuss on going compensation issue
  • Likely to revisit two options given by Centre to meet compensation shortfall
  • Centre to present calculation of compensation cess collected and released so far
  • According to Centre, only Rs 15,000cr is balance of cess collected & not released so far
  • Average revenue gap between April-August of states has risen to 56% in 2020 vs 21% in 2019
  • GST Council to consider proposal to extend cess period beyond 5 years, likely to consider extending cess by 2 more yrs to meet shortfall
  • Council likely to constitute a committee of officers to work out anticipated shortfall and other issues
  • Govt open to enhance the borrowing limit under option 1 suggested to make good for compensation cess shortfall
  • Centre sought the opinion of Attorney General on the extension of cess

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