Eight decisions of the GST Council to impact businesses: EY

Eight decisions of the GST Council to impact businesses: EY

The Goods and Services Tax (GST) Council on Monday could not resolve the vexed compensation cess issue and deferred the matter for the next meeting that will be held on October 12.

However, the Council took some other decisions that will have an impact on businesses.

Consultancy firm EY India summarises the other decisions taken by the Council on Monday

1. Levy of GST compensation cess to be extended beyond the transition period of five years, for such period as may be required to meet the revenue gap.

2. Allowing taxpayers having turnover of less than Rs 5 crore to file GST returns on a quarterly basis with monthly payment with effect from January 1, 2021. Such persons shall have an option to pay 35% of their net cash tax liability of the previous quarter using an auto-generated challan for the first two months of the quarter.

3. The due date of furnishing quarterly GST?returns (GSTR-1) to be changed to 13 of the succeeding month with effect from January 1.

4. Liability in GSTR-3B to be on auto-populated basis of GSTR-1 with effect from January 1. Input tax credit to be auto-populated through GSTR-2B from January 1 for taxpayers filing monthly returns, and from April 1 for quarterly return filers. GSTR-1 to be filed mandatorily before GSTR-3B with effect from April 1.

5. The present GSTR-1 and GSTR-3B return filing system to be extended until March 31. GST laws to be amended to make it the same as default return filing system.

6 From April 1, taxpayers having turnover of more than Rs 5 crore shall be required to mention six digits Harmonised System of Nomenclature (HSN)/ Servicing Accounting Code (SAC) on invoices. Taxpayers having turnover upto Rs 5 crore need to mention four digits HSN/SAC on business-to-business (B2B) invoices. The government can also notify mentioning of eight digits HSN for specified class of supplies.