Centre releases Rs. 20000 crore to States towards loss of revenue during 2020-21

New Delhi: Following the recommendation of the 42nd GST Council, Centre today released compensation of Rs. 20,000 crore to States towards loss of revenue during 2020-21 and an amount of about ₹ 25,000 crore towards IGST of 2017-18 by next week. Besides, the Council recommended implementation of its earlier decision of allowing filing of returns on a quarterly basis with monthly payments by such taxpayers  with effect from January 1, 2o21. This step is aimed at  reducing the compliance burden particularly on the small taxpayers having aggregate annual turnover less than Rs. 5 crore. Such quarterly taxpayers would, the Council stated,  have an option to pay 35% of the net cash tax liability of the last quarter using an auto generated challan for the first two months of the quarter.

The Council further recommended extension of Levy of Compensation Cess beyond the transition period of five years, that is beyond June, 2022, for such period as may be required to meet the revenue gap. Further details on the recommendation would be worked out. It also recommended that refund should be disbursed in a validated bank account linked with the PAN  and Aadhaar of the registrant w.e.f. 01.01.2021.

The Council had met under the Chairmanship of Union Finance & Corporate Affairs Minister Nirmala Sitharaman through video conferencing here today.

It also recommended enhancement in features of return filing. It may be mentioned that in its 39^th meeting in March 2020, the Council had recommended an incremental approach to incorporate features of the new return system in the present familiar GSTR-1/3B scheme. Various enhancements had since been made available on the GST Common Portal.

With a view to further enhance Ease of Doing Business and improve the compliance experience, the Council today approved the future roadmap for return filing under GST.

A Union Finance Ministry statement further elaborated: “The approved framework aims to simplify return filing and further reduce the taxpayer’s compliance burden in this regard significantly, such that the timely furnishing of details of outward supplies (GSTR-1) by a taxpayer and his suppliers would –(i) allow him to view the ITC available in his electronic credit ledger from all sources i.e. domestic supplies, imports and payments on reverse charge etc. prior to the due date for payment of tax, and (ii) enable the system to auto-populate return (GSTR-3B) through the data filed by the taxpayer and all his suppliers.”

This implies that the timely filing of GSTR-1 statement alone would be sufficient as the return in FORM GSTR-3B would get auto prepared on the common portal. To this end the Council decided the following:

a.     Due date of furnishing quarterly GSTR-1 by quarterly taxpayers to be revised to 13^th of the month succeeding the quarterw.e.f. 01.1.2021;

b.    Roadmap for auto-generation of GSTR-3B from GSTR-1s by:

i.      Auto-population of liability from own GSTR-1 w.e.f. 01.01.2021; and

ii.      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;

c.     In order to ensure auto population of ITC and liability in GSTR 3B as detailed above, FORM GSTR 1would be mandatorily required to be filed before FORM GSTR 3B w.e.f. 01.04.2021.

d.    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.

– globalbihari bureau