GST Council extends levy of compensation cess beyond 5 years

New Delhi [India], October 5 (ANI): The GST Council at its 42nd meeting on Monday decided to extend the levy of compensation cess beyond the transition period of five years for such period as may be required to meet the revenue gap.
The Centre, on the request of States, also decided to increase the shortfall amount to Rs 1.10 lakh crores from Rs 97,000 crores under the borrowing option.
Finance Minister Nirmala Sitharaman said 21 states have chosen borrowing option 1 for compensation of revenue shortfall due to GST implementation.
She clarified that the Centre is not denying compensation to any state but those states which have not chosen to any borrowing option have to borrow from the market.
"We have not denied compensation to states. Nobody anticipated COVID. No one in today's meeting has asked for division, Discussion with states is on. The next GST council meeting is on October 12, so the states which want to borrow will have to wait," Sitharaman said.
As per the recommendations of the GST Council, the Centre is releasing compensation of Rs 20,000 crore to states today towards loss of revenue during 2020-21 and an amount of about Rs 25,000 crore towards IGST of 2017-18 by next week.
An official release said that the present GSTR-1/3B return filing system will be extended till March 31, 2021 and the GST laws to be amended to make the GSTR-1/3B return filing system as the default return filing system.
As a further step towards reducing the compliance burden particularly on the small taxpayers having aggregate annual turnover less than Rs 5 crores, the Council's earlier recommendation of allowing filing of returns on a quarterly basis with monthly payments by such taxpayers will be implemented with effect from January 1, 2021.
"Such quarterly taxpayers would, for the first two months of the quarter, have an option to pay 35 per cent of the net cash tax liability of the last quarter using an auto-generated challan," the release said.
The Council recommended that refund will be paid/disbursed in a validated bank account linked with the PAN and Aadhaar of the registrant from January 1, 2021.
It also suggested that the satellite launch services supplied by ISRO, Antrix Corporation Ltd. and NSIL would be exempted. (ANI)