Centre to Release Rs 20,000 Cr to States as GST Compensation, Cess to Be Levied Beyond 2022

Under the GST structure, taxes are levied under 5, 12, 18 and 28 per cent slabs. On top of the highest tax slab, a cess is levied on luxury, sin and demerit goods and the proceeds from the same are used to compensate states for any revenue loss. Finance Secretary Ajay Bhushan Pandey said with effect from January 1, 2021, GST refunds would be paid/disbursed in a validated bank account linked with the PAN and Aadhaar of the registered taxpayer.

The 42nd meeting of the GST Council, chaired by Union Finance Minister and comprising state counterparts, also eased compliance burden for small taxpayers with an annual turnover of less than Rs 5 crore by allowing them to file GST returns on a quarterly basis with monthly tax payments 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 statement added.

Pandey said the Council has also approved the revised requirement of declaring HSN (Harmonised System of Nomenclature) Code for goods in invoices and in sales return Form GSTR-1 with effect from April 1, 2021. Taxpayers with a turnover of over Rs 5 crore will have to quote 6 digit HSN or tariff code, while taxpayers with aggregate annual turnover up to Rs 5 crore will have to quote HSN code up to 4 digits for B2B supplies of both goods and services.

Further, to encourage domestic launching of satellites particularly by young startups, the satellite launch services supplied by ISRO, Antrix Corporation Ltd and NSIL has been exempted from Goods and Services Tax (GST) by the Council.