Non-filers of monthly GST returns would be prevented from filing GSTR-1 from next year.

Non-filers of monthly GST returns would be prevented from filing GSTR-1 from next year.

Businesses that fail to file a summary return or pay monthly GST will be unable to file a GSTR-1 sales return for the following month beginning January 1 of the following year. The GST Council met in Lucknow on September 17 and resolved on a slew of steps to simplify compliance, including requiring firms to use Aadhaar authentication when filing refund claims.

These steps will aid in preventing revenue leakage from the Goods and Services Tax (GST), which was implemented on July 1, 2017.

With effect from January 1, 2022, the Council agreed to alter Rule 59(6) of the Central GST Rules to specify that a registered person will not be allowed to file Form GSTR-1 if he has not filed the previous month’s return in Form GSTR-3B.

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Currently, the legislation prohibits businesses from filing a report for outward supplies, or GSTR-1, if they have not filed a GSTR-3B for the previous two months.

Businesses file GSTR-1 for a given month by the 11th day of the following month, but GSTR-3B, which is used to pay taxes, is filed in a staggered fashion between the 20th and the 24th day of the following month.

The GST Council has also made the Aadhaar authentication of GST registration essential for filing refund claims and applications for registration revocation or cancellation.

New GST registration denial have a serious impact on our economy 

With effect from August 21, 2020, the Central Board of Indirect Taxes and Customs (CBIC) has notified Aadhaar authentication for GST registration.

The announcement also stated that if a business does not give an Aadhaar number, GST registration will only be approved after a physical inspection of the business location.

Businesses will now be required to link their GST registration with biometric Aadhaar in order to claim tax refunds and apply for revocation or cancellation of registration, according to the Council.

In its 45th meeting, the Council, which consists of central and state finance ministers, also determined that GST refunds will be paid into the same bank account as the PAN used to get GST registration.

Latest GST Update

Today’s Updates:

1. CBIC clarified that GST would not be levied on services provided by the Central or State Boards, including NBE, in the conduct of examinations for students including entrance exams. This move will benefit millions of households whose wards are at different levels in education.

2. In GST: Now HSN Code and Rate Mandatory in GSTR 1 from May 21.

Aggregate Turnover in the preceding Financial Year Number of Digits of HSN Code
Up to 5 crores Minimum 4 Digits
Exceeding 5 Crores Minimum 6 Digits

Tax Rate Reporting is mandatory in HSN Summary

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3. MCA Compliance: 30th June is the last date for filing form CFSS-2020: Form CFSS-2020 is a simple form in which details like CIN (Corporate Identification Number), Name of the Company and its Registered Office address, email of the Company and list of forms filed under the said scheme along with SRN are to be given. Immunity certificate will be issued by the designated Authority after the form is taken on record.

4. Clarification regarding applicability of GST on the activity of construction of road where considerations are received in deferred payment (annuity): Refer [Circular No. 150/06/2021 dated 17th June 2021]

Discussion related to the credit of the TDS

The GST compensation amount for FY22 at the Centre should be greater than the anticipated Rs 1.58 lakh crore: Opp-ruled states

The GST compensation amount for FY22 at the Centre should be greater than the anticipated Rs 1.58 lakh crore: Opp-ruled states

Three opposition-ruled states stated on Sunday that the compensation sum guaranteed by the Centre is expected to be more than the Rs 1.58 lakh crore anticipated by the Centre and that a special session of the GST Council will be summoned to debate it.

The finance ministers of Kerala, Punjab, and Chhattisgarh claimed during the GST Council meeting on May 28 that there was no unanimity on the compensation required for 2021-22 and that a special session will be summoned specifically to examine ‘Revenue Augmentation and Post June 2022 Compensation.’

Manpreet Singh Badal, Punjab Finance Minister, said that all states are experiencing revenue shortfalls of 20-50 per cent, and that “we have recommended that the Council should convene every quarter to discuss the income status of states.”

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“Punjab has a compensation gap of Rs 5,000 crore as of April. All opposition-ruled states agreed that the compensation sum from the federal government should be increased “PTI quoted Badal as saying.

Punjab, he added, has been lobbying for a discussion on the compensation system that will be implemented after June 2022, since states continue to experience revenue gaps as a result of the GST implementation compared to pre-GST times.

Kerala Finance Minister K N Balagopal stated that the Centre owes the state Rs 4,077 crore in compensation, and that the Centre should ensure that the states receive the promised revenue rise of 14%.

“The revenue growth projection of 7% is not a guess. Because some states are experiencing negative growth, this premise is invalid. We’ll have a conversation about it “Balagopal continued.

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T S Singh Deo, the Finance Minister of Chhattisgarh, said the Centre has made forecasts on compensation and borrowing, and that a comprehensive debate will take place at the GST Council’s special session, the date of which has yet to be determined.

For the current fiscal year, the Centre estimates that states will need Rs 2.69 lakh crore in compensation. According to the agenda note distributed before the Council meeting, over Rs 1.11 lakh crore will come from a cess on luxury, demerit, and sin items, which would be handed to states to compensate them for the revenue gap resulting from GST implementation.

The remaining Rs 1.58 lakh crore will have to be borrowed to satisfy the promised compensation, according to the note, which is predicated on the expectation that state revenue growth will be 7% this fiscal.

Section 206C(1H) of the Income Tax Act 1961 at a Glance

The Centre borrowed on behalf of the states and issued Rs 1.10 lakh crore in the fiscal year 2020-21 to make up for the GST revenue shortfall. A total of Rs 68,700 crore was collected through a cess charge.

However, there are voices against the extension. Former Bihar deputy chief minister Sushil Kumar Modi, who was closely associated with formulation of GST laws and represented Bihar in the GST Council till October 2020, said, “I don’t think it will be practical to extend the guaranteed compensation further. Except in FY18, revenue collection was not enough to achieve annual growth of 14% in any other year.

The average revenue growth of most states was 8-9% in pre-GST period and roughly, the rate has been same in the GST regime.” He added that it won’t be ‘feasible’ for the Centre to give states assurance of revenue growth for another five years. “It will take at least four years for the Centre to repay the loans (being taken for compensating states in FY21 and FY22) with interest. If the same assurance is extended, it will create a fresh liability. The cess collections won’t be enough to cover servicing of the existing debt (FY21 and FY22) and to give fresh compensations,” Modi noted.