GST compensation obligation questioned, Council to consider cess adjustments or state borrowing to meet revenue shortfall.
The core dispute concerns whether the Centre is legally obliged to fund GST compensation shortfalls from its coffers or whether the GST Council should adopt measures-such as state market borrowing, increasing or expanding the compensation cess, or rationalising GST rates-to replenish the compensation corpus, following an Attorney General opinion that the Centre may not be statutorily bound to provide additional budgetary support.

Interest on delayed GST payment applied prospectively; past-period recoveries will not be pursued, ensuring taxpayer relief.
The notification changes interest computation to the net liability basis and has been issued for prospective application due to technical limitations; tax administrations will not pursue recoveries for prior periods, preserving the GST Council's decision to provide relief to taxpayers.

GST compensation obligation questioned after AG opinion; Council to decide funding and borrowing options for shortfalls.
The Attorney General advised that there is no legal obligation on the Central Government to pay GST compensation shortfalls to states and that the GST Council must decide how to address the compensation fund deficit, including considering market borrowing as a funding mechanism.

GST revenue collections declined year on year; import receipts fell more than domestic receipts, affecting central and state settlements.
Gross GST receipts for July 2020 comprised CGST, SGST, IGST (including collections on import of goods) and cess, with regular IGST settlements made to CGST and SGST producing specified net central and state shares. Monthly receipts were lower than the same month last year, with import revenues falling more than domestic transactions, and prior-month receipts inflated by delayed payments permitted under COVID-19 relief; filing relaxations for smaller taxpayers remain in force for the announced relief period.

GST compensation released to states after utilising cess balances and consolidated fund transfer to cover shortfall.
Centre released GST compensation totalling Rs. 1,65,302 crore for FY 2019 20 despite cess collections of Rs. 95,444 crore, by utilising unspent cess balances from 2017 18 and 2018 19 and transferring Rs. 33,412 crore from the Consolidated Fund to the Compensation Fund to apportion residual IGST, with a March 2020 release completing payments up to 2019 20.

GST fraud via fake invoices enabled wrongful ITC and IGST refund claims, prompting arrests and ongoing investigation.
Three firms issued large volume invoices without actual supply, enabling other entities to wrongfully claim input tax credit and IGST refunds; investigations using data analytics uncovered linked refund claims, and three persons were arrested and remanded after being charged with offences under Sections 132(1)(b) and 132(1)(c) of the CGST Act, 2017, with further inquiries ongoing.

Tax evasion uncovered in clandestine cigarette clearance; searches, seizures and arrest under CGST Act, investigation ongoing
Clandestine clearance of cigarettes was detected by DGGI following searches at factory, trading firms, godowns and residences; incriminating documents and electronic devices were seized indicating supply without payment of taxes and duties and preliminary evasion exceeding the stated sum, with supplies occurring during lockdown. One person was arrested under the CGST Act, 2017, and further investigation and forensic examination of seized material are ongoing.

Annual return requirement for composition taxpayers requires filing GSTR-4 annually and prior filing of CMP 08 quarterly returns.
Composition taxpayers must file Form GSTR-4 annually for each financial year from 1 April 2019; NIL annual returns are permitted if no outward supplies, no receipt of goods/services, no other liabilities, and all quarterly CMP-08 statements filed as nil. The annual return is due on the 30th day of the month following the financial year (subject to extension). Filing requires prior submission of all CMP-08 quarters, the annual return is non-revisable, and an ARN is issued upon successful online filing.

GST rate on hand sanitizers upheld to prevent inverted duty structure and protect domestic manufacturers and self-reliance.
Alcohol-based hand sanitizers are subject to the standard GST rate, with inputs and input services also taxed at that rate. The GST Council determines rates, and reducing the rate on sanitizers would create an inverted duty structure that disadvantages domestic manufacturers vis-a -vis importers, undermines domestic competitiveness and self-reliance, and would not necessarily benefit consumers.

Late fee cap for GSTR 3B returns limits maximum penalty where tax liability exists if filed by the extended deadline.
A temporary cap limits the maximum late fee per GSTR 3B return for tax periods July 2017-July 2020, applicable where returns showing tax liability are filed by the extended deadline; returns that disclose no tax liability attract nil late fee.

Nil Form GSTR-1 can be filed by SMS using prescribed NIL and CNF messages with a one-time verification code.
Nil Form GSTR-1 can be filed via SMS when there are no outward supplies, amendments, credit/debit notes or advances to report. Eligibility requires valid GSTIN, chosen filing frequency (monthly/quarterly), an authorized signatory with a unique registered mobile number, and no saved/submitted online data for the same period. The SMS flow uses a prescribed NIL message, issuance of a one-time six-digit Verification Code (30-minute validity), and a CNF SMS with that code to generate an ARN and mark the return Filed on the portal.

Ease of Doing Business: simplify GST administration to speed return processing and allow quicker input tax credit access.
The Finance Minister prioritized simplifying GST administration to achieve Ease of Doing Business, calling for proactive resolution of taxpayer issues, streamlined return filing, faster processing of returns and prompt allowance of Input Tax Credit, and commending CBIC for refund disbursements and use of IT platforms during the COVID-19 pandemic.

Tax evasion via unregistered manufacturing uncovered; seizures and arrest triggered ongoing criminal tax investigation.
Unregistered manufacture and distribution of Pan Masala/Gutkha was detected after targeted searches recovered documents and electronic records showing systematic supply without GST compliance and continued operation during lockdown; preliminary data indicated substantial tax evasion, the main beneficiary was arrested under tax enforcement provisions and remanded to judicial custody, and further investigation continues.

GST revenue collection shows sequential recovery but remains below last year due to COVID 19 and relaxed filing timelines.
The release reports GST revenue collection for June 2020 with gross receipts split among CGST, SGST, IGST (including import of goods) and Cess, and notes regular IGST settlements to CGST and SGST producing net revenues for Centre and States. It attributes lower receipts to COVID 19 economic effects and relaxed return filing timelines, records sequential recovery across April-June, and references comparative percentages versus the prior year alongside accompanying trends and statewise tables.

NIL GSTR-1 filing via SMS simplifies return submission and enables code-based confirmation and portal tracking.
Taxpayers with NIL outward supplies may file a NIL statement in FORM GSTR-1 by sending a prescribed SMS to a designated short code, receiving a six-digit time-limited authentication code, and confirming filing via a follow-up SMS; successful validation issues an acknowledgement number and the return status can be tracked on the GST Portal.

Late fee reduction for past GST returns eases compliance burden and limits penalties for delayed GSTR-3B filings.
Late fee reduction and interest relief were recommended to address return filing pendency under GST: reduced or waived late fee for past non-filing of FORM GSTR-3B with nil fee where no tax is payable and a capped fee where tax is payable, and temporary reduction of interest rates for small taxpayers for specified months; relief applies for returns furnished within the notified relief windows.

NIL GST return via SMS enables taxpayers to file and confirm monthly GSTR 3B without logging into the portal.
The Government enabled filing of nil GST monthly returns in FORM GSTR-3B via SMS using a prescribed SMS format to obtain a time-limited filing code, followed by a confirmation SMS with that code; successful filings generate an ARN which can be used to track return status on the GST Portal.

GST compensation release supports state fiscal needs during COVID-19 by disbursing funds to legislatures for service delivery.
The Central Government disbursed a tranche of GST Compensation funds to States and Union Territories with Legislatures-Rs. 36,400 crore for December 2019 to February 2020-following an earlier release of Rs. 1,15,096 crore for April-November 2019, aimed at offsetting revenue shortfalls and supporting State/UT expenditure during the COVID-19 fiscal impact.

Late fee waiver under GST to be considered; change requires multilateral approval and aims to preserve filing discipline.
Waiver of late fee for historical non-filing of GSTR-3B returns is under consideration; the fee exists to ensure timely filing and protect compliant taxpayers. Recent pandemic-related late fees were waived for a limited period, but older liabilities are not addressed. Any change to the historical late fee requires multilateral approval and will be placed on the agenda of the GST Council for discussion.

GST refund authenticity: use only the official portal for refund claims to avoid phishing and data theft.
Fraudulent messages and imitation portals are circulating to obtain GST refund information; taxpayers must use the official gst.gov.in portal only, because the GST Network does not request personal, refund or KYC details via email, WhatsApp, SMS or other websites. Taxpayers should not reply to such messages, open links or provide information on non official platforms and should consult the portal's refund help pages or the official helpdesk for assistance.