In New Year 2021, several changes have been made in the Goods and Services Tax (GST) rules, which will have a direct impact on businesses registered under the GST law and traders are planning to register more and more merchants under GST. Also, to prevent tax evasion in registered traders, they are changing the stricter GST rules.
What are the 6 important changes in the GST rules applicable from 1 January 2021?
1) Changes in input tax credit rules:
For example, if the input to your GSTR-2A is coming up to Rs 1000 a month, you can take the input up to a maximum of Rs 1050, even if the input to your accounts is Rs 1500.
2) Input Tax Credit 99% and 1% GST Cash Ledger Payment / Adjusted Tax on Libility
- Taxpayers whose monthly turnover is less than 50 lakhs. This will see rebates and export business later when this boundary is cleared.
- If the taxpayer, proprietorship, HUF, KARTA, Assistant Director, WHOLE TIME DIRECTOR, TRUSTEES ETC, have paid their income tax in excess of Rs 1 lakh every year for at least the last two years.
- If in the previous year the taxpayer has taken a refund of more than 1 lakh rupees which is of Unutilized Input Credit on ZERO RATED SUPPLY or Inverted Duty Structure.
- If the taxpayer is a government department, a public sector undertaking, a local body or a constitutional area.
3) E-Invoice (Billing)
4) Changes in the rules for filing returns
5) Changes in provisions of e-way bill
The scope of e-Waybill Blocking extended –
6) Changes in GST registration rules
- The time limit for giving GST registration has been increased from 3 days to 7 days. Also, in those situations where the applicant has not done Aadhaar verification or Aadhaar verification has failed or the department wants to do physical verification, the time limit has been increased from 7 days to 30 days.
- If any deficiency appears in the application for registration, the tax officer will now issue notice in GST REG-03 form within 7 days instead of 3 days.
- If the applicant has not opted for Aadhaar verification, then Biometric Information, Photo, and KYC documents will now be examined. Also, the verification of all the documents which have been given for registration will also be examined in one of the enrolled Facilitation Centers and registration will be given only after that.
- If the applicant has taken the option of Aadhaar verification, then biometric based Aadhar Authentication will be done along with the photo will be taken.
Changes in Cancellation of Registration
- Registration will be canceled if the registered taxpayer creates an invoice without supplying the goods or violating the rules without providing services. Earlier this rule was only on the supply of goods, but now it has been implemented in services also.
- The input tax credit taken by the taxpayer has violated Section 16.
- The turnover shown in GSTR-1 exceeds the turnover of GSTR-3B in any one or more tax periods.
- Rule 86B (1% tax paid in cash) has been violated.