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.
Tax advisors, tax experts and tax department officials are also finding it difficult to understand the changes in this law. The pressure and challenge on the government is that tax revenue should be increased as well as tax thieves and scamsters should be controlled.Keeping this in mind, the Finance Ministry has recently taken some drastic decisions to catch the wrong people and curb wrong inputs and tax evasion.
What are the 6 important changes in the GST rules applicable from 1 January 2021?
1) Changes in input tax credit rules:
The government has put a lot of restrictions on every provision of the application today whether it is 16 (4), 17 (5), rule 36 (4), or 86A.
The government has today banned every provision of input whether it is Section 16 (4), 17 (5), Rule 36 (4), or 86A. Some traders opposing GST were imposing such restrictions from the very beginning. The government argued that with the introduction of such regulations, it is possible to prevent fake bills and fake frauds somewhere. But the truth is that despite so many restrictions, there is no effect on the fraudsters. Now the government is trying again with a new Rule 86B. Let us understand how the government has again revised the provisions of input from 01 January.
In GST, GST Rule 36 (4) was implemented by the Government from 01/10/2019, under which any taxpayer can take only 20% more of the inputs shown in GSTR-2A. Later on 01 January 2020, the government reduced this limit to 10%. Now again from 01 January 2021, the government has changed this rule to reduce its limit to only 5%.
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.
The government has changed one more thing in this rule. But many taxpayers misused this looseness and took more input. Now the government has amended this rule and said that under 36 (4), now only GSTR-01 can only input / file.
2) Input Tax Credit 99% and 1% GST Cash Ledger Payment / Adjusted Tax on Libility
According to the GST Council, a new Rule 86B has been implemented from 1 January 2021, under which the taxpayer will now have to pay at least 1% fee from the cash account (Cash Leader). But in some cases, it has given relief.
- 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.
Under GST rule, no reason has been given to allow up to 99% output tax to be adjusted with input tax. Tax experts believe that why only 99%? Taxpayers will also now have to keep a separate account of which month their tax liability is more than the total tax payment of 1% and they can get rid of this rule.
3) E-Invoice (Billing)
In the revised rules of the GST Council, a rule will be increased from e-challan to 01.01.2020, but this rule was applicable to taxpayers whose annual total amount has exceeded Rs 500 crore in the previous year. But now the government is going to apply this rule to all taxpayers too, whose annual turnover is more than Rs 100 crore.
Issuance of E-INVOICE portal invoice in GST will provide INVOICE REFERENCE NUMBER (IRN). IRN is different from bill no. Once the IRN is issued, its data will also automatically run on the e-way bill portal and the GSTR-1 database.
To prevent tax evasion of big taxpayers, the main purpose of e-challan is to stop fake bills and prevent tax evasion. The provision of e-challan is mentioned in Rule 48 (4) and 48 (5) of GST.
4) Changes in the rules for filing returns
First of all, the government provided three return forms – GSTR-1, GSTR-2 and GSTR-3B after a few months only two returns were kept – GSTR-1 & GSTR-3B.
CBIC has brought out a whole new scheme of filing returns which has been brought for the convenience of small and medium traders. The name of this scheme is -QRMPS (QUARTERLY RETURN MONTHLY PAYMENT SCHEME).
How do I avail this scheme?
Taxpayers can opt in (avail) the scheme and opt out (exit) if they don’t wish to continue quarterly filing
by navigating to Login-> Services -> Returns -> Opt-in for quarterly return
Quarter
Between
Q1 (April –May – June)
1st February to 30th April
Q2 (July – August – September)
1st May to 31st July
Q3 (October – November – December)
1st August to 31st October
Q4 (January – February – March)
1st November to 31st January
GSTR-2A and GSTR-2B will be continued to be made available every month. A GSTR-2B’s quarterly
view will also be made available. This will be made available under the return tab for the third month
of the quarter. However, there will be no quarterly view of GSTR-2A.
GST Returns filed by GSTR-2A or GSTR-2B matching, but GSTR-2A as like an oposite party filed by GSTR-1 and GSTR-2B As like a Verifyed input credit on my GSTR-3B Return.
5) Changes in provisions of e-way bill
CBIC has amended Rule 138 (10) which relates to e-way bill in which the available travel time is extended up to 200 km.
Example
goods shipped to a destination located 550 kilometers away occurred on 1 February 2021. According to the current rule, the validity of generating an e-way bill would have expired on February 7, 2021, that is, the generation of an e-way bill for 100 km from midnight.
The scope of e-Waybill Blocking extended –
Rule 138E of GST provides for e-Waybill blockage, under which the taxpayer will not be able to generate e-Waybill if he does not fill the returns for 2 consecutive months.
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
According to the GST Council, if a taxpayer is not submitting the return or challan on time, then even after sending the notice by the GST officer, the firm can be closed, if the taxpayer does not reply to that notice in time, then the GST registration is canceled. can go .
New rules have been added for cancellation of registration in GST rule 21, which is as follows –
- 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.