The Good and Services Tax (GST) rule this year is all set to get stringent for entrepreneurs and has introduced some new compliance for the taxpayers. On January 1st 2022 the Central Board of Indirect Taxes and Customs i.e. CBIC has unveiled the New Cycle of GST rule with a vision to keep the Indian economy strengthened. This new cycle of GST is all about the expanded scope of Supplies and enforcement mechanisms, withdrawing concessions, introducing input credit restrictions and major amendments in the goods and services tax. Extensive amendments have been made to shift the taxes burden to areas like e-commerce websites, input credit restriction, enforcement provisions, mandatory Aadhaar authentication for GST revocation and refund application, blocking of GSTR-1 for non-filing of GSTR 3B, empowering the GST Commissioner, etc
Changes have also been introduced based on the recommendation of the GST Council in its 45th meeting.
The new cycle of the GST rule includes considerable changes regarding the constitution of taxable supply, eligibility for tax credits and norms for filing appeals in certain cases. This very initiative would help prevent fake billings due to which sellers would show higher sales in GSTR-1 to allow purchasers to claim an input tax credit (ITC), but report suppressed sales in GSTR-3B to lower GST liability.
A PTI report mentions that it is compulsory for incorporations that GSTR -3B and GSTR-1 are the same and any differences would not be entertained irrespective of the excuses.
In order to comprehend changes under the new GST rule in India deeper you must read the below pointers:
The detention of Goods during movement and confiscation is now in the hands of tax authorities. This amendment is made by delinking section 129 with section 130 which makes it a complete code in itself
Also, the rate to be paid as a penalty has been increased to 200% and the option of getting the detained goods provisionally released has been removed.
Additionally, the time limits have been prescribed for the issuance of notice and the order adjudicating the said notice. Along with this the changes have been made in section 130 aswell as to rationalise the penalties that can be charged in case of confiscation of goods.
In order to rectify the inverted duty structure in the Footwear and Textile industry, the GST council has introduced the GST rate changes which have been effective from January 2022. It has been decided that all the units dealing in footwear and textile products including readymade garments are now liable to pay GST at 12%.
It has been decided at the GST council meeting for the new GST rule that e-commerce operators like Zomato, Swiggy, Ola, Uber would be liable to pay tax on services provided through them, namely transport of passengers, by any type of motor vehicles restaurant services or restaurant services provided, with some exceptions. This statement has been made by the Finance Ministry at the meeting and is already effective from January 1 2022
If you have not filed a return in FORM GSTR-3B for the previous two returns periods before January 1 2022 then this can no longer be done because the GST return filing facility is blocked as per the new GST rule. Let's say if a taxpayer has not filed GSTR-3B for October 2021 and November 2021, then the GSTR-1 filing facility is blocked from the 1st of January 2022.
Now the Aadhaar authentication rules for GST refund and revocation application has been made mandatory from January 1 2022. CBIC is looking forward to everyone abiding by this new rule.
The provision for details of Invoice or Debit Note to the recipient to communicate is now changed. Section 109 of the Finance Act, 2021 seeks to amend section 16 of the CGST Act wherein sub-section (2), after clause (a), the clause shall be inserted, namely “(aa) the details of the invoice or debit note referred to in clause (a) has been furnished by the supplier in the statement of outward supplies and such details have been communicated to the recipient of such invoice or debit note in the manner specified under section 37.
The definition of Supply under GST includes more areas to avail tax from. This modification is done in order to classify the activity of a club or an association in supplying goods or services to its members as a ‘supply’ and therefore the same is liable for GST. As per GST rule, it is stated that Section 7(1)(aa) of the CGST Act has been inserted with retrospective effect from July 1, 2017, to broaden the definition of ‘supply’ by including the supply of goods or services or both between any ‘person’ (other than an individual) to its members or constituents or vice versa for consideration.
As per the new GST rule, the GST authorities have the full command to provisionally attach the property of a taxable individual or any other individual who is the beneficiary of the transaction, after initiation of the proceedings.
This amendment in the GST rule book has been introduced vide Section 115 of the Finance Act, 2021, which seeks to amend section 83 (1) of the CGST Act, which shall be substituted as follows:
Where, after the initiation of any proceeding under Chapter XII, Chapter XIV, or Chapter XV, the Commissioner is of the opinion that for the purpose of protecting the interest of the Government revenue it is necessary so to do, he may, by order in writing, attach provisionally, any property, including bank account, belonging to the taxable person or any person specified in sub-section (1A) of section 122, in such manner as may be prescribed.
After the announcement of this amendment, several stakeholders have shown disappointment because now the authorities have the power to force taxpayers into fulfilling tax demands without the need to follow due process of law. Thus there are chances that this amendment will be questioned in court on grounds of its constitutional validity.
The scoop of the GST rule in 2022 is filled with amendments and additions to the brim. Understanding and complying with these changes won’t be easy for the laymen hence taking support from our gst registration in bangalore experts at Mibook is going to make things uncomplicated.