1) Restriction on claim of ITC as per Rule 36(4).
·
The claim of ITC in respect of invoices not furnished
by the corresponding vendors has now been restricted
to 5% of the credit available in GSTR 2B. This limit earlier was 10% of ITC
available. This would be mean that a taxpayer’s ITC claim shall now be restricted
to 105% of the Credit reflected in his GSTR 2B.
·
Any claim exceeding the specified limit shall result
in violation of CGST Act read with rules which may result into suspension of
GSTIN as described above. The provision shall come into effect from 1st January 2021.
2) GSTR 1 to be blocked in case of
non-filing of two GSTR 3B.
·
Where a taxpayer fails to file GSTR 3B for two
subsequent months, his GSTR 1 shall now be blocked. Earlier non filing of GSTR
3B used to result in blocking of E-way Bill facility but from now on it shall
also result in blocking of GSTR 1 of the taxpayer. Similarly, for quarterly
return filers, the taxpayer failing to file GSTR 3B for the preceding quarter
shall not be permitted to file GSTR 1 of subsequent quarter.
3) Time limit for GST Registration
increased.
·
The time for system-based registration has been
enhanced from 3 days to 7 days. That means, now department shall be required to
review and grant registration within 7 days against 3 days as provided earlier
from the date of filing of registration application.
·
In cases applicant does not do adhaar authentication
or where department feels fit to carry out physical verification the time limit
for grant of registration shall be 30 days instead of 7 days.
4) More Powers for cancellation of
GSTIN to Department.
·
The officer can proceed for cancellation of GSTIN
where a taxpayer avails Input Tax Credit (ITC) exceeding than that permissible
in Section 16. Clause (e) has been inserted in Rule 21 of CGST Rules 2017.
5) Taxable value and tax both should
be in synchronization between GSTR 1 and GSTR 3B.
·
The liability declared in GSTR 3B is less than that
declared in GSTR 1 in a particular month, department may now proceed with
cancellation of GSTIN. There might be some practical difficulties in
implementing such a provision as there are number of corrections which are made
in GSTR 3B which may result in lower tax liability as compared with GSTR 1. The
clause (f) newly inserted talks about details of outward supply to which we
understand that Taxable value and tax both should be in synchronization between
GSTR 1 and GSTR 3B.
6) Taxpayers Registration can be
cancelled without opportunity of being heard.
·
Now, no opportunity of being heard shall be given to a
taxpayer for suspension of GSTIN, where the proper officer (PO) has reasons to
believe that the registration of person is liable to be cancelled. The words
“opportunity of being heard has been omitted from clause (2) of Rule 21A.
7) Notice in FORM GST REG 31.
·
Significant deviation/anomalies between details of
outward supply between GSTR 3B and GSTR1 or inward supplies (ITC) between GSTR
3B and GSTR 2B which indicate contravention of Act, department shall now serve
a notice in FORM GST REG 31 to call explanation as to why GSTIN should not be
cancelled.
·
Taxpayer shall be required to submit his reply within
30 days of such notice being served to him.
8) GSTIN is suspended no refund.
·
Where a GSTIN is suspended no refund u/s 54 of CGST
Act 2017 can be availed by the taxpayer. This means that first GSTIN Suspension
proceedings have to be closed before applying refund.
9) Restricted to avail ITC as per rule
86B.
·
Taxpayer whose is restricted to avail ITC as per rule
86B shall also not be permitted to file GSTR 1 where he has not filed GSTR 3b
for the preceding tax period.
·
New Rule 86B shall be affected from 1st January 2021
wherein restriction has been placed on setting off more than 99% of tax
liability from Input tax credit where the value of taxable supplies other than
exempt supply and zero rated supply exceeds Rs. 50 lakhs in a month. Though few
exceptions have been provided to this rule which are as follows:
(i) Where the
taxpayer has paid Income Tax exceeding Rs. 1 lakh in two preceding financial
year.
(ii) Where
taxpayer has received refund exceeding Rs. 1 lakhs u/s 54 of CGST Act 2017.
(iii) Where
taxpayer has used electronic cash ledger to pay of liability on outward
supplies which cumulatively makes 1% of the total liability up to the said
month
(iv) Where a person is a Government
Department, Public Sector Undertaking (PSU), local authority or a statutory
body.
10) Validity of Eway bill to 200 Kms
in a day.
·
Earlier one day was permitted for distance up to 100
kms under e way bill provision. Now the same has been increased to 200 kms.
This means that only one day validity shall be granted to cover a distance up
to 200 kms which was earlier 100 km.
Source - www.gst.gov.in
Disclaimer: The article is based on the relevant provisions and as per the information existing at the time of the preparation. In no event i shall be liable for any direct and indirect result from this article. This is only a knowledge sharing initiative.
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