In an effort to reduce the burden of compliance on small businesses, the government has blazoned some procedural variations in the GST laws, especially those relating to the threshold, for filing periodic returns for the 2021 – 22 financial year.
The Goods and Services Tax (GST) Council discussed the variations at its meeting last week.
Businesses can now pay levies on the GSTN point using the IMPS and UPI payment styles, thanks to changes announced by the Central Board of Indirect Taxes and Customs, or the CBIC.
The streamlined rules for pure businesses have combined periodic deals of over INR 2 crore, allowing for the filing of periodic returns for the financial year ending March 31, 2021.
According to an expert partner in indirect tax at KPMG in India, these advancements will ease the burden of filing periodic returns under the GST registration, with a threshold of less than INR 2 crore. They will help small businesses comply with regulations.
Nonetheless, no extensions have been given for any other financial period.
According to experts, a reasonable extension has been granted in connection with the delayed refund operation forms for the COVID period, from March 1, 2020, to February 28, 2022. This will enable numerous exporters to capitalize on the remittances that are currently frozen in action.
According to experts, the government has extended the GST limitation period for issuing notices to taxpayers who haven’t paid the short-paid duty twice in the past due to the COVID-19 situation in India. An analogous revision of the time restriction applies to form refunds.
Although the government aims to curb income leakage, this measure extends the period during which entities are subject to departmental checks, verifications, and examinations. Having stated that, this adaptation also makes sure that licit taxpayers’ requests for refunds aren’t dismissed,” And Jain.
According to Mohan, a system for calculating interest on late duty payments has been unveiled, which will help taxpayers directly calculate their duty arrears.
According to the modified guidelines, a standard statement relating to the non-applicability of an e-invoice will be published on every tab generated by an MSME supplier.
Also, with the same visage, a cash tally balance can be moved from one GST-registered establishment to another. At its meeting on June 28–29, the GST Council, which comprises state and central finance ministers, accepted the variations.
GST: COMPANIES WORTH INR 5 CRORE TO E-INVOICE MANDATORILY FROM JANUARY 2023
According to Vivek Johri, chairman of the Central Board of Indirect Taxes, the requirement for GST e-invoicing will likely be lowered from the current threshold of INR 20 crore to INR 5 crore as of January 1, 2023, in order to plug leaks further, ensure better compliance, and aid in policy development.
Experts believe that increasing coverage to significantly above INR 5 crore would provide them with instrumental data for determining policy. And that they may examine the data at the four-digit HS (Harmonized System) level to gain insight into which industries are the most significant contributors to the GST, which industries have greater potential but are not contributing as expected.
They also stated that the necessity for invoice matching itself disappears if all returns can be created using e-invoices, but a flawless filing method remains available. That is a really significant benefit. E-invoice adoption will ultimately become widespread.
The tax authorities will also be better equipped to examine patterns in the use of input tax credits across industries and filter out bogus input tax credit (ITC) applications, which have become a significant problem for the government. Over ₹ 50,000 crore worth of fake Input Tax Credit (ITC) has been discovered in the last 1.5 years. Beginning on October 1, 2020, businesses with a turnover of more than INR 500 crore were included in the scope of e-invoicing for business-to-business (B2B) transactions. Firms in the second phase are required to start issuing electronic bills from January 1, 2021, if their annual revenue exceeds ₹100 crore. From April 1, 2021, businesses with a turnover of more than INR 50 crore were required to provide electronic invoices. From April 1, 2022, it will also apply to companies with annual revenues of between INR 20 crore and INR 50 crore.
More taxpayers have entered the system as a result of the e-invoice, increasing it from around 1.25 crore in October 2020 to roughly 1.38 crore at this time.
The recent increase in GST collections, from an average of INR 0.9 trillion in FY18 to INR 1.23 trillion in FY22, and potentially averaging INR 1.4-1.5 trillion in FY23, has been mainly attributed to these system reforms. The five-year guaranteed GST compensation for shortfall expired on June 30.
One of the criticisms of GST after it came into effect on July 1, 2017, was that the tax authorities were unable to streamline the return filing process and perform invoice matching between buyers and suppliers, which raised concerns about potential revenue leakages and non-compliance going unnoticed.
