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Important points for taxpayers under GST

 Important points for taxpayers under GST for 2020 Part-1

This article briefly discusses such top 6 points/changes under the GST applicable for New Year 2020

1.ITC can be claimed up to a limited Rate:

 Sometime in the past, the beneficiary can claim the ITC independent of whether the supplier has booked his liability in this regard or not Let me let you know with an example:

We informed that the government demands to issue 3 forms i.e.

 GSTR-1 for the supply of outward (Filed by the supplier)

GSTR-2 for  the supply  of inward (Filed by the beneficiary)

GSTR-3 form is basically for Summary Return for  Tax payment (Filed by the supplier)

In any case, because of a lot of compliance and absence of information about the new law, the government has issued only 2 forms i.e. GSTR-1 for outward Supply (Filed by supplier) and 

GSTR-3B for summary return (Also Filed by supplier)

In this case, there is no form was recommended for a beneficiary and many people took the advantage for this by claiming the ITC in respect of supplies which in actual never been made. The office needs to face a lot of challenges to recognize this sort this kind of person.

Although, once in a while, the supply was really made the supplier neglected to enter the subtleties of such supplies in the return and because of which the beneficiary could not claim the ITC

To remove this inconsistency, the government has decreased the rate of ITC for profit, in respect of supplies which were not appeared by the supplier in GSTR-1, by issuing a notification vide Notification No. 75/2019 – Central Tax dated 26th  December 2019.

From  1st  January 2020, the rate will be 10%. In simple words, In case, the supplier has not revealed the information of supplies made by him in the return, then in respect of such supplies, the beneficiary of such supply will be eligible to assume the credit of ITC only up to the 10% of the aggregate sum of ITC which will be eligible to the beneficiary in case, the supplier has revealed the information in his return.

previous vide Notification No. 49/2019 – Central Tax dated 9th  October 2019, inter alia, added a new sub-rule (4) to Rule 36 of the CGST Rules, the government has declared the rate of 20% however, presently the rate will be 10%. Here the supply includes debit notes.


 2. Blocking of ITC by the commissioner under new Rule 86A

According to new Rule 86A of the CGST Rules, added vide Notification No. 75/2019- Central Tax dated 26th  December 2019, if the commissioner has a reason to accept that the beneficiary has:

  • Availed the credit illegally i.e. the beneficiary has taken the supplies from the non-existing persons or from a person not leading any business from wherever for which registration has been obtained.

For Example, Mr. A is a dealer. He got the GSTN number of his helper by giving the wrong documents and taken the invoices from him and took the credit in this regard. Hence, in case the commissioner has made the evaluation of his helper at that point he will come to realize that the entire exchange was made for fraudulent intention. 

  • Availed without receipt of goods or services: Even today, we have seen a lot of people who charged the GST but they did not pay back the tax to the government The said notice will catch such sort of individual and duty the penalty and interest.
  • Claimed the ITC according to the tax invoices received from the supplier in regard of which the tax charged by him, has not been paid to the Government.

At that point, he will refuse such ITC by debiting the amount in the electronic credit register which would be in any case utilized for discharging of tax liabilities or claiming a refund of any unutilized amounts in the tax register. However, the said provision will be applicable only when the commissioner has a reason to believe in this regard.

3. Blocking of a generation of E-way Bill, if GSTR-1 not filed

According to the  Notification No. 75/2019 – Central Tax dated 26th  December 2019, Rule 138E of the CGST Rules, from 11th  January 2020, in case, any taxpayer did not file his GSTR-1 for a continuous period of 2 months or quarter all things considered, at that point from, then after that, he will not be able to generate the E way Bill until he filed the return with interest. Hence it is recommended for the taxpayer to timely file it’s GSTR-1 and GSTR-3B in the year 2020 to avoid the penalty and interest.

4. Mandatory E-Invoicing under GST

In terms of Notification No. 70/2019 – Central Tax dated 13th December 2019, w.e.f.1st  April 2020, those registered people whose aggregate turnover (including exempt supplies) exceeds Rs. 100 crores in a financial year, on PAN India basis, shall compulsorily generate e-invoices in the case of B2B supplies and report to the notified common portals of GST.

5. Creating QR codes for B2C supplies

In terms of Notification No. 71/2019 – Central Tax and Notification No. 72/2019 – Central tax, both dated December 13th, 2019, w.e.f. 1st April 2020, It gets compulsory for the registered person, having an aggregate turnover exceeding Rs.500 crore, for making Quick Response Code (QR Code) to an unregistered person (B2C invoice).

6. Replacing old returns with new returns from April 2020

In the 31st meeting of the GST council, it has been decided that from 1st April 2020 new GST return system will be applicable for taxpayers. It will increase the official compliance and will help to reduce the tax evasion to its maximum possible amount. In order to smoothen the change to the new return system, vide a press release dated 11th June 2019 a change plan was approved by the Council and the same was released for information.

The significant change brought is computerization. According to the new return system, 2 new forms have been issued i.e., GST FORM ANX- 1 and GST FORM ANX- 2 which will be applicable from 1st April 2020. These forms will be filed as supplements to the main return form which is GST RET-1/ RET-2/ RET-3. GST ANX- 1 (supplements of supplies) shall contain the details of outward supplies, import of goods and services and inward supplies taken but which are liable under reverse charge mechanism.

GST ANX-2 (supplements of inward supplies) shall have the details of inward supplies from registered persons, imports made, and supplies received from an SEZ unit/developer.

31 Mar

Mohit Bisht
Mohit Bisht

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