Important GST Changes Applicable from 2021

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In a move to ease the pressure on small taxpayers, the Central Government has decided to introduce Far-reaching new amendments have been made in the CGST Rule, Vide Notification No 94/2020- Central Tax with the purported purpose to tackle the menace of fake invoicing. In this article, we will discuss on Important GST changes applicable from 2021.

 GST Changes Applicable From 2021

1 ITC related changes

Rule 36(4) has been revised to the effect that the registered person is prohibited from availing the ITC in excess of the 5% (earlier it was 10%) of the eligible ITC for which the concerned traders have furnished the invoices. Also, 5% restriction shall come into effect from 01.01.2021 and hence the same shall apply to actual the ITC availed for December 2020.

2 Tax payment-related modifications

New Rule 86B has commenced restrictions on the practice of amount of ITC available in electronic credit ledger.As per the announced Rule, a registered taxpayer (where the price of taxable supply other than exempt supply and zero-rated supply surpasses INR 50 lakhs/month) cannot release his liability in excess of 99% by utilizing the ITC.

3 Suspension/cancellation of GST Registration

Rule 21 is modified to render that the registration of a person can be suspended in the next additional situations:

  • Serves input tax credit in violation of the provisions of section 16 of the Act.
  • Provides the details of outward supplies in FORM GSTR-1 for one or more tax periods which is in the abundance of the outward supplies declared by him in GSTR 3B for the specific tax periods.
  • Violates the provision of rule 86B.

4 New GST Registration

New GST Registration Rule 8 and 9 have been amended to provide for the biometric assurance for the applications for new registration. Also, the period for consenting the registration has been increased from 3 days to 7 days in the new Rule for GST Registration.

5 Suspension of the filing of GSTR 1

Rule 59 has been modified to NOT permit the taxpayer to file GSTR 1 if,

  • A taxpayer not furnished the return in FORM GSTR-3B for the preceding two months.
  • A taxpayer has not furnished the return in FORM GSTR-3B for preceding tax period (for taxpayer filing quarterly returns)
  • A taxpayer is required to discharge the tax liability of at least 1% by cash and he has not furnished the return in FORM GSTR-3B for preceding tax period.

6 E-way bill

Rule 138(10) will be modified on 01.01.2021 to curtail the available travel time by 50%. As per the existing rule, the validity of the E-way bill generated on 01.01.2021 would have expired on 07.01.2021 but, Now as per the new amendment, the same will expire on 04.01.2021 and hence the goods must reach the destination within the announced time frame.

In case, you need any kind of guidance related to the GST Return Filing or GST Registration, please feel free to contact our business advisors at 8881-069-069.

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