Recent GST Updates from the GST Council

Last Updated at: November 23, 2020
1230
vAT
The Centre and states are looking to further tighten the GST registration process and legal measures to deal with the rising cases of fake invoicing. A meeting of the law committee of the GST Council held on 16th November, 2020  discussed these issues, finance ministry sources said. It is also learnt that data analytics techniques will be used to identify such taxpayers, who are suspected to be indulging in fraudulent activities. 

 

Launched on April 1, 2017, the Goods & Services Tax (GST) applies to all Indian service providers (including freelancers), traders and manufacturers, once their supply turnover crosses Rs. 20 lakh. The GST is an all-in-one tax that subsumes a variety of state (VAT, Entertainment Tax, Luxury Tax, Octroi) and central taxes (CST, Service Tax, Excise Duty). GST is to be charged at every step of the supply chain, with full set-off benefits available.

Goods & Services Tax Council is the constitutional body for making recommendations to the Union and State Government on issues related to Goods and Service Tax. , and other members are the Union State Minister of Revenue or Finance and Ministers in-charge of Finance or Taxation of all the States.

Get Your Business GSTIN Number

Following are the recent updates enacted by the GST Council;

  1. Composition scheme limit is now 1.5 crores. Earlier composition scheme was applicable only if your aggregate turnover consists of goods. However, now if services turnover is less than five lacs or 10% of total turnover – whichever is higher -you are still eligible for composition scheme.
  1. Return filing is going to be quarterly from October – for clients having a turnover of fewer than 1.5 crores. It is going to be like TDS – monthly payment but quarterly return. Different due dates are going to be prescribed so that pressure on the portal will be comparatively less.
  1. RCM on purchases from unregistered people will be applicable only for the large organizations. Limits are going to be notified soon.
  1. Amendments in input tax credit relating to motor vehicles – Currently all motor vehicles related credit is disallowed unless you are into Motor vehicles selling or hiring business.

From now

     – If the capacity of the vehicle is more than 13 people – credit can be taken by all.

     – Further clarity is provided that – not just motor vehicle credit – even maintenance and repair, insurance credit cannot be taken on a motor vehicle – if capacity is less than 13 people.

  1. ITC is usually disallowed on all employee welfare expenses. However, If employees are being provided food and travel benefits as per any law, then credit can be taken.

    – Please note if employees are provided food and travel “as per any mandated law” then only it is eligible. Vakilsearch took us to a party – which is not mandated by law in such case Vakilsearch cannot take credit of that expense.

    – Even arranging travel benefits is also mandatory by specific laws – especially during night shifts – only in that case, ITC is eligible.

  1. E-commerce operators – if they are not aggregators. If they are selling their products – now need not undertake registration if their value of supply is less than 20 lacs.
  1. Except for Manipur, Mizoram, Nagaland, and Tripura – for all other states registration limit is 20 lacs now.
  1. Once you apply for cancellation of registration – there is no need to file returns further – unless there is a rejection by the appropriate AO.
  1. Credit/Debit notes can be raised for more than one invoice at the same time now. (Technically it is not possible for now – until portal is changed accordingly)
  2. Payment of exports to be received in foreign currency – to allow GST exemption. Now when you are exporting to Nepal, and Bhutan even if you receive in INR it is still eligible.
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Recent GST Updates from the GST Council

1230
The Centre and states are looking to further tighten the GST registration process and legal measures to deal with the rising cases of fake invoicing. A meeting of the law committee of the GST Council held on 16th November, 2020  discussed these issues, finance ministry sources said. It is also learnt that data analytics techniques will be used to identify such taxpayers, who are suspected to be indulging in fraudulent activities. 

 

Launched on April 1, 2017, the Goods & Services Tax (GST) applies to all Indian service providers (including freelancers), traders and manufacturers, once their supply turnover crosses Rs. 20 lakh. The GST is an all-in-one tax that subsumes a variety of state (VAT, Entertainment Tax, Luxury Tax, Octroi) and central taxes (CST, Service Tax, Excise Duty). GST is to be charged at every step of the supply chain, with full set-off benefits available.

Goods & Services Tax Council is the constitutional body for making recommendations to the Union and State Government on issues related to Goods and Service Tax. , and other members are the Union State Minister of Revenue or Finance and Ministers in-charge of Finance or Taxation of all the States.

Get Your Business GSTIN Number

Following are the recent updates enacted by the GST Council;

  1. Composition scheme limit is now 1.5 crores. Earlier composition scheme was applicable only if your aggregate turnover consists of goods. However, now if services turnover is less than five lacs or 10% of total turnover – whichever is higher -you are still eligible for composition scheme.
  1. Return filing is going to be quarterly from October – for clients having a turnover of fewer than 1.5 crores. It is going to be like TDS – monthly payment but quarterly return. Different due dates are going to be prescribed so that pressure on the portal will be comparatively less.
  1. RCM on purchases from unregistered people will be applicable only for the large organizations. Limits are going to be notified soon.
  1. Amendments in input tax credit relating to motor vehicles – Currently all motor vehicles related credit is disallowed unless you are into Motor vehicles selling or hiring business.

From now

     – If the capacity of the vehicle is more than 13 people – credit can be taken by all.

     – Further clarity is provided that – not just motor vehicle credit – even maintenance and repair, insurance credit cannot be taken on a motor vehicle – if capacity is less than 13 people.

  1. ITC is usually disallowed on all employee welfare expenses. However, If employees are being provided food and travel benefits as per any law, then credit can be taken.

    – Please note if employees are provided food and travel “as per any mandated law” then only it is eligible. Vakilsearch took us to a party – which is not mandated by law in such case Vakilsearch cannot take credit of that expense.

    – Even arranging travel benefits is also mandatory by specific laws – especially during night shifts – only in that case, ITC is eligible.

  1. E-commerce operators – if they are not aggregators. If they are selling their products – now need not undertake registration if their value of supply is less than 20 lacs.
  1. Except for Manipur, Mizoram, Nagaland, and Tripura – for all other states registration limit is 20 lacs now.
  1. Once you apply for cancellation of registration – there is no need to file returns further – unless there is a rejection by the appropriate AO.
  1. Credit/Debit notes can be raised for more than one invoice at the same time now. (Technically it is not possible for now – until portal is changed accordingly)
  2. Payment of exports to be received in foreign currency – to allow GST exemption. Now when you are exporting to Nepal, and Bhutan even if you receive in INR it is still eligible.
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