At its first meeting after lock-down, the Goods and Services Tax (GST) council eased the enforcement burden for small companies by cutting late fees and by halving their interest rates.
What is GST?
The Goods and Services Tax has replaced a lot of Indian indirect taxes, like excise duties, VAT, utilities taxes, etc. The Goods and Service Tax Act, which came into force on 1st July 2017, was introduced in parliament on 29 March 2017.
In other words, GST applies to the production of products and services. The Goods and Services Tax Law of India constitutes a comprehensive multi-stage destination fee for any added value. GST is a single national indirect tax statute for the entire country. The GST system applies to tax at every point of sale. For intrastate transactions, central GST and state GST are paid. All inter-state sales are conferred on the integrated GST.
Finance Minister Nirmala Sitharaman has announced additional actions aimed at simplifying the filing of tax returns and reducing the compliance burden for small businesses. The 42nd meeting of the GST Council made these recommendations. These follow a number of previously announced measures to facilitate compliance. The Goods and Services Tax Board agreed to further reduce the enforcement burden of companies by offering a reduction in the late-free payments and interest due on late payments. For taxpayers, the late fee and interest was reduced and the late fee was waived entirely for tax-free people.
The key announcements are here:
New framework for Tax Filing
In order to assist firms in providing data in time, Sitharaman has announced a new framework. If outbound supply information or GSTR-1 is filed in time for example, this means:
- Help a taxpayer view the reverse charge available tax credit from all sources, such as home supplies, imports or online payments well before the payment dates are due.
- Allow the GST system to fill back information automatically. GSTR-3B.
- In order to ensure that input tax credit and tax liability are accurately captured, taxpayers must file GSTR-1 before GSTR-3B or summary return.
The administration has also revised form filing deadlines
- The date of filing of the GSTR-1 shall be revised from January until the 13th of the following month, which is after the quarter end.
- As from January 1 and April 1 of next year, both tax liability features from the taxpayers’ GSTR-1, and the supplier’s GSTR-1 tax credit will apply to monthly tax filers.
- From January onwards the quarterly returns will be filed by companies with a total turnover below Rs 5 Crore. They can cover the final quarter by a self-generated challan up to 35% of their net cash-tax liability.
- Continued measures to simplify the enforcement, in particular those relating to the car community, with GST taxpayers’ January returns are good for businesses.
Through these adjustments, companies can plan for them within the next three months so that they can meet the January deadlines of next year, which will involve certain improvements in the process and the system. The suggested improvements would simplify the implementation structure and prevent the introduction of a completely new return mechanism. Although the newly-implemented return to recognize eligible and inadmissible input tax credits seems useful, the GSTR-2B does not appear complete as blocking credit identification currently does not cover the requirements for classifying inadmissible credits.
Other Modifications
In the form of its GSTR-1 code to obtain more details on the type of products sold in the country, the government requested taxpayers with annual turnover above Rs 5 crore to announce the six-figure harmonized framework nomenclature. Corporations below Rs 5 crore shall conform to the four-digit HSN code on the provision of goods and services from company to company. All the taxpayers will receive the 8 digit HSN code for the informed supply class separately from the Government. The GST Council has also introduced revisions to the Core GST Regulations to incorporate these new forms.
Conclusion
Getting GST registration as a small business is really important. You can apply for GST registration online within minutes. All you need to do is visit the Finserv MARKETS website or app, where you can get your business GST-proof.
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