Non-filers of monthly GST returns would be prevented from filing GSTR-1 from next year.

Non-filers of monthly GST returns would be prevented from filing GSTR-1 from next year.

Businesses that fail to file a summary return or pay monthly GST will be unable to file a GSTR-1 sales return for the following month beginning January 1 of the following year. The GST Council met in Lucknow on September 17 and resolved on a slew of steps to simplify compliance, including requiring firms to use Aadhaar authentication when filing refund claims.

These steps will aid in preventing revenue leakage from the Goods and Services Tax (GST), which was implemented on July 1, 2017.

With effect from January 1, 2022, the Council agreed to alter Rule 59(6) of the Central GST Rules to specify that a registered person will not be allowed to file Form GSTR-1 if he has not filed the previous month’s return in Form GSTR-3B.

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Currently, the legislation prohibits businesses from filing a report for outward supplies, or GSTR-1, if they have not filed a GSTR-3B for the previous two months.

Businesses file GSTR-1 for a given month by the 11th day of the following month, but GSTR-3B, which is used to pay taxes, is filed in a staggered fashion between the 20th and the 24th day of the following month.

The GST Council has also made the Aadhaar authentication of GST registration essential for filing refund claims and applications for registration revocation or cancellation.

New GST registration denial have a serious impact on our economy 

With effect from August 21, 2020, the Central Board of Indirect Taxes and Customs (CBIC) has notified Aadhaar authentication for GST registration.

The announcement also stated that if a business does not give an Aadhaar number, GST registration will only be approved after a physical inspection of the business location.

Businesses will now be required to link their GST registration with biometric Aadhaar in order to claim tax refunds and apply for revocation or cancellation of registration, according to the Council.

In its 45th meeting, the Council, which consists of central and state finance ministers, also determined that GST refunds will be paid into the same bank account as the PAN used to get GST registration.

Swiggy, Zomato to collect 5% GST on deliveries, food not to be hesitating

Swiggy, Zomato to collect 5% GST on deliveries, food not to be hesitating

In its proposal, the GST Council accepted food supply applications such as Zomato NSE -2,92% and Swiggy as restaurants and levied 5% of GST on items it supplied. 

In the main, these applications will now be required to raise 5% GST or goods and services tax, as the Finance Minister, Nirmala Sitharama indicated on Friday night following the meetings of the Council, from customers instead of the restaurant from which they pick up orders.

The end consumers who receive meals from GST registered restaurants would not have an extra tax burden. The fee will however plug unregistered establishments into tax avoidance.

These amendments will apply from 1 January 2022 to allow the operators of e-commerce to make improvements to their software to levy these taxes.

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“Transportation of passengers, by any form of the car (such as 1 January 2022), restaurants services offered through this services is liable to be taxed for e-commerce operators by some exclusions (such as 1 January 2022)” stated a statement of the Department of Finance on the GST Council decision.

“The decision to make food aggregators pay tax on restaurant supplies from 1 January 2012, despite the fact that they had collected food supply taxes to their clients, appears to have been founded on empirical underreporting data from restaurants. It is envisaged that when the restaurant is registered, the impact on the end consumer will be neutral. For unregistered supplies, a GST of 5% may be applicable; “Mahesh Jaising said Deloitte India Partner.

“Typically, the proposal can be put into practice in two ways. Option 1 would charge GST to the food aggregator and not charge GST to the eatery. This is comparable to cab aggregators, and the restaurant would have to have 2 different invoicing systems under this option –

one for supplies at the restaurant and one for supplies via aggregators.

Option 2, GST may continue to be charged by restaurants and the food aggregator is treated as a supplier (and buyer). This would have the same effect as in Option 1, as the tax collection from the food aggregator. The difference was that the food aggregator would have to claim credit “He added. He added.

According to estimations, Rs 2,000 crore in the previous 2 years has been the tax loss to be paid for alleged under-reporting in the food supply aggregates.

New GST registration denial have a serious impact on our economy

The GST presently lists these apps as Tax Collectors at source (TCS).

One of the factors that led to the drafting of such a proposal was that Swiggy/Zomato had no obligatory registration check and that these apps provided unregistered restaurants.

GST officers unearth over Rs 35,000 crore fraud in 2020-21, arrest 426 persons

GST officers unearth over Rs 35,000 crore fraud in 2020-21, arrest 426 persons

The GST officials have found over Rs 35,000 crore of tax fraud committed by misusing the input tax credit provided under the Goods and Services Tax (GST) system during a year-long crackdown on tax cheating. The CGST zones and the Directorate General of GST Intelligence (DGGI) booked around 8,000 instances involving false ITC NSE 1.11 per cent of over Rs 35,000 crore during the 2020-21 financial year, according to a CBIC release.

Entities can decrease the tax they have already paid on inputs when paying tax on output under the GST regime.

However, some have taken advantage of the provision by fabricating phoney invoices for inputs.

“The most common mode of evasion under the GST law is the misuse of the benefit provision of ITC,” according to the statement.

“From the very beginning of the GST regime, the Central Board of Indirect Taxes and Customs (CBIC) field formations have been regularly finding such incidents.”

During the 2020-21 fiscal year (April 2020 to March 2021), 426 people were arrested, including 14 professionals such as accountants, lawyers, and directors.

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“With effect from November 9, 2020, a statewide special drive against the false GST invoice was initiated, which is still ongoing,” it added, citing the high percentage of fake ITC availment and use.

“However, due to the serious Covid pandemic spread over the last two to three months and related safety concerns, the driver slowed down,” the statement said. “However, with the gradual lifting of lockdown and improved Covid-19 situation in various parts of the country, the department has resumed the drive-in coordinated action at the national level,” it added.

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During this month, the Directorate General of GST Intelligence and all Central GST formations intensified their crackdown on fraudsters who are causing the government exchequer to lose money.

During the current financial year, the Directorate General of GST Intelligence and CGST Zones under CBIC has detected over 500 cases involving 1,200 businesses and arrested 24 people as part of the nationwide drive.

The number of arrests made by CBIC police is one of the greatest in recent memory, according to the statement.

To catch the fraudsters, CBIC officials are employing the most up-to-date IT technologies, digital proof, and information from other government offices.

GST’s Applicability to the Reverse Charge Mechanism for Service Imports

In another case, the CGST Ahmedabad Zone filed an ITC fraud case worth Rs 38 crore against thirteen phoney organisations that were set up to pass on fraudulent ITC by submitting counterfeit iron and steel invoices.

“The enforcement drive against phoney invoice fraudsters and other GST evaders is anticipated to intensify,” the statement stated, adding that the goal is to “identify and book unscrupulous people involved in illicit operations to cheat the government exchequer.”