GST – Imp Amendments proposed in Budget 2021

1. Exporter liable for penalty equal to 500% of refund claimed if Input taken on invoice obtained by fraud, collusion, wilful misstatement

2. Input Tax credit can be availed when the supplier furnished the details of the invoice in GSTR-1 and such details communicated to the recipient (as shown in GSTR-2A/2B)

3. GST Audit is not required as Govt. Scraps GST Audit and filing of 9C Requirement.

4. GST Annual return may include a self-certified reconciliation statement reconciling the value of supplies b/w GST returns and audited annual financial statement

budget 2021

5. Interest on delayed payment of GST shall be payable on that portion of GST which is paid in cash

6. Recovery of GST when registered person filing GSTR-1 not GSTR-3B in any of following modes

  • By detaining and selling the goods belonging to defaulter or
  • Recovery from any other person who owes money to defaulter or
  • Attachment of immovable property belonging to defaulter

7. Seized or detained goods shall be released on payment of following penalty :-

  • Where the owner of goods comes forward – penalty equal to 200% of tax payable
  • Where the owner of goods does not come forward – penalty equal to 50% of the value of goods
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8. Where a person fails to pay penalty within 15 days, goods shall be sold or disposed and conveyance (truck, etc) shall be released on payment of a penalty of Rs 1 lakh whichever is less

9. New section 151 proposed where Commissioner or any officer authorized by him direct any person to furnish information relating to any matter dealt with in connection with GST act.

10. Exporters liable to deposit the refund received along with interest in case of non-receipt of sale proceeds within the time limit prescribed under the Foreign Exchange Management Act, 1999

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Required Conditions to Claim Input Tax Credit

The enrolled individual will be qualified for ITC on a supply in particular if ALL the accompanying four conditions are satisfied:

1. Ownership of tax paying document [Section 16(2)(a) read with rule 36 of the CGST Rules]

ITC can be benefited based on any of the accompanying documents:

I) Invoice given by a provider of goods or services benefits

ii) Invoice gave by beneficiary (getting goods and services benefits from unregistered provider) alongside confirmation of payment of tax (in case of reverse charge)

iii)A debit note given by provider

iv) Bill of entry or comparative document given under Customs Act

v) Revised invoice

vi) Document given by Input Service Distributor

The docs premise which ITC is being taken ought to contain at least the accompanying details:

  • Measure of tax charged
  • Details of goods or services
  • All estimation of stock of goods as well as services
  • GSTIN of the provider and beneficiary
  • Place of supply if there should arise an occurrence of inter state supply

No ITC of tax paid towards requests including fraud[Rule 36(3)]: Tax paid in compatibility of any order where any request has been affirmed by virtue of any fraud, willful error or concealment of facts can’t be benefited as ITC

2. Receipt of the goods and/or services [Section 16(2)(b)]

The enrolled individual taking the ITC must have received the goods and/or services.

“Bill to Ship to” Model even included: Under this model, the products are delivered to a third party on the direction of the client (enlisted individual) who buys the goods from the seller (provider) i.e., the customer (enrolled individual) who buys such products doesn’t get the said products.

In any case, in such a situation, section 16(2)(b) considers that the enlisted individual (customer) has received the products. As it were, delivery of products to someone else on the direction of the enrolled individual by method for transfer of docs of title to goods or generally either before or during the movement of goods, is regarded to be the receipt of products by the enlisted individual. Along these lines, ITC will be accessible to the enrolled individual on whose request the products are delivered to a third individual.

Example– A will be a dealer who submits an order on B for a consignment of soda ash. A gets a purchasing request from C for a similar amount of soda ash. A educates B to deliver the goods to C, and thus he raises an invoice on C. In spite of the fact that the products are not physically received at the premises of A, section 16(2)(b) permits ITC of the goods to A.

3. Tax leviable on supply really paid to Government [Section 16(2)(c)]

Tax ought to really have been paid, with money or through use of ITC, on the goods and/or services for which ITC is being taken.

4. Filing of return [Section 16(2)(d)]

The enrolled individual taking the ITC probably filed his return under section 39.

Enquire with Certicom Consulting in case of any further queries.

Conditions made to claim Input tax credit

The enrolled individual will be qualified for ITC on an inventory in particular if ALL the accompanying four conditions are satisfied:

  1. Possession of tax paying document [Section 16(2)(a) read with rule 36 of the CGST Rules]

ITC can be benefited based on any of the accompanying documents:

I) Invoice issued by a provider of goods or services

ii) Invoice issued by beneficiary (getting goods or services from unregistered provider) alongside confirmation of payment of tax (if there should arise an occurrence of reverse charge)

iii)A debit note issued by provider

iv) Bill of entry or similar document recommended under Customs Act

v) Revised invoice

vi) Document issued by Input Service Distributor

The documents premise which ITC is being taken ought to contain atleast the accompanying details:

 

  • Measure of tax charged
  • Describing goods or services
  • All out estimation of supply of goods as well as services
  • GSTIN of the provider and beneficiary
  • Place of supply in case of inter State supply

 

No ITC of tax paid towards requests including fraud [Rule 36(3)]:

Tax paid in compatibility of any order where any demand has been affirmed because of any fraud, resolved error or concealment of facts can’t be benefited as ITC

 

  1. Receipt of the goods and/or services [Section 16(2)(b)]

The registered individual taking the ITC probably got the goods and/or services.

“Bill to Ship to” Model likewise included:

Under this model, the goods are delivered to an outsider on the direction of the client (registered individual) who buys the products from the seller (provider) i.e., the client (registered individual) who buys such goods doesn’t get the said goods.

However, in such a situation, section 16(2)(b) regards that the enlisted individual (client) has received the products. In other term, delivery of products to someone else on the direction of the enlisted individual by method for transfer of docs of title to goods or generally either previously or during the movement of products, is regarded to be the receipt of products by the enrolled person. So, ITC will be accessible to the enrolled person on whose request the products are delivered to a third person.

For Example – A will be a person who puts in a request on B for a consignment of soda ash. A gets a purchasing order from C for similar amount of soda ash. An educates B to deliver the products to C, and thus he raises an invoice on C. Despite the fact that the goods are not physically received at the premises of A, section 16(2)(b) permits ITC of the products to A.

 

  1. Tax leviable on stock really paid to Government [Section 16(2)(c)]

Tax ought to really have been paid, with cash or through usage of ITC, on the goods and/or services for which ITC is being taken.

 

  1. Filing of return [Section 16(2)(d)]

The registered individual taking the ITC must have filed his return under section 39.

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