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The Ministry of Finance has said that companies with monthly turnover of more than Rs 50 lakh will have to pay at least one percent Goods and Services Tax (GST) liability in cash.
The new GST rule will come into effect from January 1, 2021
CBIC has introduced Rule 86B in the GST rules, which will come into force from January 1, 2021. This rule allows only up to 99 percent of the input tax credit (ITC) to be used for settling GST liability. CBIC has stated that if the value of taxable supplies exceeds Rs 50 lakh in a month, no registered person can use the amount available in the electronic credit ledger to settle more than 99 percent tax liability. GST exempted products or zero rate supplies will not be included in calculating the limit of business.
Also Read: Belated Returns: How to file ITR after due date
However, if the managing director of the company or any partner has paid income tax of more than one lakh rupees or the registered person has received a refund of more than one lakh rupees on the input tax credit unused during the previous financial year, then it is Will not apply Apart from this, through the amendment of GST rules, the CBIC has curbed the filing of details of external supply in GSTR-1 for those companies which have not paid the pre-tax period by filing GSTR 3B. The e-way bill is still blocked for not filing GSTR 3B. But if we do not do this now, GSTR-1 will also be stopped.
Also Read: Tax Deduction Tips for those Who Want to Save This Year
365 people arrested for registering 12,000 cases of input tax credit fraud
Finance Minister Nirmala Sitharaman tweeted that the government has issued this notification based on the recommendations of the Law Committee of the GST Council to prevent the fraud of fake GST bills. Through this, those who take ITC wrongly will be banned. CBIC said that so far it has arrested 365 people by registering 12,000 cases of input tax credit fraud. In the last six weeks, only 165 such people have been arrested. EY’s tax partner Abhishek Jain said that the government has limited the payment of tax liability to 99 percent through an input tax credit on the taxable business of more than Rs 50 lakhs monthly. Jain said, “The aim of this step is to prevent companies from misusing ITC through fake bills.”
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