This Tax Alert summarizes recent notifications [1] and
circular [2] issued by the Central Board of Indirect Taxes and
Customs (CBIC) under the Goods and Services Tax (GST).
The key changes are:
·
With effect from 1 January 2021,
e-invoicing will be applicable to taxpayers having aggregate turnover exceeding
INR100 crores in the preceding financial years.
·
Amendment in section 39 of the Central
Goods and Services Tax Act, 2017 (CGST Act) to enable quarterly filing of
return by certain class of taxpayers, has been notified w.e.f. 10 November
2020.
·
The scheme of quarterly return filing along
with monthly payment of taxes (QRMP scheme) for taxpayers having aggregate
turnover up to INR5 crores was recommended by the GST Council in its 42nd
meeting on 5 October 2020[3].
The scheme shall come into effect from 1 January 2021.
·
Necessary amendments have been carried out
in the Central Goods and Services Tax Rules, 2017 (CGST Rules) to implement the
scheme.
·
Separate notification has been issued
regarding the procedure for making payment of tax liability by quarterly return
filers.
The circular clarifies various issues
relating to QRMP scheme including applicability of interest and late fee by way
of illustrations.
Comments
a. With the e-invoicing implementation date
for taxpayers having more than INR100 crores turnover approaching soon,
mid-size companies may need to ramp up their processes and IT systems to enable
compliance with the new invoicing regulation.
b.
The scheme
of quarterly return with monthly payment is likely to benefit small taxpayers
and help in reducing compliance burden.
c.
Invoice
furnishing facility may help the recipient in availing credit in the same month
without waiting for the supplier to file GSTR-1 and thereby, avoid working
capital blockage. Currently, businesses need to exhaust their 10% limit under
rule 36(4) for claiming such credit.
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