Prateek Arya & Company - PAC

*Some Important Key Decisions on 45th GST council Meeting*

▪️Earlier Section 50 (3) of CGST Act 2017 levies interest on *Undue or Excess Credit Claimed*, Now post GST Council meeting it has been decided to retrospective amend the section to levy interest @ 18% on *“ineligible ITC which is availed and utilised”* meaning thereby interest is to be paid by a taxpayer on *“ineligible ITC availed and utilized” and not on “ineligible ITC availed”*

▪️Ecommerce Operators are being *made liable to pay tax on following services provided through them* [w.e.f.1stJanuary,2022]
a. Transport of passengers, by any type of motor vehicles through them.

b. Restaurant services provided through it with some exceptions

▪️Services by *cloud kitchens/central kitchens* are covered under ‘restaurant service’, and attract 5% GST [ without ITC].

▪️Rule 36(4) of CGST Rules 2017 , to be amended once the clause (aa) to 16(2) will be inserted , which will give *an end to the provisional credit* and only that can be availed which appearing on portal ( 2A/2B ) and thereby 3B will be legally recognized as return.

▪️Late fee for delayed filing of FORM GSTR 1 to be auto populated and collected in next open return in FORM GSTR 3B.

▪️Rule 59(6) to be amended w.e.f. 01.01.2022 to provide that *filing of GSTR 1 shall not be allowed if GSTR 3B for the preceding month has not been furnished.*

*UDIN* - ICAI Council has decided UDIN can be generated within *60 days* (in place if 15 days). This is also in view of SQC and SA.

🎓
*GST Updates:*

↪️Section 35, 44 and Rule 80 amended w e f 1st August 2021
↪️Form 9 and 9C is also amended
↪️GST Audit by CA/CMA abolished from F Y 2020-21, now self certification of Form 9C by Company.
↪️No annual Return (Form GSTR 9) is required to be filed for F Y 2021-21 upto aggregate Turnover of Rs 2 Crores and No requirement to file Form 9C upto aggregate Turnover of Rs 5 Crore
↪️Relevant Notifications:
Notification No 29/2021 Central Tax dated 30.07.2021
Notification No 30/2021 Central Tax dated 30.07.2021
Notification No 31/2021 Central Tax dated 30.07.2021

Filing Directors KYC (DIR-3 KYC) is a mandatory ROC filing for every person who has been allotted a DIN on or before 31st March 2021. The last date of filing the director KYC is 30th September 2021..

Amnesty Scheme to provide relief to taxpayers regarding late fee for pending returns:-

To provide relief to the taxpayers, late fee for non-furnishing FORM GSTR- 3B for the tax periods from July, 2017 to April, 2021 has been reduced / waived as under: -

i. late fee capped to a maximum of Rs 500/- (Rs. 250/- each for CGST & SGST) per return for taxpayers, who did not have any tax liability for the said tax periods;

ii. late fee capped to a maximum of Rs 1000/- (Rs. 500/- each for CGST & SGST) per return for other taxpayers;

*The reduced rate of late fee would apply if GSTR-3B returns for these tax periods are furnished between 01.06.2021 to 31.08.2021.*

Regards
CA Prateek Arya

Extended Due dates Under Income Tax Act..

GSTIN not Mandatory for MSME Udyam Registration, notifies Central Govt..

*New Notification No. 5/2021 dated 8.3.2021 - Central Tax Issued*:-

From 1st April 2021, E-Invoice will be mandatory for registered person whose aggregate turnover in a financial yearexceeds Rs 50 Crore. Earlier the limit was Rs 100 Crore.

Remember to Mention HSN on invoices from 1/4/2021

Urgent Required :-
2 Article Assistant
for our Hisar Branch - Jagjivan Nagar, Near Nagori Gate.
interested Candidate can mail their CV at [email protected]
Stipend will be given as per the ICAI Norms.

HSN Code Mandatory from 01/04/2021...

This year, We hope you embrace all that life has to offer, conquer your fears and reach new heights. Wish you a wonderful year ahead
A very Happy New Year from team PAC

*Summary*
1. Individual ITRs: 10th Jan, 2021
2. Tax Audit and other Audits: 15th Jan, 2021
3. Income Tax Returns Audit Cases: 15th Feb, 2021
4. VVS Scheme: 31st Jan, 2021
5. GSTR-9/9C 2019-20: 28th Feb, 2021

*Changes w.e.f 1/1/2021*

*Important Changes introduced CGST(Fourteenth Amendment) Rules 2020*

*Time limit for system-based GST Registration increased*

1. The time for system-based registration has been enhanced from 3 days to 7 days. That means, now department shall be required to review and grant registration within 7 days against 3 days as provided earlier from the date of filing of registration application. Where the applicant does not do adhaar authentication or where department feels fit to carry out physical verification the time limit for grant of registration shall be 30 days instead of 7 days.

*More Powers to GST department in cancellation of GSTIN*

2. Now the officer can proceed for cancellation of GSTIN where a taxpayer avails Input Tax Credit (ITC) exceeding than that permissible in Section 16. Clause (e) has been inserted in Rule 21 of CGST Rules 2017.

3. Now where the liability declared in GSTR 3B is less than that declared in GSTR 1 in a particular month, department may now proceed with cancellation of GSTIN. There might be some practical difficulties in implementing such a provision as there are number of corrections which are made in GSTR 3B which may result in lower tax liability as compared with GSTR 1. The clause (f) newly inserted talks about details of outward supply to which we understand that Taxable value and tax both should be in synchronization between GSTR 1 and GSTR 3B.

4. Now, no opportunity of being heard shall be given to a taxpayer for suspension of GSTIN, where the proper officer (PO) has reasons to believe that the registration of person is liable to be cancelled. The words “opportunity of being heard has been omitted from clause (2) of Rule 21A.

5. Where there are significant deviation/anomalies between details of outward supply between GSTR 3B and GSTR1 or inward supplies (ITC) between GSTR 3B and GSTR 2B which indicate contravention of Act, department shall now serve a notice in FORM GST REG 31 to call explanation as to why GSTIN should not be cancelled. Taxpayer shall be required to submit his reply within 30 days of such notice being served to him.

6. Where a GSTIN is suspended no refund u/s 54 of CGST Act 2017 can be availed by the taxpayer. This means that first GSTIN Suspension proceedings have to be closed before applying refund.

*Restriction on claim of ITC as per Rule 36(4)*

7. The claim of ITC in respect of invoices not furnished by the corresponding vendors has now been restricted to 5% of the credit available in GSTR 2B. This limit earlier was 10% of ITC available. This would be mean that a taxpayer’s ITC claim shall now be restricted to 105% of the Credit reflected in his GSTR 2B. Any claim exceeding the specified limit shall result in violation of CGST Act read with rules which may result into suspension of GSTIN as described above. The provision shall come into effect from 1st January 2021.

*GSTR 1 to be blocked in case of non-filing of GSTR 3B*

8. Where a taxpayer fails to file GSTR 3B for two subsequent months, his GSTR 1 shall now be blocked. Earlier non filing of GSTR 3B used to result in blocking of E-way Bill facility but from now on it shall also result in blocking of GSTR 1 of the taxpayer. Similarly, for quarterly return filers, the taxpayer failing to file GSTR 3B for the preceding quarter shall not be permitted to file GSTR 1 of subsequent quarter.

9. A taxpayer whose is restricted to avail ITC as per rule 86B shall also not be permitted to file GSTR 1 where he has not filed GSTR 3b for the preceding tax period.

*Restriction on Utilization of Input Tax Credit – Rule 86B*

10. New Rule 86B shall be affected from 1st January 2021 wherein restriction has been placed on setting off more than 99% of tax liability from Input tax credit where the value of taxable supplies other than exempt supply and zero rated supply exceeds Rs. 50 lakhs in a month. Though few exceptions have been provided to this rule which are as follows:

(i) Where the taxpayer has paid Income Tax exceeding Rs. 1 lakh in two preceding financial year.
(ii) Where taxpayer has received refund exceeding Rs. 1 lakhs u/s 54 of CGST Act 2017.
(iii) Where taxpayer has used electronic cash ledger to pay of liability on outward supplies which cumulatively makes 1% of the total liability up to the said month
(iv) Where a person is a Government Department, Public Sector Undertaking (PSU), local authority or a statutory body.

*Narrowing the validity of Eway bill*

11. Earlier one day was permitted for distance up to 100 kms under e way bill provision. Now the same has been increased to 200 kms. This means that only one day validity shall be granted to cover a distance up to 200 kms which was earlier 100 kms.

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*Due Date Extension Alert for Income Tax and GST*

GSTR 9 & 9C for FY 18-19 due date extended to 31st December, 2020

Income Tax Audit and Report in realest of International Transactions (FORM 3CA/B - 3CD & Form 3CEB) - FY 19-20 - Due Date extended 31st December,2020.

Income Tax Returns where accounts are required to get audited - 31st January,2021

Income Tax Returns where accounts are not required to get audited - 31st December,2020

GSTN has enabled the "*RESEND OTP*" button on the portal to request the same OTP again. Resend request can be made maximum three times

*_Highlights of 42nd GST Council Meeting Recommendations_*

*Measure to Reduce Compliance burden in GST Return Filings*

✅ Quarterly filing of GSTR-1 & GSTR-3B for taxpayers with aggregate turnover of less than Rs. 5 Crores from 1st January, 2021. However, payment of tax would be on monthly basis.

✅ For first 02 months of the quarter, such quarterly Tax Payers would have an option to pay 35% of the net cash tax liability of the last quarter using an auto generated challan.

*Revised HSN / SAC Requirements w.e.f 01st April, 2021*

✅ 6 digit HSN / SAC - For taxpayers with aggregate turnover of more than Rs. 5 Crores,

✅ 4 digit HSN / SAC - For taxpayers with aggregate turnover of upto Rs. 5 Crores, for B2B supplies

✅ 8 digit HSN / SAC - For notified classes of supplies by all taxpayers

*Enhancement in features of return filing*

✅ Timely filing of GSTR-1 statement for auto prepared FORM GSTR-3B on the common portal-

✔️ w.e.f. 1st January, 2021, Due date of furnishing quarterly GSTR-1 to be revised to 13th of the month succeeding the quarter;
✔️ Auto-population of input tax credit from suppliers’ GSTR-1s through the newly developed facility in FORM GSTR-2B for monthly filers w.e.f. 1st January, 2021 and for quarterly filers w.e.f. 1st April, 2021;
✔️ FORM GSTR 1 would be mandatorily required to be filed before FORM GSTR3B w.e.f. 1st April, 2021
✔️ Present GSTR-1/3B return filing system to be extended till 31.03.2021

Allowing quarterly filing of GSTR-3B

The 42nd GST Council Meeting held today has decided to allow the quarterly filing GSTR-3B returns having less than five crores turnover.

This facility will be available from January 1st, 2021. From Jan 2021, the number of returns for small taxpayers will be reduced from 24 to 8.

TCS on selling of overseas tour package
(Section 206C(1G)(b))

A seller of an overseas tour program package who receives any amount from any buyer, being a person who purchases such package, shall be liable to collect TCS at the rate of five per cent.

*In non-PAN/ Aadhaar cases the rate shall be ten per cent.
*There is no monetary limit for this transaction, irrespective of any amount TCS must be collected by seller of that package
*This section will not be applicable in following cases:
If the buyer is liable to deduct TDS under any other provisions and has deducted
If a buyer is CG, SG, an embassy, a high commission, a legation, a commission, a consulate, the trade representation of a foreign state, a local authority or any other person as notified by CG

TCS on foreign remittance through Liberalised Remittance Scheme (LRS) (Sec 206C(1G)(a))

An authorised dealer receiving an amount or an aggregate of amounts of seven lakh rupees or more in a financial year for remittance out of India under the LRS of RBI, shall be liable to collect TCS, if he receives sum in excess of said amount from a buyer being a person remitting such amount out of India, at the rate of five per cent.

*In non-PAN/Aadhaar cases the rate shall be ten per cent.
*This section will not be applicable in following cases:
If the buyer is liable to deduct TDS under any other provisions and has deducted
If a buyer is CG, SG, an embassy, a high commission, a legation, a commission, a consulate, the trade representation of a foreign state, a local authority or any other person as notified by CG

CBDT further extends the due date for furnishing of belated & revised ITRs for Assessment Yr 2019-20 from 30th September, 2020 to 30th November, 2020

✅ *CBDT Alert wef Oct 01, 2020*

- CBDT issues circular no 17 clarifying TDS/TCS provisions which are coming in force from 1st October,2020.

- TCS to be collected and paid on all payment received on or after 1st October, 2020 including amount of GST and also sales made prior to 1st October, 2020.

- The threshold of Rs50 lakhs is year based and hence payment received before 1st October,2020 are to be considered. However applicability shall be on payment received on or after 1st October, 2020.

- Compliance of new provision is applicable for all taxpayers whose sales in previous year has exceeded Rs.10 crores.