Recent Changes in GST- Update on GST Amendment Acts

Income Tax Department will share data with GSTN

The income tax department will now share the data with GSTN. This will enable GSTN to look for the taxpayers who file separate figures in income tax returns and GST returns and thus leads to tax evasion.

Taxpayers are now advised to give special attention while filing Income tax returns. Their turnover should match for both GST and Income Tax. A major difference between the both may lead to scrutiny.

Before, a number of taxpayers take benefit of not sharing data between direct tax and indirect tax departments.

An order has been issued on 30th April 2019 regarding sharing of data with GSTN. The data which are to be shared are

  • Status of filing of ITR
  • Turnover
  • Gross total income
  • Turnover ratio
  • GTI range
  • Turnover range
  • Any other data as decided

The data which will be shared on spontaneous and automatic basis.

As per the order, for the exchange of information to take place, a Memorandum of Understanding (MoU) will be signed between Principal Director General of Income-tax (Systems) or Director General of Income-tax (Systems) and nodal officer, GSTN.

Government plans to launch E-Invoices to curb tax evasion

Government is planning to launch a system in which businesses registered in GST is required to create their invoices on GST portal or a separate portal for this purpose. This is termed as e-invoice. The main purpose is to curb tax evasion carried out by issue of fake invoices.

You May Read: How GST Works in India

The provisions may be applicable on persons with a turnover of more than threshold limit or on the basis of invoice value or a combination of both. It is first proposed to be applicable for B2B transactions only. And then afterwards depend on its success it may be applicable on B2C transactions also.

It is likely to be applicable from the next three-four months. No more information regarding this has been provided by the GST officials.

It is an additional burden for taxpayers as they will depend on computer and internet availability. And also it will be an additional work to do.

Also, there may be certain benefits of e-invoicing. Government may link the e-invoicing to e-way bill portal. So invoices for which e-way bill is also required will not be required to generate such e-way bill separately. Also, it can be connected to the GST Return portal. So all invoices can be automatically used for the GST return and only remaining invoices to be entered. Learn more about GST invoicing  in this article.

“We will have to study global models followed by countries like Latin America, South Korea and Europe. We will also look at ways to incentive businesses to adopt the method of e-invoice generation,” the official said.

Change in Section 9(4) of reverse charge on purchase from unregistered person

Previously, Section 9(4) of CGST states that reverse charge is applicable on purchase of goods or service by a registered person from an unregistered person. The notification issued just before 1st July 2017 exempted the purchases below Rs. 5000 per day from this section and afterwards this section was postponed completely.

Now this section has been amended to applicable only on specified class of registered persons in respect of purchase of specified class of goods or services from unregistered person. The specified registered persons and specified goods and services are to be notified by way of a notification. No such notification has been issued till date.

RCM was one of the most hated and opposed concepts in GST. Now it will provide a great relief to the businessmen. Moreover, it will depend on the persons and goods/services notified.

You May Read: Penalty for Late Filing of GST Returns

Change in Section 10 of Composition Scheme

Section 10 has been amended to give the government power to increase the composition limit up to Rs. 1.5 crore. This limit was Rs. 1 crore before this amendment. Also, GST council has already decided to increase this limit to Rs. 1.5 crore from next financial year.

Also, a person registered under composition scheme can provide service (other than restaurant service) of value not exceeding Rs. 5 lakh or 10% of turnover in preceding financial year, whichever is higher.

For example, A person doing business of building hardware is registered in composition scheme. He also provides service of fitting/repair of such hardware occasionally on request by customers. Now he can provide such services up to the aforesaid limit and pay issue bill of supply for such services.

Amendment of Section 17

Previously Section 17 (5)(a) disallows input tax credit for all motor vehicles (except for few purposes). Now it is amended to disallow ITC only for those motor vehicles which has approved seating capacity of up to 13 persons (including the driver). If a motor vehicle is to be used for further supply of such motor vehicle, transportation of passengers or imparting training on driving such motor vehicle, then ITC is allowed for such motor vehicle as previously allowed.

Amendment of Section 22

Section 22 is amended to give Government the power to increase the limit of Rs. 10 lakh up to Rs. 20 lakh for registration in special category states on the request of such state and recommendation of the council.

Amendment of Section 24

Section 24(x) is amended to make GST registration compulsory only for those e-commerce operator who is required to collect tax at source under section 52.

You May Read: Docs Required For GST Registration

This amendment will give relief to those small e-commerce operators on which small service providers are listed and therefore not liable to registration and collect GST. For example, there is a small website on which many accountants are registered. They provide services to small businesses and their turnover is not more than Rs. 20 lakh. They are not required to register and collect GST. The website owner (e-commerce operator) is also not required to collect GST on such transaction. Therefore such e-commerce operator is now not required to get registration under this clause. (He may be required to register under another clause)

Amendment of Section 25

Provision is inserted in sub section 25(1): Provided further that a person having a unit, as defined in the Special Economic Zones Act, 2005, in a Special Economic Zone or being a Special Economic Zone developer shall have to apply for a separate registration, as distinct from his place of business located outside the Special Economic Zone in the same State or Union territory.

Section 25(2) has been amended to allow a person who has multiple places of business to take separate registration for each such place. This is an option to the person and he may take a single registration for all such places.

Before this amendment, a separate registration in a state/union territory is allowed only if the business vertical is different.

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