Highlights of GST in Union Budget 2019-20

Arjuna (Fictional Character): Krishna, Union Finance Minister has presented Union Budget for the year 2019-20, so what are the major changes made in GST in Union Budget?

Krishna (Fictional Character): Arjuna, Union Finance Minister Nirmala Sitaraman has presented Union Budget for the year 2019-20. This budget is the modest budget with more of sense than sensation. Let’s study the major proposals of GST and Amnesty Schemes under old indirect taxes.

Arjuna : Krishna, what are the changes for calculation of interest made in Budget?

Krishna : Arjuna, new proviso in sub-sections (1) is being inserted in section 50 of the CGST Act so as to provide for charging interest only on the net cash tax liability, except in those cases where returns are filed subsequent to initiation of any proceedings under section 73 or 74 of the CGST Act. 

For Ex- If taxpayer has output liability of Rs. 1,00,000/- and ITC of Rs. 50,000/-. The return is filed after due date in such cases, the taxpayer would be liable to calculate interest on net liability of Rs. 50,000/- and not on Rs. 1,00,000/-. Hope it comes from retrospective effect to reduce litigations.

Arjuna : Krishna, how can taxpayer correct the tax payment made under incorrect head?

Krishna : Arjuna, Now taxpayers can correct errors in payment of taxes. New sub-sections are being inserted in section 49 of the CGST Act to provide a facility to the registered person to transfer an amount from one (major or minor) head to another (major or minor) head in the electronic cash ledger i.e. of tax, interest, penalty, late fees wrongly paid in CGST may be adjusted in IGST, SGST, etc and vice versa as the case may be.

For Ex- If taxpayer has wrongly paid liability of Rs. 1,00,000/- under CGST which ought to be paid under SGST. Now the taxpayer can transfer such amount from CGST to SGST of Rs. 1,00,000/- corresponding changes in rules were also proposed earlier under PMT-09 .

Arjuna : Krishna, what is the new Amnesty Scheme under Service Tax, Excise, etc.?

Krishna : Arjuna, A very unique and substantial relief scheme named as “ SABKA VISHWAS LEGACY DISPUTE RESOLUTION SCHEME” has been proposed. The focus of the government will be to reduce the pending litigations of 26 pre-GST laws, the government has proposed a Dispute Settlement Scheme for speedy settlement of pending litigations and to remove the funds blocked in the litigations. Upto 70% relief in payment of disputed tax dues and 100% relief of late fees, interest and penalty subject to fulfillment of specified conditions. This is one of the most beneficial scheme ever made in the history of Indirect tax by Central Government.

Arjuna : Krishna, What should one learn from this?

Krishna : Arjuna, First time a lady FM has presented the Union Budget. Few rate changes are proposed majorly the GST tax rate for electric vehicle has been proposed to reduced from 12% to 5%. Taxpayer should take maximum benefit of the Amnesty Scheme and get rid of old litigations. Thus, we can move over to litigation-free era in Indian taxation.