Latest GST updates and Notifications - January 2021

2021 GST UPDATES

Claim of input tax credit based on GSTR-2A and 2B. Henceforth, ITC on invoices may be availed only when such invoices have been furnished by the supplier in his Returns.

The due date of GSTR-9 & GSTR-9C for FY 2019-20 has been extended up to 28th February 2021.

Section 50 of the CGST Act is being amended to provide for a retrospective charge of interest on net cash liability, with effect from 1st July 2017.

With respect to orders received on detention and seizure of goods, 25% of penalty needs to be paid for making an application for appeals. Date of applicability is yet to be notified.

GST audit requirement by specific professionals such as CAs and CMAs has been removed from the GST law. As per the amendment, only GSTR-9 annual returns on a self-certification basis need to be filed on the GST portal by taxpayers,

GSTR-9C removed completely, i.e. the reconciliation statement. However, the financial year and date of applicability are yet to be clarified by the government.

The IGST Act was also amended in Section 16, that defines a zero-rated supply. Three amendments were made –

(1) To state that supply to SEZ units /developers will be zero-rated only if it is authorized operations.

(2) Only notified persons or supplies of goods/services can avail the status of zero-rated when IGST is paid.

(3) Foreign exchange remittance will be linked in case of export of goods with the refund.

GST registration can be cancelled or suspended under CGST Rule 21A at the discretion of the tax officer in the following cases:

1. Major discrepancies between the GSTR-3B vis-a-vis the GSTR-1 and GSTR-2B.
2. Utilization of ITC from electronic credit ledger to discharge more than 99% of the tax liability for specified taxpayers - with the total taxable value of supplies exceeding Rs.50 lakh in the month, with some exceptions.
3. A taxpayer has not filed GSTR-1 due to GSTR-3B not being filed for more than two consecutive months (one quarter for those who opt into the QRMP scheme).

Following are the changes in Rule 36(4) from 1st January 2021

1. The ITC shall be available as per the invoices uploaded by respective suppliers either in their GSTR-1 or by using the Invoice Furnishing Facility.
2. The recipients can claim provisional input tax credit in GSTR-3B to the extent of 5% instead of earlier 10% of the total ITC available in GSTR-2B for the month.
3. Certain taxpayers cannot make payment from their electronic credit ledger in excess of 99% of the total tax liability for the tax period.

It applies to such taxpayers who have monthly value of taxable supplies more than Rs.50 lakh (not being exempt or zero-rated supplies). The following taxpayers are exempted from this restriction

1. A registered taxpayer where more than Rs.1 lakh is paid as income tax in the last two FY in belated IT returns of himself or his proprietor or any two partners or managing director, trustee or board, etc.
2. A registered taxpayer who has received more than Rs.1 lakh as refund of unutilized input tax credit under GST, on account of zero-rated supplies without payment of tax or inverted tax structure.
3. A registered taxpayer paid more than 1% of his GST liability using only his electronic cash ledger, for all the tax periods in the current FY so far.
4. Government departments, PSU, local authorities, statutory bodies, etc.

The following are the changes notified for e-way bills:

• From 1st January 2021, the validity of e-way bills for cases other than over dimensional cargo is now calculated based on distance of 200 km and not 100 km.
• The non-furnishing of GSTR-3B for two consecutive tax periods or suspension of GSTIN under CGST Rule 21A will lead to blocking of e-way bills under Rule 138E.

The taxpayers having an aggregate turnover exceeding Rs.100 crore should implement e-invoicing from 1st January 2021.

VARIOUS DUE DATES FOR UPCOMING MONTHS

Payment of Tax by Fixed Sum Method under QRMP Scheme :

W.e.f. 1st January, 2021, following two options are available to the Taxpayers who are under Quarterly Returns and Monthly Payment of Tax (QRMP) Scheme for tax payment for first 02 months of a quarter:

1. Fixed Sum Method: Portal can generate a pre-filled challan in Form GST PMT-06 based on his past record.
2. Self-Assessment Method: The Tax due is to be paid on actual supplies after deducting the Input Tax Credit available.

In fixed sum method, the 35% Challan is calculated as per following situation:

1. 35% of amount paid as tax from Electronic Cash Ledger in their preceding quarter GSTR 3B return, if it was furnished on quarterly basis; or
2. 100% of the amount paid as tax from Electronic Cash Ledger in their GSTR-3B return for the last month of the immediately preceding quarter, if it was furnished on monthly basis.
3. From April, 2021 onwards, the pattern as suggested at Para 2 (a) and (b) would follow.
4. It is noteworthy, that the taxpayers are not required to deposit any amount for the first 02 months of a quarter, if:
5. Balance in Electronic Cash Ledger / Electronic Credit Ledger is sufficient for tax due for the first/ second month of the quarter; or 
6. There is NIL tax liability

INVOICE FURNISHING FACILITY

Invoice Furnishing Facility (IFF) is an optional facility made available as per Rule 59(2) of the CGST Rules, 2017. This is provided for those quarterly taxpayers who want to pass on input tax credit (ITC) to their recipients (buyers/customers), in first two months of a quarter. It may be noted that IFF for a month will expire after the due date of 13th of next month, and cannot be filed after this date.

QRMP Scheme has been implemented to simplify compliance for taxpayers with turnover less than Rs. 5cr. Under this scheme, taxpayers having an aggregate turnover at PAN level up to Rs. 5 crore can opt for quarterly filing of Form GSTR-1 and Form GSTR-3B. Payment can be made in the first two months by a simple challan in FORM GST PMT-06.

Source: www.gst.gov.in

The author can also be reached at corporateconsultant011@gmail.com