26 November 2023
My client received SCN for 1% cash payment for discharge of output tax liability. But they paid income tax around 7 lacs for the past three years and also claiming Refunds both Exports and Inverted duty structure. As per the rule 86B, the cash payment 1% applicable or not applicable.
27 November 2023
Based on the recommendations of the GST Law Committee, the government has notified new indirect tax rules that makes cash payment of 1 per cent of GST tax liability mandatory for businesses whose taxable supply value exceeds Rs 50 lakh.
Any person mentioned in the list below, who has paid an annual income tax greater than INR one lakhs rupees under the IT Act of 1961 is exempted from this rule – A registered person Karta of HUF Managing director of the business of the registered person Whole-time directors or any partners (in the case of the firm) Proprietor If a registered person has received a refund of INR one lakh or more in the last financial year, this refund of unused ITC received towards export under the letter of undertaking or because of an inverted tax structure, will not be accounted for under Rule 86B. When a registered person in question has paid his OTL using the electronic cash ledger of an amount that is more than 1 percent collectively of the entire OTL on the person in the given month in a given financial year. The person is exempted from any tax if they hold any of the following offices – Local authority PSU Statutory authority Government department