Quarterly Return Filing and Monthly Payment of Taxes (QRMP) Scheme under GST
Notification No. 81, 82, 84, 85 of 2020 (effective from January 1, 2021)
A registered person who is required to furnish a return in Form GSTR-3B, and who has an aggregate T/o of up to Rs. 5 Crores in the preceding FY is eligible for the QRMP Scheme
J.B.Shah Associates' suggestion:
Consult your tax advisor beforehand and have a plan of action in place to decide whether to opt for the QRMP scheme or go for monthly filing
Reduction in ITC entitlement for invoices not furnished by supplier from 10% to 5%
Rule 36(4) amended (effective from January 1, 2021)
Restriction on claiming ITC in respect of invoices/debit notes not furnished by the suppliers has now been reduced from 10% to 5% of eligible credit available in GSTR-2B.
J.B.Shah Associates' suggestion:
Every assessee should proactively track invoices available in GSTR 2A and create GST Supplier Health Check Reports on a monthly basis. You may reach out to your tax advisor to aid in this complex process.
Restricting use of ITC amount for discharging output tax liability in GST
New Rule 86B introduced (effective from January 1, 2021)
It is applicable where value of taxable supply other than exempt supply and export, in a month exceeds Rs 50 lakhs.
Taxpayer is not allowed to use ITC in excess of 99% of output tax liability.
Certain relevant exceptions provided to above restrictions are:
If the registered person has paid more than INR 1 lakh as income tax under the Income-tax Act, 1961 in each of the last two financial years.
If the registered person has received a refund amount of more than INR 1 lakh in the preceding financial year on account of export under LUT/Bond or inverted tax structure.
If the registered person has discharged his liability towards output tax through the electronic cash ledger for an amount which is in excess of 1% of the total output tax liability, applied cumulatively, up to the said month in the current financial year
J.B.Shah Associates' suggestion:
There is no mechanism for the same in place as yet. We recommend that if your business has a T/o of over Rs. 50 Lakhs in a month, we advise you to check beforehand if you are eligible for the exemption from the said Rule.
Validity of e-way bill narrowed by increasing distance from 100 km. to 200 km. per day
Rule 138 amended (effective from January 1, 2021)
E-way bill will now be valid for 1 day for every 200 km of travel, as against 100 km earlier, in cases other than Over Dimensional Cargo or multimodal shipment in which at least one leg involves transport by ship.
For every 200 km or part thereof thereafter, one additional day will be allowed.
HSN Code Mandatory irrespective of Turnover
Notification 06/2020 (effective from April 1, 2021)
The Notification mandates a registered person to mention the HSN Code for the all products sold the HSN Digits to be mentioned are as under. Exemption is given only to registered persons having turnover less than Rs. 5 Crores, i.e. they need not mention the HSN code in the Tax Invoice for supplies made to unregistered persons.
The GST Law is very dynamic and changes are being taken by the Government to curb tax evasion and also help ease the compliance burden for small tax payers. However due to the complex nature of recent amendments, it's advisable to be a step ahead and consult an expert before making any decisions.
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