Recently, the senior officials have proposed changes in the GSTN and GST policy with the view of removing hardships faced by various stakeholders regarding the following hurdles:

  • No provision to link multiple invoices with a single credit note
  • Vendors do not have the functionality of availing date of filing of the GST returns by the vendor
  • Tracking of the amendment of any invoices not possible
  • Failure to provide negative values in GSTR 3B

It is good that the senior officials took cognizance of the situation and have recommended solutions to the hardship faced by the taxpayers.

Today, in this blog, we would be understanding the changes that have been proposed to scrap the format of the new return suggested last year and improving the existing GSTR – 1, GSTR – 2, and GSTR – 3B returns.

The key changes proposed to the GSTN infrastructure and return formats are as follows:

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Up to a Limited Rate, ITC Can be Claimed

Previously, three forms were being claimed by the supplier and the recipient, which is mentioned below:

  • GSTR – 1 for outward supply – filed by the supplier
  • GSTR – 2 for inward supply – filed by the recipient
  • GSTR – 3 for Summary return for the payment of tax – filed by the supplier

However, due to the lack of knowledge about the new law, the government has issued only 2 forms i.e. GSTR 1 and GSTR2 but not the third form GSTR -3B for summary return for the recipients, and many people took the unnecessary benefit by claiming the ITC in respect of the supplies which was never made in reality and it has become a headache for the department to identify this type of person.

Even there were times when the supplies were made but the supplier forgot to enter the supplies details in the return and as a result, the recipient could not claim the ITC.

To tackle this, the government has reduced the rate of ITC avail, so from 1st January 2020, the rate determined to be 10%. By issuing the notification vide Notification No. 75/2019 – Central Tax dated December 26, 2019.

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Commissioner Blocking the ITC Under New Rule 86A

In layman terms, it can be explained that a trader obtained the GSTIN number of his driver by submitting the false documents and taken his invoices from him & took the credit on his behalf, so if the commissioner has observed the driver then he will gain knowledge about the fake transaction so the vide notification no. 75/2019 – Central Tax dated December 26, 2019, has been inserted as per new Rule 86A of the CGST Rules:

  • The majority of the people still charge the GST but they do not pay it back to the government, this notification will be able to find these people & levy the penalty
  • Others who have claimed the ITC as per the tax invoices received from the supplier’s w.r.t tax charged by him has not been paid by the government

Rather, the commissioner catching the trader and penalize him, it would be better, that he should not let the situation arise by debiting the amount in the electronic credit register.

If GSTR – 1 Not Filed, Generation of E – Waybill is Being Blocked

As per Notification No. 75/2019 – Central Tax dated December 26, 2019, Rule 138E of the CGST Rules, from 11th January 2020, in case, any taxpayer did not file his GSTR-1 for a consecutive period of 2 months or 3 months then he will not be able to generate the E-way Bill until the return with interest is filed, so it is important for the taxpayer to timely file its GSTR -1 and GSTR – 3B to avoid the penalty.

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E-Invoicing is Mandatory Under GST

As per Notification No. 70/2019 – Central Tax dated December 13, 2019, w.e.f. April 01, 2020, registered people shall compulsorily generate e-invoices in the case of B2B supplies and report to the notified common portals of GST.

Those registered people whose aggregate turnover (including exempt supplies) exceeds Rs. 100 crores in a financial year, on PAN India basis, shall compulsorily generate e-invoices in the case of B2B supplies and report to the GST notified common portals.

Creation of Quick Response (QR) Codes for B2C Supplies

As per Notification No. 71/2019 – Central Tax and Notification No. 72/2019 – Central tax, both dated December 13, 2019, w.e.f. April 01, 2020, It becomes mandatory for the registered person, having an aggregate turnover exceeding Rs. 500 crore to create a Quick Response Code (QR code) for the supplies from Business to consumers.

Supersede Old Returns with New Returns from April 2020

Transition to the new returns will help in increasing statutory compliance and reduce tax evasion to a considerable level. The GST council has decided that a new GST return system will be in operation for taxpayers from 1st April 2020.

Quoting of DIN Mandatory on All Kinds of Department’s Communications

As per the CBIC vide Circular No. 122/41/2019, the government has ordered the mandatory quoting of the Document Identification Number (DIN) on all kinds of communications to the taxpayers and the other person concerned from any office of the CBIC. It is being done with the view of increasing accountability and transparency in indirect taxation.

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SOP for Non-Filers of GST Return

CBIC has issued the guidelines on the Systematic Operating Procedure to be followed by the tax officers against the Non –Filers of the GST Returns

Previously there was no consistency on the different actions that were being carried out against non –filing of the GST returns, hence the CBIC have decided to ensure the consistency and resolve the divergence in the application of the legal provisions through an SOP

The SOP refers to the guidelines to be followed by the tax officers during the issuance of non-filing of returns by CBIC, under section 168(1) of the CGST Act.

Reverse Charge Mechanism (RCM) on Renting of Motor Vehicles

Reverse Charge Mechanism (RCM has been introduced by the Government of India through a CBIC circulat no. 130/49/2019 on 31st December 2019 for the vehicle rental business.

The purpose of issuing the circular was that the ventures operating in the vehicle rental business could not obtain registration under the GST, so they could not make GST payments and file returns, so the circular makes the RCM mandatory for the assesses in the vehicle rental business with the view of providing relief to them so they are exempted from the requirement to pay GST.

Extension of Due Date for Filing of TRAN-1 & TRAN-2

The last dates for filing of Form TRAN-1 and Form TRAN-2 have been increased to March 31, 2020, and April 30, 2020, respectively.

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Waiver of Late Fees for Non-filing of GSTR-1

Recently the government has given a major benefit to all the taxpayers which state that if any person who has not filed any return from July 2017 but he was liable for filing the same then he has the last chance to file such returns within 17th January ( date extended from 10th January) 2020 without any interest

The wavier has been given for interest, but the late fees still shall be chargeable. If the fees paid late are for a genuine reason then the taxpayer may file an application to the proper officer under section 128 of the CGST Act, 2017. If the proper officer found the reason to be genuine for not filing the return, then he may also waive off the amount of the late fee.

Extension of Filing of GST Audit and Annual Return for F.Y 17-18 & F.Y 18-19

The due date for filing GST Annual Return (GSTR – 9) and Audit Report, Reconciliation Statement (GSTR – 9C) for the F. Y. 2017-18 has again been extended to January 31, 2020.

Also, the due date for filing GSTR – 9 and GSTR – 9C for the F.Y 2018-19 has been extended to March 31, 2020.

Through the reforms of GST form, the government is slowly moving towards the complete automation of the tax system and through these measures, it is not only providing relief to the taxpayers but generating transparency for its various stakeholders.

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