On January 1st, a raft of changes to the GST law will take effect

From January 1, a slew of tax rate and procedure changes will take effect, including the requirement for e-commerce operators to pay tax on services delivered through them in the form of passenger transportation or restaurant services.

Also, starting Saturday, the rectification in the inverted duty structure in the footwear and textile sectors will take effect, with all footwear, regardless of price, attracting a 12 percent GST, and all textile products, excluding cotton, including premade clothes, attracting a 12 percent GST.

While passenger transportation services provided by auto-rickshaw drivers in an offline/manual mode will remain exempt, services delivered through any e-commerce platform will become taxed on January 1, 2022, at a rate of 5%. From January 1, e-commerce operators like as Swiggy and Zomato will be required to collect and deposit GST on restaurant services provided through them with the government. In addition, they would be forced to produce bills for such services.

Because restaurants are already collecting and paying GST, there would be no additional tax burden on the end consumer. Only now, deposit and invoice raising compliance has been delegated to food delivery platforms.

Currently, the legislation prohibits businesses from filing GSTR-1 reports for outbound supplies if they have not filed GSTR-3B for the previous two months. Businesses must file GSTR-1 by the 11th day of the following month, whereas GSTR-3B, which is used to pay taxes, must be filed between the 20th and the 24th day of the following month.

In addition, the GST law has been revised to allow GST officers to visit premises without a prior show-cause notice to recover tax dues in circumstances where taxes paid in GSTR-3B are lower due to suppressed sales volume than supply information provided in GSTR-1. The change will help to reduce the threat of bogus invoicing, in which sellers report larger sales in GSTR-1 to allow customers to claim Input Tax Credit (ITC), but lowered sales in GSTR-3B to reduce GST liabilities.

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