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Changes to the GST law will come into effect on January 1

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Changes to the GST law will come into effect on January 1

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The GST regime will see a host of tax rate and procedural changes take effect from January 1, including the requirement for e-commerce operators to pay a tax on services provided through them to the government. means of passenger transport or catering services. In addition, the correction to the reverse tariff structure in the footwear and textile sectors would take effect from Saturday, where all footwear, regardless of their price, will be subject to 12% GST while all textile products, except cotton, including ready-made clothing, will be subject to 12% GST.

While passenger transportation services provided by auto rickshaw drivers in offline / manual mode would continue to be exempt, these services, when provided through an e-commerce platform, would become taxable effective of January 1, 2022, at the rate of 5%. The procedural changes that would go into effect provide that e-commerce operators, such as Swiggy and Zomato, will be required to collect and file GST with the government on catering services provided through them from January 1. They would also be required to issue invoices in respect of these services.

There would be no additional tax burden on the end consumer given that restaurants currently collect and file GST. However, the compliance of instructions and invoice statements is now moved to meal delivery platforms. The move comes after government estimates showed the tax loss to the treasury due to alleged under-reporting by food delivery aggregators is Rs 2,000 over the past two years.

Making these platforms responsible for GST filings would help fight tax evasion. Other anti-evasion measures that would come into effect from the new year include mandatory Aadhaar authentication to apply for GST refund, blocking the ability to file GSTR-1 in cases where the company has failed. no taxes paid and filed GSTR-3B within the previous month.

Currently, the law restricts the filing of declarations for outgoing supplies or GSTR-1 in the event that a company does not produce the GSTR-3B from the previous two months. While companies file the GSTR-1 of a given month before the 11th day of the following month, the GSTR-3B, by which companies pay taxes, is deposited in installments between the 20th and 24th day of the following month. .

In addition, the GST law has been amended to allow GST officers to visit the premises to collect taxes due without notice of justification, in cases where the taxes paid in GSTR-3B are lower depending on the volume of goods. suppressed sales, compared to the procurement details given in GSTR-1. The move would help reduce the threat of false invoicing where sellers would post higher sales in GSTR-1 to allow buyers to claim input tax credit (ITC), but report suppressed sales in GSTR-1. 3B to reduce GST liability.

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Changes to the GST law will come into effect on January 1

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