Understanding the Latest GST Changes – 2024

The Central Board of Indirect Taxes and Customs have made some amendments to the existing Goods and Services Tax, which has been effective from Jan 1, 2020.

The GST Act was implemented in July 2017 which replaced the existing taxes by State and Central governments.

Some of the major changes in this amendment are as follows:

1. ITC claims restriction to a particular rate

GST is a value-added tax on goods and services. ITC which stands for Input Tax Credit offers a deduction in the tax on output by subtracting the taxes on inputs paid earlier. What happened earlier was that many frauds have claimed credit for supplies that in reality had never been made. Also, another case of discrepancy is when a supplier forgets to include the details of supplies in the return. In that case, the recipient will not be able to claim the credit. To address this, the government has introduced a rate, of 10% of total ITC eligible, when the supplier has not mentioned details.

2. Blocking ITC according to rule 86 A

The Commissioner can block ITC if he believes that the recipient has done some fraudulent activities like:

• Taking supplies from a person who does not exist/ a person who does not have any business in the registered place.
• For people who include GST tax in their dealings but do not pay the tax to the government, penalties and interest would be levied.
• ITC has been claimed but not paid to the government.

When there is any unutilized value available in the tax registers or tax, liabilities are to be discharged, generally, the commissioner makes use of an electronic credit register.  So now, when the commissioner believes any fraudulent activities as detailed above have happened, he can prohibit the ITC in question by making a debit in the electronic credit register.

3. E-Wall bill generation

In the event of GSTR 1 not being filed for a quarter or 2 months on a case-to-case basis, the provision to generate an E-Wall bill will be disabled for the recipient unless he pays the complete amount including interest which he owes the government. This has been in effect from 11^th January of this year.

4. E-invoice generation

In all instances of net turnover exceeding 100 crores in a financial year for a registered member, the recipient should mandatorily generate e-invoices. This needs to be done in the case of B2B supplies and is applicable all over India. This is with effect from April 2020.

5. QR code generation

In all instances of net turnover exceeding 500 crores in a financial year for a registered member, the recipient should mandatorily generate a QR code to a B2C invoice. This is also in effect from April 2020.

6. Simplified GST return filing

Taking, the feedback from recipients who have commented on the complexity of GST returns filing into account, a new simplified system has been introduced. This is anticipated to reduce evasions to a great extent and also increase statutory compliance. A plan for easier transition between the old and new systems was released and approved by the Council and released in June 2019.

7. Mandatory DIN

DIN stands for Document Identification Number. The Central Board of Indirect Taxes and Customs has used information technology and automation to implement a system for the electronic generation of DIN. Whenever any communication needs to be sent by any office to the taxpayer, DIN has been made mandatory, from Dec 2019. Non-conformant communications will be considered invalid.

8. GST Return Non-filers Guidelines

The amendment can be explained below:

• Three days prior to the due date, an automated SMS will be sent to the registered members reminding them about the amount due.
• On defaulting, another automated SMS will be sent.
• Notice will be issued 5 days post the due date providing a grace period of 15 days.
• If the defaults again, the concerned officer should file a summary of liabilities.
• If paid within 30 days, the report will be withdrawn. However if not paid for 6 months, due recovery methods will be employed by the department officers.
• On a case-to-case basis, the officer can even cancel the registration.

9. Registration of motor vehicles- RCN

The reverse charge mechanism is applicable in the following cases:

• Motor vehicle rented to carry passengers
• The recipient is a body of corporate
• Supplier is not a body corporate
• Supplier-issued invoice doesn’t charge GST 12%

If the supplier is charging 12%, then he is liable to pay tax

10. TRAN 1 and TRAN 2

The due date for filing TRAN 1 has been extended to March 31, 2020, while for TRAN 2, it is extended to April 30, 2020.

11. Non-filing GSTR 1

People who were supposed to file returns from July 2017 but did not do so are given one more chance to do the same.

They can avail of the benefit and file the pending returns before Jan 17, 2020, without any penalty. However, late fees are still applicable under the provision that if an appropriate reason is given, the officer can waive the same.

12. GSTR 9, Audit and Reconciliation statement

The due date for filing the Audit report and GSTR 9 (GST Annual return) has been postponed to January 31, 2020. The exact date applies to filing a reconciliation report. This is for the financial year 2017-18 whereas the same for the financial year 2018-19 is March 31, 2020.

Frequently Asked Questions