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business | IST

Stricter GST regime to prevent tax evasion from Jan 1; check details here

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Starting January 1, 2022, several changes to the existing Goods and Services Tax (GST) regime would kick in. The amendments to GST rules would largely impact businesses and not customers. The new rules are aimed at preventing fraudulent activities concerning billing and recovery.

Starting next year, several changes to the existing Goods and Services Tax (GST) regime would kick in. The new rules -- scheduled to come into effect from January 1, 2022 -- have been announced as part of the Finance Act, 2021, to prevent fraudulent activities concerning billing and recovery.
The amendments -- related to taxable supply, eligibility for input tax credits, and rules for filing appeals -- are aimed at making the indirect tax regime stricter. However, the new GST rules would largely impact businesses and not customers.
Here are the changes that will be introduced to the GST regime from January 1, 2022:
* The new rules would mandate food aggregators like Swiggy and Zomato to collect and deposit GST with the government on restaurant services supplied through them. To curb tax evasion, they would also be required to issue invoices for such services. According to government estimates, the exchequer faced a massive tax loss of Rs 2,000 crore in the past two years due to underreporting by food delivery platforms.
* For companies with an annual turnover of more than Rs 5 crore, there are currently two monthly GST filings -- GSTR-1 and GSTR-3B. While GSTR-1 is a return that shows sales invoices, GSTR-3B is a self-declared summary. In case there is a mismatch between GSTR-1 and GSTR-3B filings of a company, the government has the power to send officials to recover the GST for the amount of sales on which tax has not been paid. From January 1, as per new rules, the government would not be mandated to issue a show-cause notice to the business before sending officials for recovery. The move has been taken to get rid of the fake billing menace. Besides, Aadhaar authentication has also been mandatory for businesses to claim GST refunds.
* Another major change to the GST regime is mandating sellers to disclose details of the invoice in the monthly sales return. Those who do not disclose invoice details in the GSTR-1 form will not be eligible to get credit for the taxes paid from January 1.