Goods and Services is a very complicated tax regime, but some areas of this regime are efficient and straightforward. Like the GST portal that makes it practical and easy for taxpayers to file returns or pay taxes. There is easiness in other areas connected with this law such as keeping records, claiming Input Tax Credit or verifying GSTIN. Taxpayers have the flexibility to issue a plain invoice or create a GST invoice format in excel. Though parts of GST are easy for taxpayers, there are still complicated sections of the law that creates confusion and hampers the efficiency to some extent. To handle this, the GST council has been making continuous changes to the law, and so far 800 changes are made in GST since its implementation. With so many changes happening to the law, it is essential to keep yourself updated with the GST latest news to help yourself stay GST compliant and to not miss out on any new amendments.
There are proposals and announcements declared in the 38th GST council and this year’s budget session about some crucial changes that will happen in the coming financial year. Some new changes will take place from the 1st of April 2020. Below is a comprehensive look at the fresh updates regarding GST.
Latest GST updates
E-way bill updates: GST is getting updated rapidly, and every level of supply of Goods and Services is getting integrated. Earlier there would be GSTR-13B, then it was replaced by an E-way bill in place of delivery challan and linked to the E-way bill. Now the E-way bill system is integrated with the Vahan system of the transport department. The new update issued about E-way Bill shows the integration of the E-way bill with the Vahan system of the Transport Department. The Vehicle number (RC Number) entered in the E-way bill will now be verified with the Vahan database for its existence/correctness. If the vehicle number (RC Number), mentioned in the E-way bill does not exist, then the system will alert the user to verify and correct it. If the taxpayer confirms it to be the correct vehicle number and if it is not in the database, then the taxpayer will need to update the Vahan database with the vehicle number to avoid any problems in the E-way bill in the future. For now, this rule is on a pilot basis in Karnataka, and after its successful implementation in Karnataka, it will be implemented in all other states as well.
Tax rate changes on lotteries: GST council decided to impose a single tax rate of 28% on state-run and state-authorized lotteries. Earlier state-run lotteries would attract 12% GST, and state-authorized lotteries attracted a 28% tax rate. With the recent change, there will be a single tax of 28% of which the central tax would 14% and 14% will be levied by states making it a 28% tax rate on lotteries.
Debit note and ITC: A new change that is proposed on Input Tax Credit is to do with the debit note. The new proposal if implemented, would mean that there will not be any set deadline to claim debit note. Earlier there was a set deadline to claim debit note. With the new proposal, a debit note can be claimed anytime, even if the final date to file return lapses. For Example, If a product was sold in one financial year and the debit note was not claimed by September of that year, then the ITC on that would be lost. But now with the new proposal, it could be claimed without any worry about a deadline.
Provision of Penalty: GST council amended the earlier law of fraudulent Input Tax credit claim. With the new rule, the penalty for fraudulently claiming the input tax credit is dependent on the amount of loss or the Input tax credit evaded. Earlier there would be a penalty of Rs. 10,000, or the Input Tax Credit availed fraudulently, or the amount equal to the tax avoided. In connection with this same amendment, there is another rule proposed. That is if someone gets caught facilitating any fraudulent transaction or its found that any individual or agency involves in any part of fraudulent activity, then there will be penal provision on that firm or individual.
Registration cancellation: A registration can be canceled voluntarily through the submission of an application. Only under the circumstances, where a businessman expected business to flourish, and obtained a registration voluntarily to claim Input Tax Credit. But for some reason there were losses in the industry, then that businessman will not be liable and can withdraw or cancel the registration.
TDS penalty removal: There is a proposal to ease the rule of penalty on the issue of a TDS certificate. The new proposal offers the elimination of any penalty on the late issuance of TDS. There is an indication that there will be new rules that are going to change how an individual could issue a TDS certificate. There is also an indication through this proposal that there could be a provision to remove late fees.
E-invoice update: GST council proposed that business to business invoices will be verified digitally through the GST network which will help enterprises to do away with entering data manually to the system. There is a proposal to issue an identification number for every invoice by the Invoice Registration Portal (IRP), and data of every invoice gets transferred to the e-way bill portal and GST portal in real-time. The implementation of this concept will be in a phased manner.
With the E-invoicing, it will become easier for businesses to handle invoices. GST invoice format in excel and other formats are the simple ways to keep invoices organized but with E-invoicing, it will become efficient as there will be a data transfer of invoice in real-time. Someone unaware of the GST latest news might miss out on the benefits that can be attained by these kinds of changes. The GST Council and the government has been putting in the effort to create a robust system. A system that is easy on the taxpayers and businesses. Changes made to the GST law come after scrutinizing the current law and after taking into account the feedback that comes from individual taxpayers and businesses.