The CGST Act has undergone several amendments, favoring the taxpayer with better compliance. Updates have been made for the sections related to payment of taxes and interest, so it is easier to file GST returns and reduce the interest burden. Let us analyze some of the major amendments made and how GST-registered taxpayers would benefit from them.
The limit of registration under GST for suppliers of goods has been increased from 20 lakh to 40 lakh rupees. This change was already proposed by the GST Council at its 32nd meeting, and has now been passed by Parliament and amended the CGST Act under Section 22. This new amendment will greatly benefit all small and medium-level suppliers who can use the benefits to a higher exemption limit and avoid collecting taxes and filing their returns. This amended limit does not affect other classes that require mandatory registration in case of sale through inter-state suppliers or e-commerce operators. In addition, it is available only to the supplier of goods.
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On the subject of registration under GST, a new sub-clause has been introduced under Section 25 relating to the process of registration. The government has now made Aadhaar authentication mandatory for all taxpayers under GST, even those who are getting registered for the first time. Without Aadhaar authentication, the registration allotted to a person will be considered invalid. For the registration allotted to persons other than individuals, Aadhaar authentication of its authorized representative or authorized signatory should be done in such cases. This new procedural compliance focuses on making Aadhaar a common proof of identity used by government in all legal departments.
The best news yet for taxpayers is that they will now be able to transfer wrongly paid taxes to the right head under the latest amendment of Section 49 of the CGST Act. The inability to transfer incorrectly paid taxes in the past had caused a lot of annoyance and complaints among taxpayers, as these taxes, once paid, could not be used and paid back again. Will need to do. With this new update, any amount in the electronic cash ledger, under taxes, interest, penalties or charges, can now be transferred to the right head under applicable IGST, CGST or SGST / UTGST.
In another important step, the interest burden on delay in payment of taxes will now be significantly reduced. The interest provisions have been amended under section 50, which include the levy of interest on the electronic cash ledger, or in other words, only the extent of tax paid using cash. Earlier, taxpayers had to pay interest on the entire portion of the tax which remained unpaid beyond the due date. It also included the portion paid using the input tax credit, which was against the practices set by many experts. This amendment would reduce the burden of interest liability for taxpayers, and would be a zero liability only in cases of payments made using the input tax credit.
Under Section 10, which operates the composition scheme, a new sub-section has been introduced, which will also bring service providers under the purview of the scheme. The composition scheme can now be availed by combining both the service providers as well as the mixed supplier ie goods and services with an annual turnover of up to Rs 50 lakh. This new update forms the main route for small businesses, as it will make compliance in terms of maintenance of books of accounts and filing of returns much easier.
As far as filing of returns is concerned, section 39 of the CGST Act has been amended to introduce a new option for the specified taxpayers to submit their returns on a quarterly basis instead of monthly. However, individuals selected to file quarterly returns will still have to pay their taxes monthly. Similarly, for composition taxpayers, they only have to file their returns annually, while paying taxes on a quarterly basis. This will significantly reduce the filing burden on small taxpayers, as well as reduce the costs involved in GST-compliance.
The CGST Act, as well as some of the latest amendments introduced in the Income Tax Act, show that the government is now moving towards a cashless economy. A new clause introduced in the CGST Act 31A mandates certain specific suppliers to give their payers the option of prescribed methods of electronic payment. One of the main reasons for the introduction of compulsory electronic payments is to curb the use of cash and prevent tax evasion, which is a problem in our country.