In her first budget, Nirmala Sitharaman said the government will consider to further simplify the GST process.
Changes in Indirect Taxation:
1. Government Recommends Reduction of GST on Electric Vehicles:
The government has suggested reducing the GST rate on EVs from the current 12% to 5%, in a bid to make the vehicles affordable. In addition, consumers will be provided with an additional income tax deduction of ? 1.5 lakh on the interest paid on the loans taken to purchase electric vehicles. The move is expected to expedite the growth EVs in the Indian auto sector.
2. Electronic invoice system :
It is also proposed to move to an electronic invoice system wherein invoice details will be captured in a central system at the time of issuance. This will eventually be used to prefill the taxpayer’s returns. There will be no need for a separate e-way bill. Its roll out would begin from January, 2020.
3. Interest on late payment of tax, whether on Gross Tax Liability or Net Tax Liability :
Earlier there was confusion among taxpayers on this issue, which is resorted to be paid on net tax liability. However, there is one exception to this rule, where returns are filed subsequent to initiation of any proceedings under GST Act, the interest shall be levied on the gross tax liability.
4. Furnishing proof of Aadhaar :
Every registered person shall authenticate, or furnish proof of possession of Aadhaar number. In case no Aadhaar number is assigned to the registered person, such person shall be offered an alternate and viable means of identification. Failure to do both shall make the registration of such person invalid.
5. Introduction of Form PMT-09 :
Now a registered person can transfer any amount of tax, interest, penalty, fee or any other amount available in the electronic cash ledger to the electronic cash ledger for IGST, CGST, SGST, UTGST or Cess through a new form PMT-09 subject to the conditions and restrictions prescribed under GST Act. Such transfer shall be deemed to be a refund from the electronic cash ledger.
6. Reforms in Excise and Custom Duty :
Special Additional Excise duty and Road and Infrastructure Cess each by one rupee a liter on petrol and diesel. It is also proposed to increase custom duty on gold and other precious metals from 10% to 12.5%.
7. Sabka Vishwas Legacy Dispute Resolution Scheme, 2019:
A dispute resolution cum amnesty scheme, “Sabka Vishwas Legacy Dispute Resolution Scheme, 2019”, has been introduced for resolution and settlement of legacy cases of central excise, service tax, and certain other central levies/duties/taxes/cesses.
Following persons cannot make voluntary disclosure –
a) Where they have been subject to enquiry/ investigation/ audit
b) Where they have filed the return and indicated the tax payable but have not paid it
The proposed scheme provides relief in the following ways:
• Relief from 40−70 percent of tax dues, and waiver of interest and penalty for cases other than voluntary disclosure ones.
• Waiver of interest and penalty on payment of full tax dues disclosed for voluntary disclosure cases.
• No prosecution for the person discharged under the scheme.
8. ‘National Appellate Authority for Advance Ruling (NAAAR):
National Appellate Authority for Advance Ruling will be constituted for hearing appeals against conflicting advance rulings pronounced on the same question by the Appellate Authorities of two or more states in respect of matters pertaining to distinct persons. Such advance ruling shall be binding on the applicants, all registered persons with the same PAN, the concerned officers or the jurisdictional officers of applicants, and other registered persons with the same PAN
9. Other major reforms:
a) National Anti-profiteering Authority has been empowered to impose penalty equivalent to 10% of the profiteered amount.
b) Fully automated GST refund module shall be implemented.
c) 2% Interest subvention scheme for GST compliant MSMEs: Rs. 350 crore allocated for 2019-20.
d) Taxpayers having annual turnover of less than ?5 crore can now file quarterly returns.
e) Simplified return forms to be implemented soon. Composition registered dealers are required to pay tax quarterly and file return on annual basis.
f) The Central Government has been authorized to pay the amount of refund towards State taxes to the taxpayers.
g) The value of exempt supply of services provided by way of extending deposits, loans or advances (where consideration is received in form of interest or discount) shall not be considered for determining turnover under Composition Scheme.
h) A new section 31A is being inserted in the CGST Act to provide to the specified suppliers of goods and services to mandatorily give the option of specified modes of electronic payment in the invoice to their recipients.
i) Commissioner has been empowered to extend the due date for furnishing of following forms which was previously extended by special order (Removal of Difficulty order) issued by Government i. Annual return (FORM GSTR-9/9A)
ii. Reconciliation statement (FORM GSTR-9C).
iii. Monthly (GSTR 8) and annual statement (GSTR 9B to be notified) to be furnished by person collecting tax at source.
Disclaimer:
This material and the information contained herein prepared by P R A S S & Associates LLP is intended to provide general information and is not exhaustive. We are not providing any professional advice or service by means of the above information. The information is not intended to be relied upon as the sole basis for any decision which may affect you or your business. Before making any decision or taking any action that might affect your personal finances or business, you should consult with us or any other qualified professional adviser.