11 Major GST Changes Proposed In Union Budget 2021
Union Finance Minister Nirmala Sitharaman, in the Union Budget 2021 announced that government will take every possible measure to smoothen GST structure further to improve the ease of doing business index. So, in this union budget 2021 our Union Finance Minister has proposed several major GST Changes and in this blog, we will try to cover all those 11 major GST changes proposed in budget 2021:
1. Matching Of Input Tax Credit
The government has decided to insert a new clause to section 16(2) (aa) of the CGST Act regarding the availability of the input tax credit on invoice or debit note. According to this new clause, the taxpayer can avail ITC only when invoice or debit note details are furnished by the supplier and communicated to the recipient of such invoice or debit note.
2. Annual Return & Reconciliation Statement
The government in union budget 2021 has proposed to omit Section 35(5) of the CGST Act that will remove the need of getting annual accounts audited and furnishing GSTR-9C by specified professionals.
Moreover, the government has proposed an amendment in Section 44 of the CGST Act, so that the taxpayer can file GSTR-9C on a self-declaration basis.
It shall be noted that the Commissioner can also exempt a class of taxpayers from filing the annual GST return.
3. Seizure And Confiscation of Goods & Conveyances In Transit
The government has proposed an amendment in Section 74 of the CGST Act to create a separate proceeding from the recovery of tax in the case of seizure and confiscation of goods and conveyances in transit.
Moreover, the Government has decided to amend Section 129 and Section 130 of the CGST Act to delink the proceedings of detention, seizure, and release of goods and conveyance in transit from the proceeding of confiscation of goods and conveyance.
Further, the amount of penalty under section 129 has also been doubled, now the taxpayer has to pay 200% tax on the detained and seized goods and conveyance.
4. Self-Assessed Tax And Recovery
The government in this union budget 2021 has proposed to insert an explanation to the Section 75(12) of the CGST Act to clarify that the self-assessed tax will now include the tax liability declared in GSTR-1 (not including GSTR-3B).
5. Interest
The government in this union budget 2021 has proposed to amend Section 50 of the CGST Act and according to this new amendment, the amount of interest will not be determined based on the tax paid using ITC with effect from 1st July 2017.
6. Provisional Attachment
The government has proposed an amendment in Section 83 of the CGST to increase the scope of provisional attachment of assets for the entire period starting from the proceedings in the case of Chapter XII (Advance Ruling), Chapter XIV (Inspection, search, seizure, and arrest) or Chapter XV (Demands & recovery).
7. Clubs Or Associations
The government has decided to insert a new Section 7(1) (aa) in the CGST Act, to levy a tax on the supply of goods or/and services by clubs or association to its members/constituents or vice-versa, for cash, CDN, or any other valuable consideration.
8. Pre-Deposit For Appeal Filing
The government in this union budget 2021 has proposed to insert a proviso to Section 107(6) of the CGST Act to provide that no appeal before AAAR can be filed against an order passed by AAR in case of seizure and confiscation of goods and conveyance in transit unless the taxpayer pays an amount equal to 25% of the penalty.
9. Power To Collect Information
The government in this union budget 2021 has proposed to amend Section 151, Section 152, and Section 168 of the CGST Act to grant a wider spectrum of power to the jurisdictional commissioner to seek information on any matter concerned with the CGST Act.
10. SEZ Supplies
The government in this union budget 2021 has proposed to amend Section 16 of the IGST Act that the zero rates will apply on the supply of goods or/and services to an SEZ developer or an SEZ unit only when such supply is for authorized operations.
11. Refunds On Account Of Zero-Rated Supplies
The government in this union budget 2021 has proposed to amend Section 16 of the IGST Act to restrict the zero-rated supply on the payment of IGST only To a notified taxpayers or notified goods or/and services. And to recover the refund in case of export of goods when foreign exchange remittance is not received.
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