Budget 2020 was presented by Union Finance Minister of India, Smt. Nirmala Sitharaman on February 1, 2020. In her 2nd budget presentation, the FM assured taxpayers that new GST returns shall be implemented from April 1, 2020, and shall help simplify return filings and tax leakages under GST.
She further added the new returns shall improve input credit flow, allow SMS based filing for Nil Returns and return pre-filling among other simplifications.
The FM also introduced the new penal provisions for fake invoicing and fraudulent ITC claim, labelling such actions as non-bailable offence. The same has already been approved by the GST council.
For a detailed outcome, here are the highlights on GST budget 2020
GST Budget 2020 – Highlights
Amendments in the Central Goods and Services Tax Act,2017 / Integrated Goods & Services Tax Act, 2017 /Union Territory Goods & Services Tax Act,2017. Amendments carried out through the Finance Bill, 2020 will come into effect on the date of its enactment (unless otherwise specified) .
1. Input Tax Credit:-
Sub section (4) of section 16 of the CGST Act is being amended to delink the date of issuance of debit note from the date of issuance of the underlying invoice for purpose of availing input tax credit.
2. Cancellation of Registration:-
Clause (c) of Sub Section (1) of Section 29 of the CGST Act is being amended to provide for cancellation of registration which has been obtained voluntarily under sub-section (3) of section 25.
3. Revocation of Cancellation of Registration:-
A proviso to sub section 1 of section 30 of the CGST Act is being inserted to empower the jurisdictional tax authorities to extend the date for application of revocation of cancellation of registration in deserving cases.
4. Tax Deduction at Source:–
Section 51 of CGST Act is being amended to remove the requirement of issuance of TDS certificate by the deductor; and to omit the corresponding provision of late fees for delay in issuance of TDS Certificate.
5. Power to issue Directions:-
Section 168 of the CGST Act is being amended to make provisions for enabling the jurisdictional commissioner to exercise power under sub section (5) of section 66 and second proviso to sub section (1) of section 143.
6. Composition levy:-
Section 10 of CGST Act is being amended, so as to exclude from the ambit of the composition scheme certain categories of Taxable persons, engaged in making
i. Supply of services not leviable to tax under the CGST Act, or
ii. Inter-state outward supply of services, or
iii. Outward supply of services through an e-commerce operator.
7. Penalty for certain offences:-
Section 122 of CGST Act is being amended by inserting a new sub-section to make the beneficiary of the transactions of passing on or availing fraudulent input tax credit liable for penalty similar to the penalty leviable on the person who commits such specified offences.
8. Punishment for certain offences:-
Section 132 of the CGST Act is being amended to make the offence of fraudulent availment of input tax credit without an invoice or bill a cognizable and nonbailable offence; and to make any person who commits, or causes the commission and retains the benefit of transaction arising out of specified offences liable for punishment.
9. Definition of Union Territory:-
The definition of “Union Territory” in clause (114) of section 2 of CGST Act is being amended to update the definition of Union Territory in view of the bringing into force of the Jammu and Kashmir Reorganization Act,2019 and the Dadra and Nagar Haveli and Dman and Diu (Merger of Union Territories), Act,2019. Consequential changes are also being made in UTGST Act,2017.
10. Tax Invoice:-
Section 31 of CGST Act is being amended to provide enabling provision to prescribe the manner of issuance of invoice in case of supply of taxable services.
11. Constitution of Appellate Tribunal:-
Section 109 of CGST Act is being amended to bring the provision for Appellate Tribunal under the CGST Act in the Union Territory of Jammu and Kashmir and Ladakh.
12. Transitional Arrangement for ITC:-
Section 140 of the CGST Act is being amended with effect from 01.07.17, to prescribe the manner and time limit for taking transitional credit.
13. Removal of Difficulties:-
Section 172 of the CGST Act is being amended to make provision for enabling issuance of removal of difficulties order for another 2 years, i.e. till five years from the date of commencement of the said Act. Similar changes are also being made in the IGST Act,2017 (section 25), the UTGST Act,2017 (section 26) and the GST (Compensation to States) Act, 2017 (Section 14).
14. Amendment in Schedule II of the CGST Act:-
Entries at 4(a) & 4(b) in Schedule II of the CGST Act is being amended with effect from 01.07.2107 to make provision for omission of supplies relating to transfer of business assets made without any consideration from Schedule II of the said Act. The proposed changes in GST Laws will come into effect from the date when the same will be notified, as far as possible, concurrently with the corresponding amendments to the similar Acts passed by the states & Union Territories with legislature.
15. Retrospective Amendments under GST:-
Retrospective amendment in the Goods and Service Tax rate and refund provisions:-
Refund of accumulated credit of compensation cess on tobacco:-
The refund of accumulated credit of compensation cess on tobacco products arising out of inverted duty structure in compensation cess has been disallowed with effect from 01.10.2019 vide notification No. 3/2019-Compensation cess (Rate) dated 30.09.2019. This notification is being given retrospective effect from 01.07.2017 0nwards. Accordingly, no refund on account of inverted duty structure shall be admissible on tobacco products for any period.
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