The government’s decision to pay at least 1% of GST’s tax obligations in cash applies only to establishments with annual sales of Rs 600 million, and the new rules do not apply to SMEs, composers and the Treasury. .. Sources said on Sunday.
Based on the recommendations of the GST Law Commission, the government has notified new indirect tax rules that require companies with taxable supplies in excess of 50 rack rupees per month to pay 1% of their GST tax obligations in cash. did. This change will be effective from January 1, 2021.
The new rules have raised concerns that forced cash payments will adversely affect SMEs and increase their working capital requirements.
“Contrary to what is being supplied, the new rules only help mitigate the threat of fake ITC use and affect only dangerous and suspicious dealers or nighttime operators. Disturbing honest taxpayers. I never do it, “said one. Of the sources cited above.
Apart from the sales exemption, the cash payment rules do not apply if the registrant has deposited more than 1 rupee as income tax in the last two years and such a person receives a refund of more than 1 rupee. Hmm. Previous fiscal year due to export or reverse taxation. Also, cash rules do not apply to government sectors, PSUs, and local governments.
Explaining why this rule was introduced, a high-ranking Treasury source said that legitimate businesses are operating for profit and are expected to have minimal added value. Taxes are not paid in cash only if a lot of fake credits are used. In addition, dummy companies that generate fake ITCs or are used as layers of multi-layered fake credit flows do not pay taxes in cash.
“This provision is a very wise rule against fraudsters and does not affect the ease of doing business or a real entity,” said a Treasury source.
Regarding sales-based exemptions, the Treasury has clarified only those companies whose sales exceed 6 chlores, pay more than 99% tax through ITC (Temporary Tax Credit) and still pay income tax less than Rs 10,000. did. Within a year-become a dangerous category under this rule.
The new rules show high sales, but are not financially credible, and after issuing fake invoices and abusing ITC, fake ITC exploitation and passing by fake, fake, and dormant entities. Expected to control invoice scammers.
The seriousness of this threat to the GST ecosystem began in the second week of November and has arrested more than 175 fraudsters in a recent national effort to combat fake bill fraud by GST. It can also be understood by the fact that it was done. Over 1,800 cases have been booked for 8,000 fake entities in just 40/45 days.
Cash GST Tax Obligations: Not Confused Now!Modi Government's decision to require payment of at least 1% only for these entities
https://www.zeebiz.com/small-business/news-gst-tax-liability-in-cash-no-confusion-now-modi-governments-decision-on-mandatory-payment-of-at-least-1-only-for-these-entities-144644 Cash GST Tax Obligations: Not Confused Now!Modi Government's decision to require payment of at least 1% only for these entities