Background
We have certainly witnessed serious frauds under GST since the implementation mainly due to fake invoicing. Of course we cannot paint all the frauds with the same brush but largely it has to do with the seeking of the undue benefit at the cost of the exchequer. Hence on one side, there is a need to improve the system as well as the administration to check the frauds. However on the other side, one must be very conscious while considering a path, which gives abundant power to bring a halt to the business merely on some anomalies not in the nature of fraud, without instilling enough checks and balances in the system.
Far-reaching amendments have been made in the CGST Rules, 2017 vide Notification No. 94/2020-Central Tax with the purported aim to tackle the menace of fake invoicing. Wide powers have been granted to suspend the registrations (which will lead to the complete halt of the business) and restrict the availment of ITC for the invoices not furnished by the vendors (beyond the tolerance of 5%). The filing of GSTR 1 shall be suspended on failure to file GSTR 3B for the past two tax periods for general category of taxpayers. The travel time (i.e. validity of E-way bill) have been reduced by 50%. Also new rule (subject to certain exceptions) mandating compulsory payment of tax of at least 1% by cash (even though sufficient balance of ITC is available) has been introduced. Biometric checks and the power to visit the premises before granting the registration has been introduced. All of these changes have been made as stated earlier to tackle the menace of fake invoicing. However, all the taxpayers must now take extreme care to avoid breaching the rules as the said taxpayer will then have to face a complete halt to his business.
Read more on: https://taxguru.in/goods-and-service-tax/summary-important-gst-applicable-01-01-2021.html
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