The Goods and Services Tax has been instrumental in simplifying the process of indirect tax collection in the country. Since it came to force in 2017, the tax collected from it has driven the nation to an improved and a more stable economy. Many of the developments seen in recent days would not be possible in the absence of GST.

However, in the last few years, several scopes of improvements were noted in the implementation of GST. The menace of identifying and tackling fake invoices became a significant challenge for the government.

It is because of this that the Union Budget had specific mentions for the GST. This article will throw light on the critical GST related announcements made in the Union Budget 2020.

Union Budget 2020

Union Finance Minister, Nirmala Sitaraman made the following significant GST related mentions in the Union Budget of 2020. Since then these have received the consent of the President, and on the 27th of March, they were implemented as the Finance Act 2020.

Take a look at the top three GST related highlights of the budget:

• In the past, only the person who files a fake ITC was liable for a penalty. Now, any person who stands to gain out of a fake ITC will also be responsible for the penalty. The penalty shall amount for a complete 100% of the tax amount involved. Such an offence will be non-bailable and invoke suitable legal action as dictated by the court.
• The date of the issue of debit note has been delinked from the date of invoice generation. Even if the invoice generation happens months later, there will be no impact on the GST payment due date. As per the details spelt out by the Finance Minister, availing input tax credit shall depend solely on the date of issuance of the debit note.
• Supplies that are leviable under GST, supplies where the e-commerce service provides deducts TCS and domestic supply of goods are the only three scenarios where the Composition Scheme under GST is applicable. This is initiated to ensure that the composition scheme is not misused and that it benefits those who deserve it the most.

Other Important Amendments

• As per the original GST rules, a business owner can have multiple GSTINs to their name. While this still holds, recent amendments give individuals the option to cancel their gstin registration. Such cancellations will be allowed as long as the taxpayer has at least one active GST identification number to their name.
• Every year, the provision of an Inverted Tax allows many taxpayers to claim a refund. As per the latest gst amendment, such returns which are most commonly seen in tobacco products stand cancelled. This tax is expected to make a significant contribution to the GST revenue collection in the country.
• Previously, any order for calculating the expense in special audit under GST needed to be pre-approved by the Board. The amendment takes away the need for approval. That way, you can expect a more significant number of individual audits to happen, and a more transparent GST ecosystem may be envisioned.
• Another giant step in the path of transparency is the fact that Schedule II of CGST will directly exclude any monetary transaction that was carried without its consideration. Thus, businesses that are looking towards transferring partial or complete business assets from one taxpayer to the other need to be extra vigilant.
• The amendment to the original GST law has brought forth a provision wherein the deadline to return capital goods (or any other form of input) from job worker can be extended. This will ease the pressure off small to medium-sized businesses and help them survive in the competitive market.
• The concept of GST revolves around the appropriate distribution of revenue earned between the centre and the different states(with specific measures about the Union Territories as well). In a recent amendment, it has been decided that the state of Jammu and Kashmir will have an appellate tribunal while Ladakh will now be treated as a Union Territory for all purposes concerning the implementation of GST.

Conclusion

Indeed, the last couple of years has seen primal changes in the implementation of GST. All such changes have been in place to make the GST framework more robust and to punish those attempting malicious activities to escape from the law. With the Union Budget 2020 paving out a well-defined path of growth, the future of GST does look promising.

Danny White