Key GST, other changes coming into effect from January 1. Details here
The government is implementing these changes to prevent evasion and fake billing. The exchequer has been reporting loss due to existing GST structure, which is being mis-utilised by establishments.
The Goods and Services Tax (GST) regime will see a number of changes from January 1, 2022. There will be some procedural changes as well, which will impact e-commerce players and food delivery aggregators, but will spare the end consumers.
The government has introduced these changes to make these platforms liable for GST deposit, which it says will curb tax evasion.
What will be the changes in the GST?
The correction in inverted duty structure in footwear and textile sectors would come into effect from January 1 wherein all footwear, irrespective of prices, will attract GST at 12 per cent while all textile products, except cotton, including readymade garments will have 12 per cent GST.
While the passenger transport services provided by auto rickshaw drivers through offline/manual mode would continue to be exempt, such services when provided through any e-commerce platform would become taxable effective January 1, 2022, at 5 per cent rate.
What are the procedural changes coming into effect from Saturday?
The procedural changes that would come into effect include Swiggy and Zomato being made liable to collect and deposit GST with the government on restaurant services supplied through them from January 1. They would also be required to issue invoices in respect of such services.
Why this has been done?
The GST Council, in a meeting in September this year, identified that there was no mandatory registration check by Swiggy/Zomato and there were unregistered restaurants supplying through these apps.
As per estimates, tax loss to exchequer due to alleged under-reporting is ₹2,000 crore over the past two years.
Will there be any burden on end consumers?
No. The procedural changes that would come into effect from January 1 will make the food delivery companies liable to collect and deposit GST with the government on the restaurant services. They would also be required to issue invoices in respect of such services.
There would be no extra tax burden on the end consumer as currently restaurants are collecting and depositing GST. Only, the compliance of deposit and invoice raising has now been shifted to food delivery platforms.
Other changes from January 1
The other anti-evasion measures which would come into effect from the new year include mandatory Aadhaar authentication for claiming GST refund, blocking of the facility of GSTR-1 filing in cases where the business has not paid taxes and filed GSTR-3B in the immediate previous month.
Currently, the law restricts filing of return for outward supplies or GSTR-1 in case a business fails to file GSTR-3B of preceding two months.
Also, the GST law has been amended to allow officers to visit premises to recover tax dues without any prior show-cause notice, in cases where taxes paid in GSTR-3B is lower based on suppressed sales volume, as compared to supply details given in GSTR-1.
The move would help curb the menace of fake billing whereby sellers would show higher sales in GSTR-1 to enable purchasers to claim input tax credit (ITC), but report suppressed sales in GSTR-3B to lower GST liability.