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February 26, 2021

5 changes in GST that will come in play from 1st April 2021

by CA Jessica Nagaonkar in GST

5 changes in GST that will come in play from 1st April 2021

Finance Minister Nirmala Sitharaman proposed many new measures in the Budget 2021 to prop up the declining economy amid the Covid-19 pandemic and boost spending across sectors. Budget 2021 focused on the seven pillars for reviving the economy – Health and Wellbeing, Physical and Financial Capital and Infrastructure, Inclusive Development for Aspirational India, Reinvigorating Human Capital, Innovation and R&D, and Minimum Government Maximum Governance. Several direct taxes and indirect taxes amendments were also proposed. Given below are 5 changes in GST that will come in play from 1st April 2021

1. Attachment of Property under Section 83

  • Any litigation under various tax laws, including GST, might take a considerable amount of time.
  • The pendency of any proceedings could potentially delay the earning of revenue by the government.
  • Further, the taxpayer may transfer his property to another person before the end of the proceedings.
  • In order to protect the interests of the revenue during the pendency of any proceedings, the government has the power to provisionally attach the properties of the taxpayer.
  • It has been proposed in Section 83(1) of CGST Act that in cases of tax evasion due to bogus bill, non-existent vendor, circular trading etc., the tax officer now has the power to attach the assets of the company including the bank account.
  • The officer can also provisionally attach property and bank accounts of company directors, partners, company secretary, employees, Managers, CA, CS, Cost Accountants, the associated Auditors, advisors and Advocates or any other person at whose instance such transaction is conducted.

2. Power to Collect Statistics under Section 151

  • The GST law gives powers under section 151 of the CGST Act 2017 to the Commissioner or an Officer authorised by him to furnish information relating to any matter dealt with in connection with this Act, within such time, in such form, and in such manner, as may be specified therein.
  • Such information may be published in the public domain if the Commissioner has an opinion that such publication is desirable in the public interest.
  • This will indirectly result in a greater number of cases, a greater number of disputes, businesses will get less time to represent themselves because everything will be based on third party documents.

3. Enhanced Penalty under Section 129

  • Section 129 of the CGST Act, which deals with the detention, seizure and release of goods and conveyances in transit, has been proposed enhancement of penalty to 200% of tax payable (earlier it was 100%)
  • Also, goods seized shall not be released on provisional basis upon execution of a bond and furnishing security and the penalty imposed by the officer will have to be paid in cash by the taxpayer.

4. Consequences in case of Delay in Deposit of Tax by Transporter

  • Where the person transporting any goods or the owner of such goods fails to pay the amount of penalty under Section 129(1) within fifteen days from the date of receipt of the copy of the order passed under Section 129(3), the goods or conveyance so detained or seized shall be liable to be sold or disposed of otherwise, in such manner and within such time as may be prescribed, to recover the penalty payable under sub-section (3) 
  • The conveyance shall be released on payment by the transporter of penalty under sub-section (3) or one lakh rupees, whichever is less
  • Where the detained or seized goods are perishable or hazardous in nature or are likely to depreciate in value with passage of time, the said period of fifteen days may be reduced by the proper officer.
  • In simple words, in case the transporter or owner fails to pay the amount of penalty within 15 days of the issuance of MOV 6 / MOV 7, the goods or conveyance so detained or seized shall be liable to be sold or disposed of to recover the penalty.

5. Mismatch in return, may lead to recovery or cancellation under Section 75

  • As per the proposed changes, committing a mistake in calculating excess tax under section 75 (12) of GST will result in the Department charging it as self-assessment tax without issuing any show cause tax notice.
  • Similarly, the tax officer can even cancel your registration if he/she finds out a difference between the figures of GSTR 1 and 3B.
  • Input Tax credit for buyers will also now only be available after the supplier properly files the return and the same is reflected in his GSTR 2A.

Amendments carried out in the Finance Bill, 2021 will come into effect from the date when the same will be notified and when the said clause also gets concurrently notified with the corresponding amendments passed by the respective States and Union territories in respective SGST/ UTGST Act.

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