The Government of India levies the Goods and Services Tax on the country’s supply of goods and services. The GST mechanism was introduced to subsume different taxes, duties, and cesses that made taxation a tough exercise.
Only half a decade old, the GST system is relatively new and keeps on undergoing updates, changes, and amendments to the GST Act. The GST Council keeps releasing updates to make taxation easy, transparent, and hassle-free.
As a taxpayer, you must be up-to-date with all the changes that the Government and the GST Council propose and approve. Here is a list of 10 updates under GST that the Indian Government has approved that you must know about.
Latest GST updates you must know about
- GST on supply of restaurant services via an eCommerce operator
Until now, the restaurant or the eatery was supposed to pay GST on the supply or delivery of food via an eCommerce operator (Swiggy or Zomato). With changes in the GST, restaurant services have been notified that from January 1, 2022, the eCommerce operators will be liable to bear the GST cost.
However, it is important to note that eCommerce operators will be liable to pay GST on the supply of restaurant services OTHER THAN the services supplied by a restaurant or eating to join located at SPECIFIC PREMISES.
‘Specific premises’ refers to hotel accommodations that have a declared tariff or any unit above Rs 7,000 per day. For example, Hotel Taj Palace in Delhi has rooms with a starting tariff of Rs 10,000 per day. Thus, the GST on the restaurant services supplied by a restaurant in Hotel Taj Palace will have to be paid by the restaurant and not the eCommerce operator. - New functionality on interest calculation
The deployment of an interest calculator in GSTR-3B will allow taxpayers to self-assess the interest. The system will compute the interest based on the taxpayer’s tax liability as declared by them in GSTR-3B. This will help taxpayers correctly compute the interest for the tax liability of any period in the past. - Registration
An alert will be shown in the Returns Module whenever the taxpayer’s status or the taxpayer’s category is changed. - Reducing the frequency of filing Form ITC-04
Until now, taxpayers had to file the details of the goods sent or received back or disposed of in Form ITC-04 on a quarterly basis. After the latest update, the frequency of filing this Form ITC-04 has been reduced to either half-yearly or annually based on the taxpayer’s aggregate turnover in the preceding financial year.
Taxpayers with an aggregate turnover of over Rs 5 crore in the preceding year will file the Form ITC-04 on a half-yearly basis, while all other taxpayers will have to file the Form ITC-04 on an annual basis. - Update in the Refund Form RFD-01
The latest update has changed how taxpayers’ messages will be displayed after they apply for a refund in Form RFD-01.
NIL refund filers will be sent a message reading, “no further processing is required since it is a NIL refund application.”
Meanwhile, the status of the refund order issued in Form RFD-06 will give a message saying, “refund sanctioned in RFD-06”, or “refund partially sanctioned in Form RFD-06”, or “RFD-06 issued, refund rejected” based on your application. - Change in GST rates
The GST Council has revised the GST rates for some goods and services. Here is a comprehensive list:-
- Footwear: Any footwear that costs over Rs 1,000 will now attract a GST of 12% instead of the previous 5%.
- >Online auto bookings on ride-hailing apps: Auto and two-wheeler bookings on ride-hailing apps (Uber, Ola) will now attract 5% GST from the previous no taxation.
- Food delivery: Food eCommerce operators charge 5% GST on their services.
To know the different tiers and slabs of the current GST structure in India, read our blog here!
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- GST changes to claim ITC
As per the latest change, an entity receiving goods and services from a supplier can claim an Input Tax Credit (ITC) only when the supplier has uploaded their invoices, filed GSTR-1, and made the payment. The provision to claim a 5% ITC as provisional credit is no longer valid, and ITC can only be claimed instead of invoices where the tax has been paid. - Furnishing GSTR-3B to file GSTR-1
GSTR-1 is a mandatory monthly statement of outward supplies of goods and services, which contains the details of goods and services supplied by an entity in a particular month. This has to be filed each month by a registered business.
GSTR-3B is a self-declaration of the summary of the GST filed each month by a registered entity. Before making the self-declaration and filing the GSTR-3B, the entity must have paid the GST liability.
As per the latest update, all registered persons will be barred from filing GSTR-1 if they don’t furnish GSTR-3B for the preceding month. For example, if you want to file GSTR-1 for February, you will have to furnish the GSTR-3B for January as proof of filing your taxes on time. - Aadhaar authentication for GST Revocation and Refund Application
Aadhaar authentication is now mandatory for applying to revoke the cancellation of Form GSTR-REG21, filing a refund application, and seeking a refund on the IGST paid on exported goods.
In the case an Aadhaar number is not allotted to the entity, they can undergo e-KYC using their Aadhaar enrolment number to complete the process. - Violation of e-Way Bill provisions
Amendment in Section 129 of the GST Act will now impose a 200% penalty levied to release the goods seized for e-Way Bill violations. Further, if the goods are seized in transit, then the payment has to be made within 7 days of issue of notice, down from the earlier 14 days from the issue of notice, to conclude further proceedings.
The GST system in India continues to evolve, with the Government constantly trying to ease the tax filing process. Apart from staying updated with the latest GST updates, you can move to an automated GST filing software like KYSS, which allows you to file your GST in a matter of minutes without any extra effort! Call us for a demo today to see how KYSS revolutionizes how you do your taxes!