Food aggregators such as Swiggy and Zomato will be required to collect and deposit taxes at a five percent rate starting Saturday, a move that will broaden the tax base as food vendors currently outside the GST threshold will be subject to GST when entering through these online platforms. to be offered .
Currently, restaurants registered under GST collect and deposit the tax. Also, taxi companies such as Uber and Ola will have to collect five percent goods and services tax (GST) for booking two- and three-wheel vehicles from January 1. Footwear, regardless of price, will also be subject to a 12 percent tax from Saturday.
These are some of the many changes to the GST regime that have come into effect in this new year 2022. Also to address evasion, the GST Act has been amended to state that the pre-tax rebate will now only be available once the credit in GSTR 2B (purchase return) from the taxpayer. A provisional five percent credit, previously allowed under the GST rules, will no longer be allowed after January 1, 2022.
EY India Tax Partner Bipin Sapra said: “This change will have an immediate impact on the working capital of taxpayers who currently receive credit equal to 105 percent of matched credit. The amendment will also require the industry to validate that purchases were made with genuine and compliant suppliers.”
The other anti-evasion measures that would come into effect from the new year include mandatory Aadhaar authentication for claiming GST refund, blocking the possibility of GSTR-1 declaration in cases where the company has not paid tax and GSTR-3B filed immediately last month.
Currently, the law restricts the filing of outbound delivery returns or GSTR-1 in the event that a company does not file GSTR-3B from the previous two months.
While companies file GSTR-1 for a given month before the 11th of the following month, GSTR-3B, which helps companies pay taxes, is filed between the 20th and 24th day of the following month.
Also, the GST Act has been amended to allow GST officials to visit a property to recover tax dollars without prior notice of reason, in cases where the taxes paid in GSTR-3B are lower based on the suppressed sales volume, in comparison with the specified delivery details in GSTR-1.
Sapra said that while the amendment is likely to curb the malpractice of passing pre-tax credits by declaring in GSTR-1 without paying taxes in GSTR 3B, real differences in GSTR-1 and GSTR 3B such as transfers of unadjusted credit notes are likely to be faced. unnecessary control.
The measure aims to curb the threat of false billing where sellers would show higher sales in GSTR-1 to enable buyers to claim input tax (ITC), but report suppressed sales in GSTR-3B to allow the GST- reduce liability.
Nexdigm Executive Director (Indirect Tax) Saket Patawari said that e-commerce operators now have to pay GST instead of the restaurants and that the government tax base may increase as a result of the above as these operators owe GST even for non- registered restaurants.
“E-com operators may be required to obtain registration in any state where restaurants are located, even if they do not have a presence, and to perform all regular GST compliances, even if they do not have infrastructure in the state. can be challenging to handle audits and investigations in all states, especially for start-ups and new e-com operators,” added Patawari.
Sapra went on to say that this change will also broaden the tax base, as food vendors currently outside the GST threshold will become subject to VAT when offered through these online platforms. So make purchasing from these platforms more expensive.
“Since restaurants sometimes deliver goods along with restaurant services, an invoice can contain multiple payments by multiple people and would complicate operations. This practice of charging e-commerce operators for deliveries made through them puts an additional burden on a platform that just facilitates the supply,” Sapra added.