In a bid to check evasion by fake invoicing, the finance ministry said that businesses with monthly turnover of more than Rs 50 lakh will have to mandatorily pay at least 1 per cent of their GST liability in cash.
Some amendments to the GST Rules have been notified by the Central Board of Indirect Taxes and Customs (CBIC) that bring in rigorous conditions to get GST registrations and settle tax liability using ITC or input tax credit for businesses. From January 1, 2021, rule 86B in GST Rules will kick off that restricts use of input tax credit for discharging GST liability to 99 per cent.
"... The registered person shall not use the amount available in electronic credit ledger to discharge his liability towards output tax in excess of 99 per cent of tax liability, in cases where the value of taxable supply ... in a month exceeds Rs 50 lakh," the CBIC said.
Nonetheless, this limitation shall not apply in a case where the MD or any partner has paid over Rs. 1 lakh as income tax or the registered person has been in receipt of a refund amount of over Rs. 1 lakh in the previous fiscal year due to unutilised input tax credit.
Also, the CBIC has modified GST rules restraining filing of details of outward supply in GSTR-1 for business that have not paid tax for the previous periods by filing GSTR 3B. Until now, non-filing of GSTR 3B led to blockage of e-way bill but henceforth it will now also block GSTR 1. "In order to curb the GST fake invoice frauds, the Govt on the recommendations of the GST Council's Law Committee has issued a notification to deal with the menace of fraudsters who avail & pass on ineligible ITC by fake or fly-by-night firms," Finance Minister Nirmala Sitharaman tweeted.
The CBIC has booked as many as 12000 ITC fraud cases and arrested 365 persons in these cases so far. And in the last one and a half month alone, more than 165 fraudsters have been arrested.
With PTI Inputs