Before listing new GST updates, let us understand it a bit.
What are the components of GST?
There are three taxes on this system: CGST, SGST, and IGST.
CGST: This is the tax levied by the central government on a domestic sale (e.g. a transaction within Maharashtra).
SGST: This is the tax imposed by the state government on a domestic sale (e.g. a transaction within Maharashtra).
IGST: It is a tax levied by the central government on an interstate sale (e.g. Maharashtra to Tamil Nadu).
How did GST contribute to the price reduction?
During the pre-GST regime, every buyer, including the end-user, paid taxes on taxes. This tax condition is known as the cascade effect of taxes.
GST removed the cascading effect. The tax is only calculated on the value-added at each stage of the transfer of ownership.
The indirect tax system according to GST will integrate the country with a uniform tax rate. It will improve the collection of taxes and promote the development of India’s economy by removing the indirect tax barriers between states.
In the case of the tax on goods and services, there is a way to claim the tax credit for the acquisition of inputs. The person who has already paid a tax can credit that tax when filing their GST returns.
Ultimately, every time a person can claim the pre-tax credit, the selling price and cost price for the buyer are reduced due to lower tax liability. The final value of the cookies will therefore be reduced from Rs.2.244 to Rs.1.980, which will reduce the tax burden on the end customer.
What are the new updates under GST?
In addition to the online filing of GST reports, the GST regime has introduced several new systems.
With the introduction of “e-way bills”, GST introduced a central system of waybills. This system was introduced in stages on April 1, 2018, for the interstate movement of goods and on April 15, 2018, for the domestic movement of goods.
With the e-way invoicing system, manufacturers, dealers, and transport companies can easily create e-way invoices for the goods that are transported from the place of origin to the destination on a joint portal. The tax authorities also benefit as this system reduces the time at the checkpoints and contributes to tax evasion.
The e-invoicing system introduced in January 2020 was for trial. It will apply from October 2020. Large companies with a total annual turnover of more than 100 billion rupees must meet certain requirements for this system.
You must obtain a unique invoice reference number for each business-to-business invoice by uploading it to the GSTN portal known as the invoice registration portal. The portal checks the correctness and authenticity of the invoice. The digital signature is authorized by a QR code.
Electronic invoicing enables invoices to be interoperable and helps reduce data entry errors. It is used to forward the billing information directly from the IRP to the GST portal. This eliminates the need for manual data entry when submitting ANX-1 / GST returns and creating Part A of the e-way invoices.
The GST portal has been expanded to 3 lakh taxpayers at the same time
The capacity of the gateway has been increased from 1.5 lakh to 3 lakh. In preparation for the expected increase in indirect tax activities on the portal after the lockdown was eased. If necessary, the GSTN can even manage and scale up to five lakh simultaneously with taxpayers. “The GST ecosystem is future-proof to offer taxpayers a seamless experience with its expanded capacity. The increase during peak filing, GSTN also took over the performance and stress tests of GST system applications. That helped identify and eliminate bottlenecks in the software, ”the official statement continued.
According to ANI news agency, GSTN data shows a sudden spike in GSTR-3B filing, in September 2020. Also, the number of active taxpayers has doubled since GST launched at around 1.3 crores.
“This increase was due to the backlog in previous months in filing tax returns. For this the taxpayers were granted easing amid the Covid-19 outbreak,” the official statement said.
Another GST update is e-invoicing mandatory from January 1, 2021 if turnover exceeds Rs. 100 crore
Advantages of GST:
- GST removes the cascading effect of Tax.
- Higher threshold for GST registration.
- Composition scheme for small businesses.
- Simpler online facilities for GST compliances.
- Relatively lesser compliances under GST.
- Defined treatment for eCommerce activities.
- Increased efficiency in logistics.
- Regulation of unorganized sectors.
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2 thoughts on “GST Updates & Latest News 2020”
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