Big change in GST filing: Now some part of tax will have to be paid in cash, otherwise there will be heavy loss!

There is a very important and big news for taxpayers filling GST. The central government has made an important change in the GST rules, which may cause you to suffer a big loss if not followed. This new rule will especially affect big businessmen and service providers, who have so far been paid through their entire GST liability input tax credit (ITC).

What is this new and important rule of GST?

The Central Indirect Taxes and Customs Board (CBIC) have made a major change by adding section 86B (Rule 86B) to the GST rules. Under this new rule, all those registered persons or businesses whose monthly taxable turnover More than ₹ 50 lakh Is, of its total monthly GST liability It will be mandatory to pay in at least 1 percent cash (cash)This rule will also apply when adequate input tax credit (ITC) is available in their electronic credit ladger – ECL.

Earlier, many big businessmen used to pay more than 99% of their GST liabilities only using ITC and did not pay anything in cash.

Why did the government take this decision?

The main objective of implementing this strict rule is to tighten the businesses that were incorrectly claiming ITC through fake invoices and fraudulent transactions and were incorrectly claiming ITCs and stealing taxes. The government believes that those who are involved in such fraud, often do not make cash payments in their business very little or at all, as their only purpose is to take advantage of fake ITC. By compulsory this 1% cash payment, it will be easy to catch and stop such scams. This step is a major step towards preventing tax evasion and making the GST system more transparent.

Who will be exempted from this rule? (That is, who does not need 1% cash payment)

The good thing is that this rule will not apply to all. Registered persons of some specific categories are exempted from this:

1. Government institutions and public sector undertakings (psus): Such as government departments, public sector undertakings, local authority or any statutory body.

2. Honest Income Tax payer: If any registered person (or any proprietor), or partnership firm or an organization of individuals (AOP), any of his partners or members last previous Income tax of more than ₹ 1 lakh in two financial years If you have repaid, they will be exempted from this rule.

3. Those who have received the refund of ITC: A registered person who has received a refund of input tax credit of more than ₹ 1 lakh under inverted duty structure (Inverted Duty Structure – ie where the tax rate is higher than the tax rate output).

What will be the loss if the rule is not followed?

If your business falls in the range of more than ₹ 50 lakh monthly turnover and you are not in the category of these exemptions, but still do not follow your 1% cash payment mandatory, then you can be acted upon by GST officials. This can not only include heavy fines, but can also begin an audit or intensive examination for your business, which can increase your financial and business loss.