CBIC vide Notification No. 94/2020 – Central Tax dated 22nd December 2020 has amended CGST Rules, 2017. These rules may be called the Central Goods and Services Tax (Fourteenth Amendment) Rules, 2020. The various amendments are as follows:
The time for system-based registration has been enhanced from 3 days to 7 days. That means, now department shall be required to review and grant registration within 7 days against 3 days as provided earlier from the date of filing of the registration application. Where the applicant does not opt for adhaar authentication or where the department feels fit to carry out physical verification the time limit for grant of registration shall be 30 days instead of 7 days.
The claim of ITC in respect of invoices not furnished by the corresponding vendors has now been restricted to 5% of the credit available in GSTR 2A. This limit earlier was 10% of ITC available. This would mean that a taxpayer’s ITC claim shall now be restricted to 105% of the Credit reflected in his GSTR 2A. Any claim exceeding the specified limit shall result in a violation of the CGST Act read with rules which may result in the suspension of GSTIN as described above. The provision shall come into effect from 1st January 2021.
Where a taxpayer fails to file GSTR 3B for two subsequent months, his GSTR 1 shall now be blocked. Earlier non-filing of GSTR 3B used to result in blocking of E-way Bill facility but from now on it shall also result in blocking of GSTR 1 of the taxpayer. Similarly, for quarterly return filers, the taxpayer who fails to file GSTR 3B for the preceding quarter shall not be permitted to file GSTR 1 of the subsequent quarter.
A taxpayer who is restricted to avail ITC as per rule 86B shall also not be permitted to file GSTR 1 where he has not filed GSTR 3B for the preceding tax period.
New Rule 86B shall be affected from 1st January 2021 wherein restriction has been placed on setting off more than 99% of tax liability from Input tax credit where the value of taxable supplies other than exempt supply and zero-rated supply exceeds INR 50 lakhs in a month. Though few exceptions have been provided to this rule which are as follows:
Earlier one day was permitted for a distance up to 100kms under e way bill provision. Now the same has been increased to 200kms. This means that only one-day validity shall be granted to cover a distance up to 200kms which was earlier than 100kms.
Source: CBIC Notification94
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