Businesses with monthly turnover of over Rs 50 lakh will have to mandatorily pay at least 1 per cent of their GST liability in cash, the finance ministry said as it moved to curb evasion by fake invoicing.
The Central Board of Indirect Taxes and Customs (CBIC) has notified certain changes to the Goods and Services Tax (GST) Rules, bringing in stringent conditions for getting GST registration as well as for businesses to settle tax liability using input tax credit.
The CBIC has introduced Rule 86B in GST Rules, to be applicable from January 1, 2021, which 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.
However, this restriction will not apply where the managing director or any partner has paid more than Rs 1 lakh as income tax or the registered person has received a refund amount of more than Rs 1 lakh in the preceding financial year on account of unutilised input tax credit.
Further, the CBIC has amended GST rules restricting filing of outward supply details in GSTR-1 for business that have not paid tax for the past periods by filing GSTR 3B.
So far, non-filing of GSTR 3B resulted in blockage of e-way bill but will now result in GSTR 1 blockage as well.
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