Changes in GST From 1 January 2024 (List of all changes)

Changes in GST From 1 January 2024 (List of all changes with analysis). Let us try to understand some of the major changes in the GST law from January 01, 2024.

1. Major Changes in Input Tax Credit Rules :

If there is anything most attractive and beautiful about GST, it is   – “Input Tax Credit ”.. Truly it is the heart of GST. When this law was made, one of the main objectives behind it was that everyone should get uninterrupted input. But today the reality is different. The promise made by the government today has become a source of trouble for the government. Today, the government has put a lot of restrictions on every provision of input whether it is section 16(4), 17(5), rule 36(4) or 86A. Such restrictions were being opposed by all sections from the very beginning. The government’s argument was that such rules could prevent fake bills and fake inputs somewhere. But the truth is that despite so many restrictions, it does not seem to have any effect on the fraudsters. Now the government is once again trying to overcome this with a new rule 86B. Let us try to understand how the government has once again wanted to change the provisions of input from January 01:

The limit of Rule 36(4) has been reduced from 10% to 5%.

Rule 36(4) was implemented by the government from 01/10/2019 under which any taxpayer could take only 20% and more of the inputs shown in your GSTR-2A. Later on from January 01, 2024, the government had reduced this limit to 10%. Now again from January 01, 2024, the government has changed this rule and has reduced its limit to only 5%. This means that if the input is Rs 100 in your GSTR-2A in a month, then you can take input up to a maximum of Rs 105 even if the input is coming in your accounts Rs 150. Non-filing of GST return by your seller is now going to cost you heavily. 

Now you are going to have a double whammy of tax – one when you buy the goods from the seller by paying full amount and secondly when your GSTR-2A will not be input by your seller for not filing his GST return. This rule has been surrounded by controversies from the beginning and has been implemented in many High Courts till The challenge has been given. But the decision is pending. If I remember correctly, such a rule was there in any state law even in the time of VAT law which was challenged in the court and the court rejected it quite correctly by arguing that your seller’s mistake The government cannot recover from you by denying your input because it is not in your control and is completely out of your control. 

The arguments given in this decision are equally applicable to the GST law. But the intention of the government is very clear now and it does not want to relax this rule. The author estimates that in the coming time, the government will reduce this limit from 5% to 0% and will give the same input as shown in your 2A / 2B. The court rejected it quite correctly and said that the government cannot recover the penalty for your vendor’s mistake by denying your input because it is not in your control and completely out of your control. 

The arguments given in this decision are equally applicable to the GST law. But the intention of the government is very clear now and it does not want to relax this rule. The author estimates that in the coming time the government will reduce this limit from 5% to 0% and will give the same input as shown in your 2A / 2B. The court rejected it quite correctly and said that the government cannot recover the penalty for your vendor’s mistake by denying your input because it is not in your control and completely out of your control. is. The arguments given in this decision are equally applicable to the GST law. But the intention of the government is very clear now and it does not want to relax this rule. 

The author estimates that in the coming time, the government will reduce this limit from 5% to 0% and will give the same input as shown in your 2A / 2B. does not want to give The author estimates that in the coming time the government will reduce this limit from 5% to 0% and will give the same input as shown in your 2A / 2B. does not want to give The author estimates that in the coming time, the government will reduce this limit from 5% to 0% and will give the same input as shown in your 2A / 2B.

One more thing the government has changed in this rule is that earlier, even if your seller had uploaded the details in GSTR-01 (without filing the return), you would have got the input as shown in GSTR 2A. But many taxpayers misused this relaxation and took more inputs. Now the government has amended this rule to inform that under rule 36(4), now only the input can be taken after filing / furnishing GSTR-01.

Payment/adjustment of tax from input credit will be up to 99% of the tax payable :

Giving another gift from January 1, 2024, the government has implemented a new rule 86B, under which the taxpayer will now have to pay at least 1% of the tax due from the cash ledger. However, this rule will not be applicable in some places such as –

• Taxpayers whose monthly turnover is less than 50 lakhs. While exiting this limit, it will be seen after giving Exempted Supply and Export Turnover.
• If that taxpayer, proprietor, KARTA of HUF, MANAGING DIRECTOR, WHOLE TIME DIRECTOR, TRUSTEES ETC has paid his income tax for at least last two years more than Rs 1 lakh per year.
• If in the previous year the taxpayer has taken refund of more than Rs 1 lakh which is of Unutilized Input Credit on doing ZERO RATED SUPPLY or of Inverted Duty Structure.
• If the tax paid in cash by that taxpayer cumulatively exceeds 1% of the output tax, then he will not be required to comply with this rule.
• If the taxpayer is a government department, a public sector undertaking, a local body or a constitutional body.

The government has once again put the traders in a dilemma by bringing this rule. First of all, questions are being raised about the right of the government to make such rules in the law. The second thing is that under this rule, no rationale has been given even behind allowing adjustment of output tax up to 99% with input tax. 

Tax experts believe that why only 99%? Taxpayers will now also have to keep a separate account of that in which month his tax liability exceeds the total tax payment of 1% and he can get rid of this rule. The biggest thing about this rule is that the GST law has now been linked to income tax as well. It is possible that in the coming time, the government will also link the GST law with PF, ESI PROFESSION TAX or any other law.

The author believes that this rule may also be challenged in the court in the coming times because such restriction on the use of input tax is neither mentioned in section 49 nor in section 16. provision has been made.

2. E-INVOICING :

It has come into effect from 2024. Till now, this rule was applicable to select taxpayers whose annual total turnover in the previous year exceeds Rs 500 crore. But now the government is going to implement this rule on all those taxpayers whose annual turnover is more than 100 crore rupees. The point to be noted in this provision is that the merchant does not have to generate any online invoice from the GST portal, but on the invoice made in a standard format, by extracting and entering an Invoice REFERENCE NUMBER (IRN) from the E-INVOICE portal.

 The IRN is different from the invoice number. Once the IRN is generated, its data will automatically go into the e-way bill portal and also in the GSTR-1 database. Apart from this, the government has also made a provision to show the QR code. You can generate e-invoice from any of your accounting software. In order to generate e-invoice, the merchant has to register on the IRP portal. This applies to B2B and B2G transactions Will happen. 

This rule will not apply to B2C transactions. Along with this, the government has kept transporters, government departments, banks, insurance companies, financial institutions, passenger transport operators etc. out of this provision. For the convenience of the traders, the government has also arranged for offline utility, API GENERATION and GSP. Apart from this an e-invoice SCHEMA GST INV-01 has also been generated. The main purpose of this provision is to check fake bills and prevent tax evasion. 

The provision of e-invoicing is mentioned in Rule 48(4) and 48(5) of GST. There is also a provision for API generation and GSP. Apart from this an e-invoice SCHEMA GST INV-01 has also been generated. The main purpose of this provision is to check fake bills and prevent tax evasion. The provision of e-invoicing has been mentioned in Rule 48(4) and 48(5) of GST. There is also a provision for API generation and GSP. Apart from this an e-invoice SCHEMA GST INV-01 has also been generated. The main purpose of this provision is to check fake bills and prevent tax evasion. The provision of e-invoicing is mentioned in Rule 48(4) and 48(5) of GST.

3. Changes in the rules for filing returns :

GST returns were the subject of discussion from the very beginning. First of all, the government provided three return forms – GSTR-1, GSTR-2 and GSTR-3B. After few months only two returns were kept – GSTR-1 & GSTR-3B. Now that all was going well, the government last year announced the introduction of three new return forms – Sahaj, Sugam and Saral. Publicity was also started in this regard and training programs were also organized. Suddenly the government changed its mind again and decided not to implement these three new forms. Now once again the government has come up with a whole new scheme of returns filing which has been brought for the convenience of small and medium traders. The name of this scheme is -QRMPS ( QUARTERLY RETURN MONTHLY PAYMENT SCHEME).

New scheme for traders with annual turnover up to 5 crores :

This provision will be applicable to all those taxpayers whose total annual turnover for the previous year is up to 5 crores. This scheme will not be applicable to those taxpayers who are in taxpayer composition scheme, any government department, ISD, non-resident taxable person. With this scheme, the government intends to reduce the pressure of tax compliance on small traders. The main points of this scheme are as follows:

• This scheme is completely optional. Whether the trader accepts it or continues to file returns according to the old system.
• To take advantage of this scheme, the trader will have to go to the GST portal and choose its option, as a result of which he will have to file returns under the same scheme for the whole year, unless he opts for any other option.
• On the day the taxpayer wants to come under this scheme, he will have to file all the returns (which have become DUE) till that day.
• The facility of this scheme will be available GST number wise. This means that if someone has more than one registration, then that taxpayer can take the QRMPS scheme in one registration as per his convenience and may not take it in the other.
• If the turnover of the trader crosses 5 crores during the current year, then he will have to exit from this scheme.
• The government has also fixed a quarter-wise time limit to get the benefit of this scheme from the year 2024-22, under which this option will have to be chosen.
• Under this scheme, the trader will have to pay the tax for the first and second month of every quarter either by a prescribed amount which will be 35% of the tax paid of the previous quarter ( FOR QUARTERLY 3B FILERS) / of the tax paid of the previous month. 100% (FOR MONTHLY 3B FILERS AS DEEMED BY PORTAL ). This is FIXED SUM METHOD which will be applicable only on Completed TAX PERIOD. Along with this, another option has been given of SELF ASSESSMENT TAX, in which the actual tax payable every month will have to be paid which will be calculated keeping in mind the inputs shown in GSTR-2B.
• Form PMT-06 has been mentioned for payment of tax, from which tax has to be paid within the next 25th of every month. Also, once the tax has been paid, the amount cannot be refunded nor can it be adjusted against any other liability. This CASH will remain lying in the LEDGER till the return of that quarter is filed.
• Arrangement has also been made for filing of NIL returns (GSTR-1 & 3B) through SMS for quarterly filers.
• The quarterly return filing date is 24th of GSTR-3B for the state of Assam and 13th of GSTR-1, which will be the first month of the next quarter. In addition, IFF (INVOICE FURNISHING FACILITY) has also been introduced under which quarterly filers will be able to upload their sales invoices regularly on the GST portal. For this a limit of up to Rs 50 lakh per month has been kept.
• Taxpayers covered under QRMP will not be able to file their GSTR-1 and will also not be able to use IFF if GSTR-3B of the previous period is not filed.
• Late fee will also have to be paid under the QRMP scheme if GSTR-1 and GSTR-3B are not filed on time. However, late fee will not have to be paid for filling PMT-06 late.

Changes for merchants with annual turnover of more than 5 crores :

The government has brought a new rule 59 (5), under which it has been told that if a taxpayer has not filed GSTR-3B returns for the last 2 months, then now he will not be able to file GSTR-1 either. With this rule, the government has now linked GSTR-3B with GSTR-1, which is a very good step towards preventing tax evasion. This rule will also be applicable to all those taxpayers who are covered under rule 89(5).

4. E – Vebil ( E -WAY BILL) changes in provisions:

E – Vebil validity (VALIDITY) lowered –

The provision of e-waybill in GST starts from Rule 138. Under Rule 138(10) the validity of e-waybill is given for 1 day for distance up to 100 kms. But now in the new year, the government wants you to double your speed. Now by amending this rule, the validity of e-waybill will be for only 1 day at a distance of 200 km. Let us try to understand it with an example. Suppose a goods road from Guwahati leaves for Agartala which is about 550 kms from Guwahati. In such a situation, according to the old rule, the validity of e-waybill used to be 6 days, but now according to the amended rule, it will be reduced to just 3 days. 

This means that in any case the goods should reach their destination with the validity of the e-waybill. If the goods are not able to reach Agartala for any reason during the validity of the e-waybill, then the transporters will have to re-extend the validity of the e-waybill, which is likely to expire. Possible only 4 hours before Avadhi or within 4 hours after. 

This simply means that now the transporters will also have to increase their speed and the goods will have to reach the destination in time, otherwise there will be a hassle of increasing the validity of e-waybill once again. However, the purpose behind bringing this provision of the government must have been to prevent tax evasion. But the government should also keep in mind that in the remote hilly areas of the Northeast, the validity period of only one day is going to be greatly reduced after every 200 km. The 200 km journey of a cargo truck in just one day is looking quite difficult and challenging in the hilly areas. Due to this, the traders are going to face some problems. Once again there will be the hassle of extending the validity of e-waybill. 

However, the purpose behind bringing this provision of the government must have been to prevent tax evasion. But the government should also keep in mind that in the remote hilly areas of the Northeast, the validity period of only one day is going to be greatly reduced after every 200 km. The 200 km journey of a cargo truck in just one day is looking quite difficult and challenging in the hilly areas. Due to this, the traders are going to face some problems. 

Once again there will be the hassle of extending the validity of e-waybill. However, the purpose behind bringing this provision of the government must have been to prevent tax evasion. But the government should also keep in mind that in the remote hilly areas of the Northeast, the validity period of only one day is going to be greatly reduced after every 200 km. 

The 200 km journey of a cargo truck in just one day is looking quite difficult and challenging in the hilly areas. Due to this, the traders are going to face some problems. Looks difficult and challenging. Due to this, the traders are going to face some problems. Looks difficult and challenging. Due to this, the traders are going to face some problems.

E – Vebil intercept ( BLOCKAGE) was extended –

The provision of e-waybill blockage has been given in the rule 138E of GST, under which if the taxpayer does not file the return for 2 consecutive months, then he is not able to generate the e-waybill. Many organizations also raised their voice regarding this rule. But the government, while not taking any laxity in this rule, has now expanded its scope. Now e-waybill can also be blocked due to the following reasons:

• If the application for cancellation of registration has been filed by the taxpayer, then registration DEEMED TO BE SUSPENDED will be considered and e-waybill will also be blocked.
• If the tax officer has any reason to believe that the registration is liable to be cancelled, the e-waybill will also be blocked.
• The e-waybill will be blocked if the tax officer finds a huge difference between the returns GSTR-1 and GSTR-3B or there is a huge difference between the GSTR-3B and 2A/2B in the input credit.

The purpose behind bringing this provision seems to be that once the registration is canceled, the taxpayer will not be able to do any supply transactions during that period and the e-waybill should also be blocked.

5. Changes in the rules of GST registration:

New Registration (New Registration) –

The easiest, simple and non-useful topic in GST so far is that of GST registration. Registration certificate can be obtained in just 3 days without paying any fee. This easy and simple registration route was heavily exploited by tax evaders and committed tax evasion by taking fake registrations. Now the government has realized very well that if proper investigation and investigation is done at the time of giving registration, then to some extent fraud can be prevented. Keeping this in view, the government had recently implemented Aadhaar authentication and also ordered field verification. Now the government has once again tightened the rules of registration and made these changes:

• The time limit for giving registration has been increased from 3 days to 7 days. Also, this time limit has been increased from 7 days to 30 days in situations where the applicant has not done Aadhaar verification or Aadhaar verification has failed or the department wants to do physical verification.
• If the applicant has taken the option of Aadhaar verification, then now Biometric Based Aadhar Authentication will be done as well as photo will also be taken.
• Now Biometric Information, Photo and KYC documents will be verified if the applicant has not opted for Aadhaar Verification. Also, the verification of all the documents which have been given for registration will also be checked in one of the nominated Facilitation Center and only after that registration will be given.
• If any discrepancy is noticed in the application for registration, the tax officer will now issue notice in the form GST REG-03 within 7 days instead of 3 days.

For Cancellation of Registration-

Some reasons for cancellation of registration are given in Rule 21 of GST. Now from January 1, the government has expanded the scope of the provisions of cancellation of registration by adding some more new reasons to these reasons and has given some more new weapons in the hands of tax officers. Now the registration can also be canceled in the following circumstances:

• If the registered taxpayer generates an invoice without supplying goods or providing services in violation of the rules, then the registration will be cancelled. Earlier this rule was only on supply of goods but now it has been implemented in services also.
• The input tax credit availed by the taxpayer is in contravention of section 16.
• The turnover shown in GSTR-1 is more than the turnover in GSTR-3B in any one or more tax periods.
• Rule 86B (1% tax to be paid in cash) is violated.

However, the government has clarified that if there is any mistake or inadvertent mistake in any return due to which there is a difference in GSTR-1 and 3B, then in that case the registration will not be cancelled.

For cancellation of registration (Registration Suspension)-

A provision has been given to suspend the registration in rule 21A of GST. Now by amending this provision, the government has given the authority to terminate the registration in the following circumstances also to the tax officer:

• Where the tax officer has any reason to believe that the registration of the taxpayer should be canceled under section 29, he may now suspend the registration without further hearing .
• Where there is a gap between GSTR-1 and GSTR-3B or there is a huge difference between GSTR-3B and GSTR-2A/2B in the input claim, the tax officer has any doubts, now he powers to cancel the registration. have been given.

When the registration is canceled, in such a situation the taxpayer will not be able to do any kind of transaction now. He will also not have to file any return during the period of simultaneous dismissal. Once the trial of the case is completed and the tax officer is satisfied, the sacked registration will be restored.

Conclusion (CONCLUSION) :

After reading the newly introduced rules, it seems that now the government has completely made up its mind that tax evaders and fraudsters should not be booked under any circumstances. Input tax credit and refund in GST were two such places where there has been a lot of fraud. This time the government has made such rules from registration to input tax credit that now the path of tax evaders will not be easy. 

The government had made strict rules by tightening the provisions of penalty long back. In such a situation, it becomes the responsibility of all of us to follow the steps taken by the government and prevent tax evasion and fraud at any cost. However, some of the rules do not seem really practical and taxpayers may face real difficulty. Now it remains to be seen whether the government gives priority to the convenience of the taxpayers or to prevent tax evasion. The answer to this question is hidden in the womb of the future, but one thing is for sure, the government is now in the mood to take some kind of laxity.

Disclaimer – The above discussion is only for education purpose and author will not be held responsible in case of any damages, loss due to reliance on above.