CBIC has issued Notification No. 01/2020 – Central Tax dated 1st January, 2020 which brings into force certain provisions of Finance (No. 2) Act, 2019 from 1st January, 2020.
Impact and highlights of the said notification are following:
All the following provisions shall came into force from 1 January 2020:
1. Composition levy (Section 10):
Taxable person opting to pay tax under the composition scheme shall be permitted to opt the said scheme irrespective of the value of interest income earned by way of extending deposits, loans or advances. Thereby, in the calculation of “aggregate turnover” said value of interest income would not be taken into consideration.
Casual taxable person and the non-resident taxable person will not be eligible to opt to pay tax under composition levy.
Supplier of services was permitted to avail the composition scheme w.e.f. 1st April, 2019. Now the said scheme has been enshrined in GST law w.e.f. 1st January 2020.
2. Registration (Section 22)
Government is empowered to extend the aggregate turnover limit of INR 20 Lakhs to such amount not exceeding INR 40 lakhs for suppliers engaged exclusively in the supply of goods. However, said supplier would be permitted to opt this extended threshold irrespective of interest income on deposits, loans or advances.
3. Procedure for Registration (Section 25)
Aadhaar number would now form the very genesis of GST registrations. Following are the amendments which have made Aadhaar mandatory under the GST law:
Every registered person shall authenticate its Aadhaar number. If an Aadhaar number is not assigned to any person, he shall be offered alternate and viable means for authentication.
On and from the date of notification, every individual shall undergo authentication of Aadhaar number.
On and from the date of notification, every person, other than individual shall undergo authentication of Aadhaar number of Karta, Managing Director, whole time director, such number of partners, members of managing committee of Association, Board of trustees, authorized representatives, authorized signatory.
4. Tax invoice (Section 31)
Government is now empowered under GST law to specify a class of persons who shall mandatorily implement specific modes of electronic payments for supply of goods or services or both.
5. Annual Return (Section 44)
Commissioner has been empowered to extend the time limit for furnishing of annual return for such class of registered persons as has been specified therein.
6. Payment of tax, interest, penalty and others (Section 49)
A registered person can transfer any amount of tax, penalty, interest, fee or any other amount in the electronic cash ledger to the electronic cash ledger for integrated tax, central tax, state tax.
7. Collection of Tax at Source (Section 52)
Commissioner has been empowered to extend the time limit for furnishing monthly statements (GSTR-8) and an annual statement for such class of registered persons as has been specified therein.
8. Anti-profiteering Measures (Section 171)
A registered person who is held guilty of profiteering would be liable to pay penalty equivalent to 10% of the amount profiteered. However, such penalty would not be applicable if the said profiteered amount is deposited within 30 days of passing the order.