The Central Government has made some changes to the goods and services tax (GST) rules which will come into effect from January 1, 2020. The GST Council has approved cutting the input tax credit from 20% to 10% of eligible credit, provided that the invoices or debit notes are not reflected in filings.
Officers at the commissioner level are now allowed to bar debit of input tax credit, where fraudulent credit was being availed, for a period of one year. In the GST Council meeting held in December 18, 2019, the Council ratified a proposal with regards to these changes to counter fake invoicing and tax evasion.
The notification from the GST Council stated, “The commissioner having reasons to believe that credit of input tax has been fraudulently availed may not allow debit for discharge of any liability or for claim of any refund of any unutilised amount.”
Furthermore, the Government has warned that taxpayers that have not filed Form GSTR-1 for two months or two quarters shall have their e-way bill blocked. Late fee for entities furnishing outward supply details in Form GSTR-1 between December 19, 2019 and January 10, 2020, has been waived for the period between July 2017 – November 2019.