Food aggregators like Swiggy and Zomato will have to collect and file tax at the 5% rate starting Saturday, a move that will broaden the tax base as food vendors who are currently outside the GST threshold will become subject to GST when provided through these online platforms. .
Currently, GST registered restaurants collect and deposit the tax.
In addition, taxi aggregators like Uber and Ola will need to collect 5% Goods and Services Tax (GST) for booking two- and three-wheel vehicles starting January 1. In addition, shoes, regardless of the price, will be taxed at 12% from Saturday.
These are among the many changes to the GST regime that came into effect in the new year 2022.
In addition, to combat evasion, the GST law has been amended to state that the input tax credit will now only be available once the credit appears in the GSTR 2B (purchase declaration) of the taxpayer. A five percent interim credit, previously allowed under GST rules, will no longer be allowed after January 1, 2022.
Bipin Sapra, tax partner of EY India, said that “this change will have an immediate impact on the working capital of taxpayers who currently benefit from a 105% credit of the matching credit. The change will also require the industry to validate that purchases are made from genuine and compliant suppliers.
Other anti-evasion measures that would come into effect from the new year include mandatory Aadhaar authentication to apply for GST refund, blocking the ability to file GSTR-1 in cases where the company has failed. no taxes paid and filed GSTR-3B within the previous month.
Currently, the law restricts the filing of declaration for outgoing supplies or GSTR-1 in the event that a company does not produce the GSTR-3B from the previous two months.
While companies file the GSTR-1 of a given month before the 11th day of the following month, the GSTR-3B, by which companies pay taxes, is deposited in installments between the 20th and 24th day of the following month. .
In addition, the GST law has been amended to allow GST officers to visit the premises to collect taxes due without notice of justification, in cases where taxes paid in GSTR-3B are lower depending on the volume of goods. suppressed sales, against the given supply details. in GSTR-1.
Sapra said that while the amendment is likely to curb abusive practices of passing the input tax credit by reporting in GSTR-1 without paying taxes in GSTR 3B, there are real differences in GSTR-1 and GSTR 3Bs, such as carrying unadjusted credit scores, are likely to face unnecessary review.
The move aims to reduce the threat of false invoicing where sellers will post higher sales in GSTR-1 to allow buyers to claim input tax credit (ITC), but report suppressed sales in GSTR-1. 3B to reduce GST liability.
Nexdigm (indirect tax) executive director Saket Patawari said that e-commerce operators are now required to pay GST in place of restaurants and the government’s tax base may increase due to the above as these operators will be subject to GST even for unregistered restaurants.
“E-commerce operators may be asked to register in each state where restaurants are located even if they are not present there and to comply with all GST rules even if they do not have no infrastructure in the state. It can become difficult to manage audits and investigations in all states, in particular. for start-ups and new E-com operators, ”added Patawari.
Sapra further stated that this amendment would also broaden the tax base, as food vendors who are currently outside the GST threshold will become subject to GST when supplied through these online platforms. Thus, purchases from these platforms are more expensive.
“Since restaurants sometimes provide goods at the same time as catering services, an invoice can involve multiple payments by several people and would therefore lead to complexity of the operations. This practice of placing a burden on e-commerce operators for supplies made through them places an additional burden on a platform that only facilitates the supply, ”Sapra added.