Important GST rule changes from January 1, 2022

1. Key changes in GST rules, Applicable from January 1st 2022

2. Key changes in GST rules, applicable from January 1st 2022 The Central Board of Indirect Taxes and Customs (CBIC) has introduced new changes on the Goods and Services Tax (GST). These changes will come to effect from 1st January, 2022. The industries which will be affected are the textile Industries, food delivery and transport aggregators. Both the Central and State governments are facing some revenue crunch at the moment; this change will help the central government, which is undergoing a revenue scarcity because of giving concession on fuel duty, by bringing in funds for other public welfare activities. Major changes which will take place from the 1st of January will be that the prices of footwear and textile excluding the cotton products are bound to increase as they will attract a rate of 12% GST from now onwards. These goods attracted 5% GST earlier. All types of footwear and all types of textile products, including readymade garments, will be charged 12% GST. Online Transport services shall also be affected as 5% GST will be levied on online transport aggregators like Ola and Uber, which have become an inseparable part of our lives. The government has stated that any Cab/Taxi service, if provided through an e-commerce platform would fall under this ambit and these rates shall be applicable to them. These rates will slightly bring down the passenger’s fare as it now creates a duty on the service provider to pay GST. Earlier 6% GST used to be charged for these rides however the passenger paid that. Food delivery; another key sector that will come under the ambit of new regulations, but it will be for delivery apps such as Swiggy and Zomato. However, this is merely a compliance change and won't put any extra burden on the consumers. The delivery platforms will now have to collect the GST from the restaurant services and deposit it from January 1st onwards. This step was taken as a discrepancy found in tax loss to the exchequer due to the underreporting by food aggregators of about Rs 2000 Crore. The government believes that holding these platforms directly accountable would curb the problem of tax evasion. The board also stated that Aadhaar authentication will be mandatory from the 1st of January 2022, for filing GST refund and GTR-1 facility will be blocked of the business that has not paid the tax and have filed GSTR-3B In the previous month. If a business fails to file GSTR-3B for the prior two months, then the business won't be allowed to file a return for GSTR-1 The GST laws have also been amended, which would give a GST officer authority to visit premises without any prior show-cause notice. Though these are limited to cases where taxes paid in GSTR- 3B is lower based on suppressed sales volume as compared to supply details of GSTR-1 this step is being taken to control the fake bills being created by the sellers who often show higher sales in GSTR-1 and suppress sales volume of GSTR-3B in order to reduce their GST Liability. Lastly, the new regulations have increased the ATM withdrawal charges as well. Currently, the transaction charges were being levied at Rs.20 per transaction, but from 1st January this will be charged at Rs.21 per transaction. The customers can withdraw 5 times from their own bank’s ATM and 3 times from other bank's ATM for free. Apart from these, other transactions will be charged. Ganesh Nair Legal Researcher, R&D Enterslice