Finance Minister Nirmala Sitharaman has said biometric-based Aadhaar authentication will be rolled out all over the country for registration of applicants under GST in a phased manner. The move will help curb fraudulent input tax credit claims done through fake invoices.
Addressing the media on the recommendations of the GST Council meeting on Saturday, Sitharaman says a number of decisions to ease compliance have been taken in the meeting, while also pointing out that the discussions on GST rate rationalisation will begin in the next Council meeting. “Biometric-based Aadhaar authentication on an all-India basis is going to be rolled out. We have conducted a pilot run of the biometrics-based registration in Gujarat and Puducherry. Very good inputs are coming out of it. This will help us combat fraudulent input tax credit claims made through fake invoices. The GST Council today recommended rolling out the biometric-based Aadhaar authentication of registration of applicants on an all-India basis in a phased manner,” Sitharaman says on the decisions taken by the Council.
Sitharaman says the 53rd GST Council meeting has taken a lot of decisions on trade facilitation, and easing compliance burden to give relief to the taxpayers. “This will benefit the traders, MSMEs and taxpayers,” she says.
Going forward, the council has recommended waiving of interest and penalties for notices issued under section 73 of the CGST Act. “Items like cases not involving fraud, suppression, or misstatements are under section 73. For all those notices, which were issued under section 73 for the fiscal years 2017-18, 2018-19 and 2019-20, the Council has recommended waiving interest and penalties on the demand notices served. This will be applicable in the cases where the taxpayer pays the full amount of tax demanded in the notice by 31/03/2025. Notices were issued for those financial years under section 73 of the CGST Act. If the taxpayer comes forward to pay the total amount before 31 March 2025, he shall not have to pay interest or the penalties which have been normally put on them. So that relief has been given,” Sitharaman says.
The Council has also extended the due date for claiming the input tax credit for the period beginning from the launch of GST till FY20. “The Council has recommended that the time limit to avail input tax credit on any invoice or debit note under section 16(4) of the CGST Act through any GSTR 3B returns filed up to 30/11/2021 for the financial years 2017-18, 2018-19, 2019-20 and 2020-21 may be deemed to be 30/11/2021,” says Sitharaman. Experts say the move will boost ease of doing business.
“The amnesty in the form of the waiver of interest and penalties on sec 73 demand notices for FY 17-18, 18-19, and 19-20, provided the tax is fully paid by March 2025, is a pragmatic move that will relieve businesses of historical burdens and encourage timely compliance. Additionally, the extension of the time limit to avail of Input Tax Credit (ITC) under section 16(4) until November 30, for fiscal years up to March 2021, addresses a crucial compliance flexibility that many businesses have been advocating for. This is also in line with a ruling by the Kerala High Court,” says Mahesh Jaising, Partner, Deloitte India.
“This decision follows numerous notices and orders that were issued and subsequently challenged before various high courts, many of which were unfavourable to the assessees. With this extension, there is now an opportunity for these notices and orders to be quashed, thereby reducing the litigation burden on taxpayers. This provides much-needed relief, allowing taxpayers additional time to claim the ITC they are eligible in cases where returns were filed beyond the time limit prescribed u/s 16(4),” says Ankur Gupta, Practice Leader, (Indirect Tax), SW India.
“It is evident that the new government is moving ahead with importance to ease of doing business which includes recommendations like waiver of interest and penalty for notices issued under Section 73 for FY 2017-18 to FY 2019-20. This benefit can be taken by taxpayers accepting demand and willing to pay the contended tax,” says Smita Singh, Partner at S&A Law Offices.
Rate rationalisationThe GST rate rationalisation is one of the key issues the council has been working towards in the last two years. The FM says a GoM on rate rationalisation has been working since it was constituted. “Quite substantial work has happened. Now that there is a new chairman of the GoM, I want to give time to him and his team to review how much ground has been covered,” she says.
“The Council decided that when we meet for the next time, the Chair of the GoM should report to the Council the status of the work done so far and how much work is left to be done. In the next meeting, the discussion on the GST rate rationalisation will begin,” says Sitharaman.
