MAJOR CHANGES PROPOSED IN THE BUDGET 2021-22 (GST EDITION)

Today marks the 4th year of implementation of Goods and Services Tax (First implemented on July 1 2017) The Union Budget. There have been some major reforms in the tax system following its implementation. Refer to https://wordpress.com/post/eduindex.org/18254 for more detailed insight.

The Union Budget for financial year 2021-22 had been laid in Parliment on February 1 2021. To deal with Covid 19 induced lockdowns several mini budgets had been proposed last year. The PM said to refer this budget as an extension of previous mini-budgets.  Finance Minister Nirmala Sitharaman said that the Budget proposals for this financial year rest on six pillars — health and well-being, physical and financial capital and infrastructure, inclusive development for aspirational India, reinvigorating human capital, innovation and R&D, and ‘Minimum Government, Maximum Governance’. The budget was presented digitally for the first time by the first full time female Finance Minister of India, Nirmala Sitharaman. The budget made a statement that of all the structural reforms, the Goods and Services Tax has been the most iconic in our country. It has consolidated in itself several taxes and has been integrated the country economically.

The most effective gains were taken by the transport sectors. The abolition of check posts resulted in 20% efficiency of speed of delivery. There was a significant amount of increase in the tax filers as well. Significnt policy level changes have also been made. GST rate structure is also being directed to focus on issues like inverted duty stucture.

Let us take a look at some important changes in this session

• Scope of term Supply enhanced: under supply come all the transactions which take place. It comes under clause 99 of Finance Bill. A New Clause (aa) under Section 7 had been made as to ensure levy tax on activities or transactions involving supply if goods or services for cash payments. These changes came into effect from 1st July 2017.
• Input Tax Credit : New clause to sub section o of Section XVI of CGST act 2017 has been inserted to provide Input Tax Credit on invoice note. Invoice has been focused lot more in the new system of GST .
• Interest on net tax liability: Section 50 of CGST Act 2017 provides interest on delayed payment of tax. Financial bill 2021 proposed to change interest on cash liability thus interest to be paid only on the part of debiting electronic cash ledger and not in ITC portion
• GST Audit to be discontinued: The mandatory requirement of getting annual accounts audited in Section 35(5) and Section 44 on annual return is proposed to be substituted by a new section. There by removing the mandatory requirement of getting audited by specified professionals.
• Seizure and confiscation of goods in transit are to be separated in the proceeding of recovery of tax. Jurisdictional Commissioner has bee empowered to call for information from any person according to section 151 and 168.
• Restricted zero rated supply: Government will now notify the class of suppliers who can do zero rated supply on payment of IGST and the good will also be classified which the eligible zero rated suppliers can supply.