New rules likely to sign up for GST; Know how they would impact businesses!
A panel of officials attached to the GST (Goods and Services Tax) Council has proposed an overhaul of the GST registration process and suspension of the registration of businesses identified as risky. The proposals are among the set of proposals before the GST Council
A panel of officials attached to the GST (Goods and Services Tax) Council has proposed an overhaul of the GST registration process and suspension of the registration of businesses identified as risky. The proposals are among the set of proposals before the GST Council.
The proposals have been made by the law committee of the GST Council which comprises of central and state officials who advise their ministerial members. The aim is to tighten the compliance measures and target restrictions on firms identified as risky, without affecting the ease of doing business in general, a Mint report said quoting a finance ministry official.
Some of the recommendations include the use of Aadhaar or Aadhaar-like biometric identification for new registrations, steps to identify businesses that pose a risk of revenue loss to the exchequer, use of income tax returns to verify the credentials of entrepreneurs seeking GST registration, and restriction on using tax credits from the purchase of raw materials to meet the final tax liability.
Among the steps proposed, companies not filing GST returns for six months could cost a business its registration. As per this report, there are 600,000 dormant GST-registered firms among the 12 million entities with registration.
Entities seeking GST registration would be profiled based-on their credentials and classified into ‘trustworthy’ and others.
Trustworthy entrepreneurs are those who have a credible income tax payment history and have their identity authenticated by Aadhaar and have no history of having their GST registration cancelled.
The entrepreneurs who fall under the category of trustworthy are likely to get GST registration within a week. The others will be given the registration within two months of physical verification of business premises, the report said citing the ministry official.
Those that are not trustworthy may also be asked to pay a part of their tax liability in cash instead of adjusting it fully against the tax credit available to them, the report further said.
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The proposals put together by the law panel at a meeting held last week will be further discussed before they are placed before the council, this official said, requesting anonymity.
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