Paying 1% GST Liability Will Affect Less Than Half Assessees: Finance Ministry

0
53

With apprehensions being raised in social and print media about the requirement of a mandatory cash payment of at least one per cent of the Goods and Services Tax (GST) liability, the Finance Ministry on Saturday clarified that it will affect less than half of the total assesses. On the recommendations of the GST Law Committee, the Finance Ministry has mandated this rule to curb the menace of fake invoicing and fake firms/devious fly-by-night operators who avail and pass on input tax credit (ITC) wrongfully, said a government source. Some apprehensions have been raised in social and print media that the measure of the requirement of the mandatory cash payment will adversely affect small businesses and will increase their working capital requirement, said sources in the Revenue Department.

“However, the misconceptions about the measure taken are unfounded and will not affect genuine taxpayers.” Using data analytics, officials mentioned that out of the total GST base of 1.2 crore taxpayers, only around 4 lakh people have supply value greater than ₹ 50 lakh, and only around 1.5 lakh out of these 4 lakh pay less than 1 per cent tax in cash. Now, when the exclusions in the rule are applied, then around 1.05 lakh taxpayers are further excluded from this 1.50 lakh. Thus, the rule would apply only to approx 40,000 to 45,000 taxpayers, they claimed.

READ  Sensex, Nifty start on cautious note amid tepid global cues