Ease of Doing Business for MSMEs: The Central Board of Indirect Taxes and Customs (CBIC) has introduced Rule 86B in GST that restricts the use of input tax credit (ITC) for discharging GST liability to 99 per cent.
Ease of Doing Business for MSMEs: Traders’ body Confederation of All India Traders (CAIT) in a communication to Finance Minister Nirmala Sitharaman has sought her attention towards deferring the implementation of Rule 86B in GST that levies a mandatory payment of 1 per cent tax for businesses on the monthly turnover of over Rs 50 lakh. The implementation is scheduled for January 1, 2021. Citing enhanced compliance burden and financial obligation for traders, the body also urged Sitharaman to extend the last date for filing GST and Income Tax Audit return from December 31, 2020, to March 31, 2021.
The Finance Ministry had notified the new order earlier this week to reportedly curb evasion by fake invoicing. The Central Board of Indirect Taxes and Customs (CBIC) has introduced Rule 86B in GST rules that restrict the use of input tax credit (ITC) for discharging GST liability to 99 per cent. “In the light of current scenario when the internal trade is highly disturbed due to repercussions of Covid and traders are fighting for the survival of the business, it is strongly urged that Rule 86B may please be deferred to be implemented,” CAIT National President B C Bhartia & Secretary General Praveen Khandelwal said in a joint statement.
CAIT stressed that any amendment in any tax law should be implemented from the beginning of the fiscal year instead of amending multiple times during the year. “Since the entire taxation system is computerised, it takes time for the government portals to update whereas on the other hand traders have to depend upon software providers to include the amendments,” the association said. It had earlier made a “strong demand” to provide a Covid relief package for the trading community with Sitharaman. CAIT had also launched a nationwide campaign to boycott Chinese goods across the country amid border tensions between India and China to motivate traders to not only avoid Chinese products but also urge Indian consumers to buy indigenous products in place of Chinese goods.