Dear Patron,
Budget 2021 comes on the backdrop of an unprecedented widespread pandemic, which changed the economic landscape materially. The government tried to set a new direction for the economy, emphasizing creating opportunities for domestic business and industry, and an effort to be more ‘Atma Nirbhar’.
The proposed amendments under GST are intended mainly towards improving the taxpayer’s compliance behaviour that may also affect working capital. However, the retrospective amendment in the interest-related provision and doing away with the GST audit requirement are stepped in the right direction for the MSMEs. This will bring ease to MSMEs that are struggling with the requirement of audits under various Acts. However, we at Paksh Legal observe that the right way of easing the compliance burden would have been to keep the requirement of certification of reconciliation statement in Form GSTR-9C intact with doing away the requirement to ‘audit the accounts’ under section 35(5).
The Budget 2021 amends the GST law to achieve the objective of revenue augmentation, trade facilitation and rationalization measures wherein the law related to input tax credit has been made stringent; the need to do regular compliances has been made the heart and soul of GST, with the powers given to proper officer to proceed with initiation of recovery proceedings; to proceed to invoke provisional attachment of property and many more.
To take our insights on the proposed GST amendments in Budget 2021, kindly refer the attached presentation. In case you need to discuss anything, please feel free to contact us.