Food delivery giants such as Swiggy and Zomato will have to collect and deposit 5% tax from today. This is a step to widen the tax base with food vendors who are currently outside the GST arena will become liable to GST when provided through these platforms.
Notably, restaurants registered under GST are collecting and depositing the tax.
Besides, cab aggregators such as Ola and Uber will be required to collect 5% GST to book two and three-wheeler vehicles from January 1. Also, footwear from the various ranges will attract 12% tax from today.
Changes in the GST have been formulated from 2022 and the above-mentioned additions are some of them.
To tackle evasion, the GST law has been amended so that the input tax credit will be available only after the credit is appearing in GSTR 2B (purchase return) of the taxpayer. Besides, 5% provisional credit that was allowed in GST rules will not be permitted after January 1, 2022.
“This change will have an immediate impact on working capital of tax payers who are currently availing credit of 105% of matched credit. The change will also mandate industry to validate that the procurements are made from genuine and compliant vendors,” said EY India Tax Partner Bipin Sapra.
Another anti-evasion that could come into effect from this year is the authentication of Aadhaar for claiming GGST refund, blocking of the facility of GSTR-1 filing in cases where the business has not paid any tax, and filed GSTR-3B in the immediate previous month.
Besides, according to Sapra, the GST has been amended to stop the inappropriate practices of the passing of input tax credit while declaring in GSTR-1 without paying taxes in GSTR 3B. The major differences in GSTTR-1 and GSTR 3B of unadjusted credit notes might face unnecessary scrutiny.
Reportedly, e-commerce operators will be responsible for paying GST instead of the restaurants, and the tax base of the government may increase with these operators will be liable for GST even for unregistered restaurants. “E-com operators may be asked to obtain registration in each State where restaurants are located even if they don’t have presence and undertake all the regular GST compliances even if they don’t have any infrastructure in the State. It may become a challenge to handle audits and investigations in all the states esp. for start ups and new E-com operators,” said Saket Patawari, Nexdigm Executive Director (Indirect Tax).
Sapra stated that this step will make the procurement from these platforms costlier. “Given that restaurants sometimes supply goods along with restaurant services, an invoice may have multiple payments by multiple people and hence would involve complexity of operations. This practice of laying burden on E-Commerce operators for supplies made through them is putting additional burden on a platform which is just facilitating the supply,” he added.
