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Key GST changes to take effect from 1 October

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NEW DELHI: The central government has set 1 October as the date from which key legislative changes related to Goods and Services Tax (GST), introduced in the Finance Act earlier this year, will take effect, showed an official order.

The changes relate to giving extra time for filing claims regarding input tax credit and measures meant for further strengthening tax compliance.

Accordingly, the due date for availing input tax credit pertaining to the previous financial year has been extended from the due date of filing of GST return for September to 30 November.

Also, the due date of issuance of credit notes and declaration in the returns has been extended from 30 September to 30 November.

The changes also mean that input tax credit regarding an invoice can be availed only it has not been restricted as per an auto-drafted tax credit statement generated on the basis of the information furnished by the entity’s suppliers.

Also, GST registration may be cancelled where a registered person does not file the returns for a continuous tax period that would be prescribed instead of a continuous period of six months.

According to Rajat Mohan, partner at AMRG Associates, an accounting firm, old provisions related to the claim of tax credit have been substituted with new tax rules, which signal the overhauling of GST compliance in the near future.

Due date for rectification of errors in reporting details of sales has also been extended to 30 November. Also, GST returns regarding sales and monthly summary of transactions for a tax period cannot be filed if the same has not been filed for a previous tax period.

Saurabh Agarwal, Tax Partner, EY said that the order issued by the Central Board of Indirect Taxes and Customs (CBIC) extends the time limit for availing input tax credit, issuance of credit notes and rectification in GST returns relating to previous financial year from 30 September to 30 November.

These changes would be effective from 1 October.

Abhishek Jain, Partner, Indirect Tax at KPMG in India said that businesses should take note of this change and re-align their processes which currently consider 30 September as the deadline.

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