New GST regulations for 2024: what businesses need to know?

The government of India introduced one of the most significant tax reforms in the country. On 1 July 2017, the Goods and Services Tax?(GST) was introduced. It subsumes many indirect taxes the Centre and State impose, such as Excise duty, Value Added Tax, and Service tax. It is levied on both goods and services sold in the country.

GST has brought many positive changes for individuals and businesses in India:

1. GST has eliminated the cascading effect of tax.
2. It has brought a higher threshold for registration.
3. It has reduced the tax and compliance burden on many small businesses.
4. The process of GST registration is simple and online.
5. GST has mapped out the standard provisions applicable to the e-commerce sector across India.
6. It has also brought the unorganised sector under regulation.

In this article, we will review the recent amendments to GST rules for 2024 and practical steps businesses can take to stay compliant.

On 10 July 2024, the Central Board of Indirect Taxes and Customs (CBIC) issued GST Notification 12/2024, introducing a series of updates to the framework. These changes are introduced to ease the tax compliance process and increase precision, effectiveness, and openness.??

The introduction of?GSTR-1A allows taxpayers to make amendments or add any missing records within the same month after filing GSTR-1 or from the actual date of filing GSTR-1, whichever comes later. These changes can be made until the corresponding GSTR-3B filing for the same tax period. For quarterly taxpayers, GSTR-1A will be available after filing the quarterly GSTR-1 or its due date, whichever is later, until the filing of the corresponding GSTR-3B.

The introduction of GSTR-1A will also affect GSTR-2B. Transactions reported in GSTR-1A will be reflected in the recipient's GSTR-2B for the next month.

Taxpayers often encounter the challenge of managing negative liabilities from a previous tax period due to the non-allowance of a negative amount in?GSTR 3B. However, taxpayers can now auto-adjust the negative value in Table 3 of GSTR3B next month.

The new GSTR-1 form categorises interstate transactions with unregistered parties differently. Previously, such transactions were considered B2CL (Business to Consumer Large) only if the invoice value exceeded ?2.5 lakhs. Now, this threshold has been lowered to ?1 lakh. Any interstate supply to an unregistered player, where the invoice amount exceeds ?1 lakh, must be reported as B2CL. This is done to improve accuracy and ensure that significant transactions are correctly captured for tax purposes.

The new updates mandate Aadhaar authentication during the GST registration and compliance verification. This step ensures that the information provided during registration is accurate and genuine. Aadhaar-based verification will also minimise fraud and improve the credibility of the GST system. This measure will confirm the identity and address of the registered entities, enhancing the security and efficiency of the GST compliance framework.

The GST registration of a business would be cancelled if it violates the third or fourth proviso of Rule 23(1). The proviso states that if the taxpayer fails to furnish all returns due for the period from the effective date of the order of cancellation of registration till the date of the order of revocation of cancellation of registration within the specified time limit, the registration will stand cancelled.

The insertion of Rule 110 and Rule 111 allows the applicant to file a manual application to the Appellate Tribunal in FORM GST APL - 05/FORM GST APL-07 and the memorandum of cross-objections in FORM GST APL-06. It is only possible if the Registrar allows it by issuing a special or general order, subject to conditions and restrictions specified in the order. In such a case, a provisional acknowledgement shall be issued to the appellant immediately.

Here are how businesses can make sure that they follow the guidelines:

Ensure Timely Document Submission?

Businesses should ensure timely submission of all required documentation, including photographs, for applicants undergoing non-Aadhaar authentication. Additionally, documents must be verified at designated centres to prevent any delays in the registration process. At Lawgicalindia Business Developers Pvt. Ltd., we assist businesses in navigating these procedures, ensuring timely and accurate documentation to avoid any potential setbacks in registration.

File Returns and Rectify Mistakes Early:

With the introduction of GSTR-1A, businesses can amend errors or omissions in their outward supply filings. Taxpayers must ensure that the changes are reflected in GSTR-2B. This will help avoid penalties.

Monitor Interest Liabilities

As clarified under Rule 88B, in case of filing return delays, ensure that payments are credited to the e-cash ledger by the due date to avoid interest liabilities.?

Prepare for Audits and Refund Claims:?

Businesses involved in exports must maintain documentation on price revisions and submit refund applications within two years to claim IGST refunds under Rule 89.?

Follow Compliance Deadlines:?

Monitor the new compliance deadlines, such as for GSTR-4 filings and refund applications, regularly, as they have been revised to streamline tax processes.?

The implementation of the 2024 updates to the GST framework will bring significant changes in tax compliance, focusing on improving efficiency and accuracy. These revisions aim to streamline GST operations, reduce discrepancies, and ensure smoother compliance. For businesses, it’s essential to adhere to these updated guidelines to ensure accurate reporting and avoid potential issues, all while benefiting from a more efficient system. At Lawgicalindia Business Developers Pvt. Ltd., we help businesses stay informed and compliant, guiding them through these updates for seamless tax operations.