Why are we submitting a GSTR 3B

New rule for companies with more than 50 lakh rupees per month

The Treasury Department has stated that companies with monthly sales greater than Rs 50 lakh must pay at least one percent of the Goods and Services Tax (GST) in cash.

The new GST rule will come into force on January 1, 2021
CBIC has added rule 86B to the GST rules, which will come into effect on January 1, 2021. This rule only allows up to 99 percent of the input tax credit (ITC) to be used to settle GST liability. CBIC has stated that if the value of taxable supplies exceeds Rs 50 lakh in one month, no registered person can use the amount available in the electronic loan book to pay a tax liability greater than 99 percent. Products exempt from GST or deliveries with zero rate are not taken into account when calculating the business limit.

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However, if the director of the company or a partner has paid income tax of more than one lakh rupee or the registered person has received a refund of more than one lakh rupee on the input tax credit not used in the previous fiscal year, then this is the case does not apply. That being said, by changing the GST rules, the CBIC has restricted submission of external delivery details in GSTR-1 for those companies that have not paid for the pre-tax period by submitting GSTR 3B. The e-way invoice is still blocked because GSTR 3B was not submitted. If we don't do this now, GSTR-1 will also stop.

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365 people were arrested for registering 12,000 cases of pre-tax credit fraud
Finance Minister Nirmala Sitharaman tweeted that the government issued this notice based on the recommendations of the GST Council Legal Committee to prevent fraudulent GST invoices. This bans those who take ITC incorrectly. CBIC said it has arrested 365 people to date by registering 12,000 pre-tax credit fraud cases. Only 165 such people have been arrested in the past six weeks. EY's tax partner Abhishek Jain said the government had capped payment of the tax liability to 99 percent through a pre-tax credit for the taxable business of more than Rs 50 lakhs per month. Jain said, "The goal of this move is to prevent companies from abusing ITC through fake invoices."