Impact on Service Providers with an amendment in GST Rule 62

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Impact on Service Providers due to amendment in GST Rule 62

Overview

To reduce the compliance burden and pay lower rates of taxes, small taxpayers were provided with an option to register for composition levy u/s 10.

Only a specified class of taxpayers (i.e. traders, manufacturers with certain exceptions, and restaurants) can register to pay tax under the composition levy provided all the conditions stipulated u/s 10 are satisfied.

In order to extend the benefit of paying tax at concessional rates, CBIC notified those small taxpayers who did not qualify u/s 10 could also avail the benefit of paying tax at a concessional rate of 6%,  if all the conditions stipulated in CGST(Rate) notification no. 2/2019 dated 07.03.2019 were satisfied.

Read here >> Composition scheme for service providers

Read here>> How service providers can avail the benefit of paying tax at concessional rates?

What was the benefit of paying tax as per CGST (Rate) Notification no. 2/2019 dated 7th November 2019?

The only benefit was a relative reduction in compliance burden for small taxpayers who were otherwise required to furnish the monthly returns.

In my opinion, very few small taxpayers would have availed the benefit of paying tax @ 6% [3% CGST + 3% SGST] which was to be borne by them from their pocket. They were required to issue the bill of supply and not the tax invoice.

Note: CGST Rule 62 was amended to exclude the above taxpayers from filing the returns prescribed vide a CGST Notification no. 82/2020 dated 10th November 2020.

Which forms are prescribed under CGST Rule 62?

CGST Rule 62 prescribes two types of return

Who can file returns and make payments as per CGST Rule 62?

There were two types of taxpayers who were permitted to furnish the return in Form GSTR 4 and make quarterly payments in GST CMP-08.

  • A taxpayer who has registered for composition levy u/s 10.
  • A taxpayer who was availing the benefit of paying tax as per CGST(Rate) Notification no. 02/2019 (Note 1) (Note 2)

Note 1: The benefit of return filing as per CGST Rule 62 has been withdrawn vide a CGST Notification no. 82 dated 10th Nov 2020.

Note 2: They may continue to pay tax @ 6 % but return filing will be the same as the regular taxpayer.

Which returns the taxpayers who were availing the benefit of paying tax as per notification 02/2019 had to file for the financial year 2020-21?

Period

Return
1st Apr 2020 – 30th Jun 2020

Form GST CMP 08

1st Jul 2020 – 30th Sep 2020

Form GST CMP 08
1st Oct 2020 – 10th Nov 2020

Form GST CMP 08

1st April 2020 to 10th Nov 2020

Form GSTR 4

11th Nov 2020 – 30th Nov 2020

Form GSTR 1 & Form GSTR 3B

1st Dec 2020 – 31st Dec 2020

Form GSTR 1 & Form GSTR 3B

Condition

If not opted for QRMP Scheme If opted for QRMP Scheme
1st Jan 2021 – 31st Jan 2021 Form GSTR 1 & Form GSTR 3B

Form GST PMT 06

1st Feb 2021 – 28th Feb 2021

Form GSTR 1 & Form GSTR 3B Form GST PMT 06

1st Mar 2021 – 31st Mar 2021

Form GSTR 1 & Form GSTR 3B

NA

1st Jan 2021- 31st Mar 2021 NA

Form GSTR 1 & Form GSTR 3B

11th Nov 2020-31st Mar 2021

Annual Return in Form GSTR 9

Note 3: Filing GST Annual Return in Form GSTR 9 was made optional for FY 17-18, FY 18-19 & FY 19-20 for the taxpayers whose annual aggregate turnover was up to Rs 2 Crores.

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About CA Ankita Khetan 161 Articles
Ankita is a Chartered Accountant in practice and holds a Diploma in IFRS (from ACCA, UK). She is also a Commerce PG and Certified Independent Director (from IICA). She holds a certification in Forex and Treasury Management. Her area of expertise is GST and Income tax. She is passionate about reading, writing, and sharing knowledge on areas related to finance and taxation.

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