Tax demand higher than GSTR 2B will shut down the business

- Sales Tax - Soham Mashruwala

Under the GST Act, the government has to make frequent amendments regarding the taxation. As per Section 16 and Rule 36(4), the trader is not entitled to claim more tax credit than that shown in GSTR 2B. It often happens that the supply of goods is received in the month after the month in which the bill is generated, due to which the tax is charged in the month after the month in which the bill appears in GSTR2B. The government has announced a new rule Ect to increase the headache of traders and levy exorbitant taxes which is discussed in today's article.

On 4th August 2023, the Government issued notification no. 38/2023 Central Tax has been promulgated in which this new rule 88D has been inserted.

Increase in tax demand

According to Article 16 and Rule 36, the government has established that tax credit cannot be claimed more than the amount shown in the GSTR2B form. The government had to bring the concept of transaction matching in the GSTR2B form. Couldn't even bring in the papers and dealt a definite blow to the trader in the form of GSTR2B form. Even if the person has made a mistake and the tax credit is pending and he claims the tax credit within the time limit as per the provision of section 16, rule 88D is to be waived in such a case.

Rule 88D

As per sub-rule (1) of rule 88D, in case a registered person has claimed more tax credit through GSTR3B form than GSTR2B form and the amount is more than determined by GST Council, such person shall be informed electronically in Part A of Model GST DRC-OIC form. . Within seven days of receipt of such notice, if the amount is to be paid, the registered person has to file the amount with interest in Form GSTDRCO3 within seven days or in Part "B" of Form GSTDRC-01C in the particular account and reply with the document within seven days Sub-Rule According to (3), if the registered person does not pay this amount or does not give an answer or in case the answer is not found appropriate, the officer can take action against him under section 73 or section 74. Following this, Rule 59(6) has been amended.

Amendment of rule 59(6).

A new clause '(e)' has been added under sub-rule (6) of rule 59 as per which a person who has been issued a notice under rule 88D and the settlement of which is pending shall not be allowed to generate e-invoice and also not be allowed to file GSTR1 form. It is a very strict provision and the account should be misused.