December, 2020 – Issue No. V


ITC restriction from 01.01.2021:

  1. Invoice details not uploaded by supplier – Only 5% of total ITC relating to such invoices can be availed.
  2. Taxpayers whose monthly value of supplies exceeds Rs.50 lakh should pay at least 1% of their GST liability in cash (ITC can used to discharge the remaining 99% liability). The following taxpayers are exempted from this restriction:
    • A person (on its own account or through its proprietor or karta or the managing director or any of its two partners, whole-time Directors, Members of Managing Committee of Associations or Board of Trustees) who has paid more than Rs.1 lakh as income tax in each of the last two FY.
    • Taxpayers who have received refund of more than Rs.1 lakh on account of exports or inverted duty structure.
    • Taxpayers who have paid more than 1% of their total GST liability in cash in the current FY.
    • Government departments, PSUs, local authorities, statutory bodies.

GST registration can be cancelled in the following additional cases:

  1. Violation of Section 16 regarding ITC availment.
  2. Violation of the new 1% cash liability rule.
  3. GSTR-1 liability is more than GSTR-3B liability for more than 1 month/quarter as the case may be.

GST registration can be suspended in the following additional case:

Major discrepancies found between the GSTR-3B vis-a-vis the GSTR-1 and GSTR-2B. No hearing opportunity will be granted for suspension. No refund would be granted during the suspension period.

Restriction in filing GSTR-1:

GSTR-1 cannot be filed if GSTR-3B has not been furnished for the preceding two months/ quarters as the case may be.

The following changes are notified for e-way bills:

  1. From 01.01.2021, for a distance of upto 200 kms, the e-way bill will be valid for a day from the relevant date. For every 200 kms thereafter, the validity will be additional one day.
  2. The non-furnishing of statement of outward supplies for any two months or quarters or suspension of GSTIN will lead to blocking of e-way bills.

Registration related changes:

  1. Aadhaar authentication to include biometric and photograph process.
  2. Non-aadhaar based registration application to include biometric, photographs and verification of KYC documents.
  3. Time limit increased to seven days for grant of registration or issuance of deficiency memo in case of aadhaar based registrations. For other cases, the time limit is 30 days.

Taxpayers in Ladakh:

Waiver of late fee for late filing of GSTR-4 in the FY 2019-20 for the period from 01.11.2020 to 31.12.2020.

Previous changes made vide Finance Act, 2020 given effect from 01.01.2021:

  • Eligibility criteria amended to reflect introduction of composition scheme for service providers.
  • Relevant date for availing ITC in the case of debit notes is the date of such debit note.
  • Condonable period with respect to revocation of cancellation applications extended.
  • Provision for allowing voluntary surrender of registration.
  • TDS Certificate in GSTR-7A to be issued.
  • Penalty to be imposed on beneficiary/recipient of fake invoice trading and related ITC availment.
  • Punishment for availing ITC without any bill or invoice.
  • Transfer of business assets for consideration to be considered as supply of service.

GSTN Portal facility:

A facility of ‘Communication Between Taxpayers’ has been provided on the GST Portal, for sending a notification by recipient (or supplier) taxpayers to their supplier (or recipient) taxpayers, regarding missing documents or any shortcomings in the documents or any other issue related to it. This facility is available to all registered persons, except those registered as TDS, TCS or NRTP.


Provisions for modifying PAN based IEC has been introduced.

Import of Copra under HS Code 1203 00 00 is allowed through MMTC; import of Coconut oil- under HS codes 1513 11 00 (Crude) and 1513 19 00 (Others) is allowed through STEs, except STC.

Chapter 84 and 85 of ITC (HS) 2017- Schedule-I Import Policy is amended to incorporate changes made in the Finance Act, 2020 dated 27th March, 2020.

Import of coal shall be subject to Coal Import Monitoring System (CIMS).

Medical Goggles and Nitrile/NBR Gloves – Free Exports.


MCA notifies 17 Provisions of Companies (Amendment) Act, 2020 with effect from 21.12.2020.

MCA amends FORM NO. SH-7 – Notice to Registrar of any alteration of share capital.

MCA introduces Rule 9A in the Companies (Incorporation) Rules, 2014 laying down the procedure for “Extension of reservation of name”.

Insolvency proceedings suspended for a further period of three months from 25.12.2020.
Draft Indian Ports Bill, 2020 issued for public consultation.

The Indian Tax Advisors