Notification 94/2020 released, ITC further restricted to 5%

As per GST Notification number, 94/2020-Central Tax, dated 22nd Dec 2020 here are some major change that will be applicable w.e.f. from 1st Jan 2021ITC

1. Under Rule 36 (4) shall be restricted to 5 per cent of eligible credits w.e.f January 2021 in respect of invoices or debit notes not furnished by the suppliers.

2. Registered person will not be able to file GSTR-1, If two or more GSTR-3B is pending.

3. New Rule 86B inserted which forces the taxpayer to mandatory pay at least 1% through cash ledger if monthly taxable supply exceeds 50 Lakhs.

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Twittrati and taxpayers raise questions on ease of doing business and simple tax compliances and said that the main reason GST was introduced to reduce the burden of tax compliances and to ease of doing business. Now that the essence is lost, they are creating more and more complications.

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