MSMEs need not fret about mandatory 1 percent cash GST payment rule

In a measure to curb tax evasion through fake invoicing the Central Board of indirect Taxes and Customs(CBIC) amended the GST rules yet again making it mandatory for businesses with monthly turnover of over Rs 50 lakh to pay at least 1 per cent of liable GST in cash.

According to the Finance Ministry, MSMEs, small dealers will not be impacted by the new rules, only the firms with annual turnover of more than 6 crore have to make compliance with the recent amendment.

Some dealers draw undue advantage of input tax credit by passing on fake invoive which show high turnovers, hence this provision will restrict the input tax credit for discharging GST liability of 99 per cent against fraudsters and would not affect any genuine business entities or ‘Ease of Doing Business’ in any manner.

The rule would apply only to risky or suspicious dealers, and genuine dealers would remain excluded.

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