<p>The Centre has ensured the new rule that makes it mandatory for companies with a monthly turnover of over Rs 50 lakh to pay at least 1% of their net Goods and Services Tax (GST) in cash does not impact small businesses, a finance ministry official said Saturday.</p>.<p>“Some apprehensions have been raised in social and print media that the measure introduced of the requirement of the mandatory cash payment will adversely affect small businesses and will increase their working capital requirement. However, the misconceptions are unfounded and will not affect genuine taxpayers,” the official said.</p>.<p>Out of 1.2 crore GST taxpayers, only about 4 lakh have the supply value greater than Rs 50 lakh. Only around 1.5 lakh out of them pay less than 1% tax in cash, the official said.</p>.<p>“Now, when the exclusions in the rule are applied, then around 1.05 lakh taxpayers get further excluded from this 1.5 lakh. Thus, the rule would apply only to approximately 40,000-45,000 taxpayers. This would be around 0.37% of the total GST tax base,” he added.</p>.<p>The Central Board of Indirect Taxes and Customs (CBIC) had earlier this week amended GST rules making it mandatory for businesses with a monthly turnover of over Rs 50 lakh to mandatorily pay at least 1% of their GST liability in cash.</p>.<p>The new rule restricts the use of input tax credit (ITC) for discharging GST liability to 99% effective January 1, 2021.</p>.<p>However, this restriction will not apply in cases where the managing director or any partner has paid more than Rs 1 lakh as income tax or the registered person has received a refund amount of more than Rs 1 lakh in the preceding financial year on account of an unutilised input tax credit.</p>
<p>The Centre has ensured the new rule that makes it mandatory for companies with a monthly turnover of over Rs 50 lakh to pay at least 1% of their net Goods and Services Tax (GST) in cash does not impact small businesses, a finance ministry official said Saturday.</p>.<p>“Some apprehensions have been raised in social and print media that the measure introduced of the requirement of the mandatory cash payment will adversely affect small businesses and will increase their working capital requirement. However, the misconceptions are unfounded and will not affect genuine taxpayers,” the official said.</p>.<p>Out of 1.2 crore GST taxpayers, only about 4 lakh have the supply value greater than Rs 50 lakh. Only around 1.5 lakh out of them pay less than 1% tax in cash, the official said.</p>.<p>“Now, when the exclusions in the rule are applied, then around 1.05 lakh taxpayers get further excluded from this 1.5 lakh. Thus, the rule would apply only to approximately 40,000-45,000 taxpayers. This would be around 0.37% of the total GST tax base,” he added.</p>.<p>The Central Board of Indirect Taxes and Customs (CBIC) had earlier this week amended GST rules making it mandatory for businesses with a monthly turnover of over Rs 50 lakh to mandatorily pay at least 1% of their GST liability in cash.</p>.<p>The new rule restricts the use of input tax credit (ITC) for discharging GST liability to 99% effective January 1, 2021.</p>.<p>However, this restriction will not apply in cases where the managing director or any partner has paid more than Rs 1 lakh as income tax or the registered person has received a refund amount of more than Rs 1 lakh in the preceding financial year on account of an unutilised input tax credit.</p>
