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Arjuna (Fictional Character): Krishna, the eve of new year was celebrated with enthusiasm. What are the 20 major things to be kept in mind in this year 2020 by the taxpayer?

Krishna (Fictional Character): Arjuna, every new year comes with new hopes, new aspirations, new responsibilities and new challenges. 2020 is a leap year, to leap forward taxpayer needs to abide tax laws in business. Let’s discuss few trend setting tax reforms forth coming which will change the dynamics of business in India.

Arjuna: Krishna, What are major things of GST that taxpayer should keep in mind in this upcoming year?

Krishna :Arjuna, Taxpayers should keep the following things in mind of GST in this upcoming year:

1. E-invoice: New E-invoicing system is going to be implemented in GST which is mandatory from 1st April 2020 for taxpayers having an annual turnover exceeding Rs. 100 crore and then gradually to all B2B suppliers in future. A mechanism for the continuous upload of revenue invoices on a real-time basis.This is most remarkable change coming in Indian Book Keeping.

2. New IRP in GST: Invoice Registration Portal would be introduced this new year. IRP shall make an e-invoice of the invoices uploaded by the supplier. IRP shall send the e-invoice to the supplier and recipient. IRP shall send e-invoices data to GSTN portal

2020 goals with person using a laptop on a white table

3. New Return: New simplified auto-mated GST returns would be implemented from 1st April 2020 for all taxpayers. This new returns system will increase compliance and reduce tax evasion to a larger extent.

4. Annexure 1 -and Annexure 2: Anx-1 of Outward Supplies and Anx-2 of Inward Supplies will be the future base for filing of all GST Returns, thus these 2 reports will be the key for future reports of GST which will replace GSTR 1 and GSTR-2A.

5. Restriction on claim of ITC: With effect from 01/01/2020, ITC in respect of invoices or debit notes that are not reflected in taxpayer’s FORM GSTR-2A shall be restricted to 10 per cent of the eligible ITC reflected in his FORM GSTR-2A. Earlier the restriction was 20%. A major change in ITC availlment.

6. E-way Bill and GSTR-1:From 11th January, 2020 non-filing of GSTR-1 for two consecutive periods would block generation of E-way Bill. Thus, regular filing of GSTR-1 and GSTR-3B in year 2020 should go hand in hand.

7. Waiver of late fees for Non-filing of GSTR-1:If the taxpayer has failed to file GSTR-1 from July 2017 to November 2019, then the taxpayers can file such returns till 10 January, 2020 and the late fees for the same has been waived of. This will also affect GSTR-2A of the recipient to claim ITC.

8. GST Audit and Annual Return:The due date for filing GST Annual Return and Audit Report for F.Y. 2017-18 has been further extended to 31st January, 2020.The due date for filing GST Annual Return and Audit Report for F.Y 2018-19 has been extended to 31st March, 2020. For F.Y 2019-20 new format may be brought in because of inherent limitations in current forms.

9. DIN notices and E-scrutiny: Due to decline in collection of revenue from GST, large scale e-scrutiny and e-assessment notices with DIN for the returns from July 2017 may be taken up. It would be done in order to check significant deviations in returns.

10. GSTN Network is proposed to be re-engineered for more taxpayer-centric services like reminder of return filing, status of refund, ITC matches and mismatches, etc.

Arjuna: Krishna, what are the things of Income Tax to be kept in mind in this year 2020?

Krishna: Arjuna, following are the major things to be kept in mind in this year under Income Tax:

11. Online Assessment:The most significant change in 2020 under Income Tax will be the new online assessment which is a technology-driven and faceless assessment system across India.The proposed due date for e-assessment for F.Y. 2017-18 is 30th September, 2020. It effects to the tax authorities and taxpayers at large.

12. Last chance to file delayed returns of Income Tax for F.Y. 2018-19 upto 31st March 2020 with late fees of Rs. 10,000 from 01/01/2020.

13. The new domestic manufacturing companies can pay Income tax at the rate of 15%w.e.f. 1st April 2020. This is significant tax rate change having effect on Indian manufacturing sector in year 2020.

14. The old corporate taxpayers have been provided the option to pay tax at the rate of 22% but no benefit of deduction can be taken w.e.f. 1st April 2020.

15. The rates of personal Income Tax in case of individuals and HUF may be rationalized by reducing tax rates.

16. The deadline for linking PAN Card with Aadhar Card is extended till 31st March 2020.

17. The new ITR with self-filled details of Salary, TDS, etc are proposed for salaried employee which aims at simplified returns for assesse.

18. Person withdrawing a lump-sum corpus from NPS trust on closure or opting out of pension scheme was exempt from tax, if the person withdrew up to 40% of the amount. It is proposed to be extended to 60%.

Arjuna: Krishna, what are the things to be kept in mind in case of other tax laws in this year 2020?

Krishna: Arjuna, following are the things to be kept in mind in this year:

19. Under MVAT, dealers (Petrol pump, Liquor, PSI holder) having turnover exceeding Rs. 1 Crore needs to file MVAT Audit Report of F.Y 2018-19 till 28th February, 2020. For F.Y. 2019-20, the condition of tax liability exceeding Rs. 25,000 along with turnover exceeding Rs. 1 Crore has been inserted for applicability of MVAT Audit.

20. The last date for Sabka Sath Sabka Vishwas Legal Dispute Settlement Scheme, 2019 a scheme for settling pending disputes of service tax and central excise has been extended till January 15, 2020.

Arjuna: Krishna, what lesson one should learn from this?

Krishna: Arjuna, taxpayers have celebrated new year. But there are many hardships in form of compliance awaiting in this upcoming year. Let us hope taxpayers overcome all the hardships and have an amazing year ahead.

Author Bio

1. Central Council Member of ICAI. 2. Vice-Chairman of WIRC of ICAI for the period 2015-2021. 3. Youngest Chairman of Aurangabad Branch of WIRC of ICAI in 2002. 4. Author of Popular Tax articles series based on Krishna and Arjuna conversation i.e “KARNEETI” published in Lokmat on every View Full Profile

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June 2024