Vendor Panel CAIT to FM Sitharaman: Transfer rule 86B to GST to ease compliance burden

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Financial Express - Business News, Stock Market News

CAIT stressed that any change to a tax law should be implemented from the beginning of the fiscal year, rather than changing it multiple times throughout the year.

Simple business transaction for MSMEs: In a communication to Finance Minister Nirmala Sitharaman, the traders association Confederation of All India Traders (CAIT) has turned its attention to postponing the implementation of Rule 86B in the GST, which requires companies to pay 1 percent tax on monthly sales of over charges Rs 50 lakh. Implementation is planned for January 1, 2021. Citing the increased compliance burden and the financial obligation of the traders, the panel also called on Sitharaman to extend the deadline for submitting the GST and income tax return from December 31, 2020 to March 31, 2021.

The Treasury Department announced the new order earlier this week to curb the circumvention through fake invoicing. The Central Board of Indirect Taxes and Customs (CBIC) added rule 86B to the GST rules, which limits the use of the input tax credit (ITC) for exemption from GST liability to 99 percent. “Given the current scenario in which domestic trade is severely disrupted due to the effects of Covid and traders are struggling to survive the business, it is highly recommended that the implementation of Rule 86B be postponed,” said CAIT National President BC Bhartia & General Secretary Praveen Khandelwal said in a joint statement.

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CAIT stressed that any change to a tax law should be implemented from the beginning of the fiscal year, rather than changing it multiple times throughout the year. “Since the entire tax system is computerized, it takes some time for the government portals to be updated, while traders, on the other hand, rely on software providers to accommodate the changes,” the association said. There had previously been “strong demand” for a Covid aid package for the Sitharaman trading community. CAIT had also launched a nationwide campaign to boycott Chinese goods across the country to motivate traders not only to avoid Chinese products but also to urge Indian consumers to buy local products instead of Chinese goods.

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