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GST rule change: GST rates, rules and other changes which come into effect from January 1

GST Rule change from January 1, 2022: A host of changes from GST law to ATM withdrawal charges will come into effect from January 1, 2022.

By: Express Web Desk | New Delhi |
Updated: December 29, 2021 1:12:56 pm
GST Rule Changes from January 1, 2022Goods and Services Tax New rules from January 1, 2022: From changes in GST rules and rates to ATM withrawal charges, here's what's changing from January 1, 2022. (Representative image, source: Pixabay)

The Goods and Services Tax (GST) will witness some key changes heading into the new year 2022. The government had earlier notified the revisions which will come into effect from January 1, 2022.

Some of these changes include a higher GST rate for apparel, textiles and footwear and online restaurant aggregators such as Swiggy and Zomato will also be liable to pay GST on the services provided through them.

Here are the key changes in GST that’ll come into effect from January 1:

Prices of garments, textiles and shoes to be hiked

From January 1, the prices of footwear and textile except cotton products will get higher as they will attract 12 per cent GST going forward. Earlier they used to attract 5 per cent GST. All footwear, irrespective of prices, will attract GST at 12 per cent while all textile products, except cotton, including readymade garments will have 12 per cent GST.

Online transport aggregators to come under GST ambit

While the passenger transport services provided by auto-rickshaw or taxi drivers through offline/manual mode would continue to be exempt, such services when provided through any online transport aggregator such as Ola and Uber would become taxable effective January 1, 2022, at a 5 per cent rate.

Food delivery platforms to come under GST

The procedural changes that would come into effect include online food delivery platforms such as Swiggy and Zomato, that will be made liable to collect and deposit GST on restaurant services supplied through them with effect from January 1. They would also be required to issue invoices in respect of such services.

There would be no extra tax burden on the end consumer as so far the restaurants were collecting and depositing GST to the government. Only, the compliance of deposit and invoice raising has now been shifted to food delivery platforms.

The move comes after government estimates showed that tax loss to the exchequer due to alleged underreporting by food delivery aggregators is Rs 2,000 over the past two years. Making these platforms liable for GST deposits would curb tax evasion.

Mandatory Aadhar authentication

The other anti-evasion measures which would come into effect from January 1 includes mandatory Aadhaar authentication for claiming GST refund, blocking of the facility of GSTR-1 filing in cases where the business has not paid taxes and filed GSTR-3B in the immediate previous month. Currently, the law restricts the filing of return for outward supplies or GSTR-1 in case a business fails to file GSTR-3B of the preceding two months.

While businesses file GSTR-1 of a particular month by the 11th day of the subsequent month, GSTR-3B, through which businesses pay taxes, is filed in a staggered manner between the 20th-24th day of the succeeding month.

GST officers can visit premises without issuing prior show-cause notice

The GST law has also been amended to allow GST officers to visit premises to recover tax dues without any prior show-cause notice, in cases where taxes paid in GSTR-3B is lower based on suppressed sales volume, as compared to supply details given in GSTR-1. The move would help curb the menace of fake billing whereby sellers would show higher sales in GSTR-1 to enable purchasers to claim input tax credit (ITC), but report suppressed sales in GSTR-3B to lower GST liability.

Apart from changes in GST rules, the banks will start levying higher charges for ATM withdrawals beyond their free transactions from January 1, 2022.

New ATM withdrawal charges

From January 1, ATM withdrawal beyond the free transaction limit is going to be levied at Rs 21 per transaction, instead of Rs 20. This will be levied only if customers exceed the monthly limit of free transactions.

Customers are eligible for five free ATM transactions (cash and non-cash transactions) every month from their own bank’s ATMs. Separately, they are allowed to do three free transactions from other bank ATMs in metro centres and five in non-metro ATMs.

(with inputs from PTI)

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