GST Council relaxes Compliance requirements for ITC-04: Entities having same PAN can Transfer Unutilized balance in CGST and IGST Cash Ledger

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The Goods and Services Tax (GST Council), in its 45th meeting has decided to relax the compliance requirements for the filing of ITC-04. As per the decision of the council, the return shall be filed once in six months by the taxpayers whose annual aggregate turnover in preceding financial year is above Rs. 5 crores. For the taxpayers whose annual aggregate turnover in preceding financial year is upto Rs. 5 crores shall file the return annually.

“Requirement of filing FORM GST ITC-04 under rule 45 (3) of the CGST Rules has been relaxed as under: a. Taxpayers whose annual aggregate turnover in preceding financial year is above Rs. 5 crores shall furnish ITC-04 once in six months; b. Taxpayers whose annual aggregate turnover in preceding financial year is upto Rs. 5 crores shall furnish ITC-04 annually,” the Government said in a press release.

Further, the GST Council also resolved the ambiguities in the charging of interest under section 50(3) of the CGST Act.

“In the spirit of earlier Council decision that interest is to be charged only in respect of net cash liability, section 50 (3) of the CGST Act to be amended retrospectively, w.e.f. 01.07.2017, to provide that interest is to be paid by a taxpayer on “ineligible ITC availed and utilized” and not on “ineligible ITC availed”. It has also been decided that interest in such cases should be charged on ineligible ITC availed and utilized at 18% w.e.f. 01.07.2017,” the Government said.

“Unutilized balance in CGST and IGST cash ledger may be allowed to be transferred between distinct persons (entities having same PAN but registered in different states), without going through the refund procedure, subject to certain safeguards,” it said.

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