Small businesses and dealers will not be affected by the new rule mandated to make at least 1 per cent GST payment in cash. The reason for this is that only those units whose annual turnover is 6 crores or more, have to follow this rule. Sources in the finance ministry have said this. In view of the increasing use of fake invoices for evasion of Goods and Services Tax (GST), the Central Board of Indirect Taxes and Customs (CBIC) added Rule 86B to the GST rules last week.
This rule allows up to 99 per cent of GST liability to be paid using input tax credit. Due to this, businesses with a monthly turnover of more than Rs 50 lakh will have to pay at least one percent of their GST liability in cash.
Sources say that the new rule will apply only to about 45000 taxpayers out of 1.2 crore GST taxpayers and this will not affect Genuine dealers and businesses. The new rule is going into effect from 1 January 2021. He further said that the new rule will curb the use of fake bills by fraudsters. This will only apply to risky or suspicious dealers who use fake credit on a large scale and do not pay any tax in cash. All small businesses, including MSMEs and composition dealers, are outside the purview of this rule.
