• December 31, 2021

CBIC on November 18th announced the changes that are going to occur in the GST regime from the 1st of January, 2022. These changes are being implemented by the government to prevent tax evasion. 

             The changes are mostly procedural and hence are going to affect e-commerce businesses and food delivery service providers. It won’t impact the end consumers as the burden of GST will be on e-commerce platforms. 

What will be the changes in the GST regime?

  • 12% GST on apparel, footwear and textile products :

                     From 1st January 2022, products like apparel, footwear and textiles will attract 12% GST up from 5% earlier. Cotton products are an exception to this.

  • E-commerce transport services :

                       The transport cab or auto services like Ola/Uber which are provided through apps will attract 5% of GST. However, the transport services provided by the auto-rickshaw drivers offline will be exempted from this change. 

  • E-commerce Restaurant services : 

                        Apps like Swiggy or Zomato will be liable to collect and deposit GST on the restaurants they provide services to from 1st January 2022. It will be mandatory for the restaurants to provide invoices to these food aggregators. However, it’s been taken care of that this won’t affect customers at any end. 

  • Mandatory Aadhaar authentication : 

                        As an anti-evasion measure, the businesses will have to get their Aadhar cards authenticated for claiming the GST refund.  

  • Tax dues recovery without show-cause notice :

                          Officers will not require any prior show-cause notice to enter the premises to recover the tax dues from the 1st of January.

           The changes were decided to be made after realising the estimated tax loss of the amount of ₹20 crores due to under-reporting.