NEW DELHI : Export turnover is exempt from a new rule that prevents businesses from fully meeting their tax liability using tax credits, a finance ministry official clarified on Sunday. Besides export turnover, sale proceeds of items which are exempt from Goods and Services Tax (GST) is to be excluded while computing the ₹five million sales threshold for 1% cash tax payment, said the official. As per finance ministry estimates, this rule is expected to apply on about 40,000-45,000 tax payers. Also, from 1 January, the extent of tax credits that could be claimed by businesses where their vendors have not uploaded invoices, has been halved to 5% of their eligible tax credits. Fake input tax credit claim is the most common way of GST evasion, according to Rajesh Gupta, co-founder and director of Busy Infotech Pvt.

Source: Mint December 27, 2020 07:27 UTC