“The cash payment of 1% is to be calculated on the tax liability in a month and not the turnover of the month. The Central Board of Indirect Taxes and Customs (CBIC) recently introduced a change in the GST rules that restricted the use of ITC for discharging GST liability to 99%. One of the measures was a mandatory 1% GST payment by those who show unusually large turnovers. “Some apprehensions have been raised in social and print media that the measure introduced of the requirement of the mandatory cash payment will adversely affect small businesses and will increase their working capital requirement. He added the minimum cash payment system is being introduced to deter dummy businesses, which will come into effect from January 1.

Source: Hindustan Times December 26, 2020 09:08 UTC