The new rule requires businesses with more than ₹50 lakh sales a month to pay 1% of their tax outgo in cash. Fraudsters chose products depending on the tax rates in such a way that they could trade fake invoices without any cash payment of tax involved, using bogus credits. When the exclusions to the rule are applied, the 1% tax payment in cash will apply only to about 40,000-45,000 taxpayers. "This would be around 0.37% of the total GST tax base of 12 million taxpayers," the official explained. The net requirement of cash payment will be only 0.12% of the turnover in such a case.

Source: Mint December 26, 2020 08:55 UTC