Overview of Union Budget 2021 Highlight

www.carajput.com; BUDGET 2021

Seven Powerful provisions in Budget 2021 that will start changing the existing business processes!

This statement is appropriate to what we experienced in the budget of the Union unveiled by the Minister of Finance. Changes in tax legislation, as released by the Govt, will surely make the lives of business people and business partners difficult, to say the least!

Do you ever wonder that the Government plans to streamline, standardize and lower failure rate in the corporate world?

I’m sure you’ll think otherwise after reading these changes. Without any further action, let us comprehend the most stringent provisions laid down in Budget 2021.


www.carajput.com; BUDGET 2021
  1. Property Attachment (Sec. 83)

It was implemented in Section 281B of the Income Tax and Section 83(1) of the CGST that, in case scenarios of tax evasion on the basis of false bills, non-existent vendors, circular trading, etc., the tax officer now has the power to attach the assets of the company, including the bank account.

In addition, the officer may also provisionally attach the assets and bank accounts of the company directors, partners, company secretary, employees, managers, CA, CS, CWA, associated auditors, advisors, and advocates, or any other person to whom the transaction is made.

It is important because the dept is involved in decision-making based on inference and not on scientific proof. A further option for a subjective hearing is given following the issuance of the Order of Attachment.

  • Is there any reason not to call this an anti-business law?
  • Do you think this is a step forward in promoting business ease?
  • Can you rationalize this law with any explanation?
  1. Name & Shame (Sec. 151 and 152 of the Rules)

Govt has suggested decreasing the time limit for opening the case in the Income Tax Department from Six years to three years (this does not apply to cases in which the accused tried to evade not more than INR 50 Lakhs in a year).

Around the same point of time, pursuant to GST Act confers powers U/s 151 of the CGST Act 2017 on the Commissioner or the Officer authorized by him to execute any person to provide data on any matter relating to this GST Act. There is no time limit for the exercise of those powers.

Not only that, but also that information may be published in the public domain if the Commissioner is of the view that such publication is beneficial in the public interest.

This will indirectly result in more cases, more disagreements, less time for businesses to represent themselves, so everything is based on 3rd parties papers.

www.carajput.com; BUDGET 2021
  1. Retrospective Amendment ( Sec. 7)

Under the Income Tax, only retired judges of the Supreme Court and the High Court of India were members of the Income Tax Authority.

The new proposals allow the Chief Commissioner Officers of the Dept to be members of the Advance Ruling Authority.

This will start raising pertinent questions about the honesty of this body while pronouncing judgments in different instances, as in the scenario of GST.

In addition, due to the proposed retroactive amendment to Section 7 of the CGST Act 2017, the honesty of the GST officer will also be a difficult task, as the Officer will primarily issue notices to the club or association to pay tax on the money collected from the member.

  1. Adverse consequences in the event of a postponement in the deposit of tax (Sec. 129 and 130)

As per the exercise regarding the proposed changes, each company had the option of deferring the employees’ PF with some delay. After the PF was deposited, a decrease in expenditure was permitted.

As per the suggested amendments, not only will you be limited to asking for a decrease in expenditure, but the late requests of PF will be allowed to treat as additional revenue.

That’s what you consider the Corporate Double Taxation.

Why are Business owners being penalized with additional taxes and a notice of recovery even in the event of inevitable situations of delaying the payment of the tax?

Correspondingly, in the case of GST, in the event that the carrier or owner fails to pay penalties within fifteen days of the issuance of MOV 6/MOV 7.

  1. Mismatch, in return, may result in recovery or cancellation. ( Sec. 75)

As per the suggested amendments, an error in measuring the excess tax under section 75 (12) of the GST will result in the Dept charging it as a self-assessment tax without issuing any evidence of tax notification.

Comparably, the tax officer may even cancel your registration if he/she finds a differentiation between GSTR 1 and GSTR 3B. You have no context for error and you will be penalized even if the error is influenced by external error.

Are we going to head towards a more simple tax system, or are we trying to make it much more complex?

We are considering this query after having read the proposed changes to the budget.

  1. Input Tax Credit will be allowed to use only if it is represented in GSTR 2A (Sec. 16)

ITC for Buyers will now only be readily accessible after the supplier has properly filed the return the same is reflected in its GSTR 2A.

This implies that the Vendor Tax Invoice is nothing other than a piece of paper.

This shows clearly the government’s intention, which only wants to allow Input Tax Credit in the case of matched and used invoices.

  1. Minor ignorance will cause big trouble & Expense. (Sec. 129)

This new proposal declares that, in instances of seizure of goods, the accused company must impose a penalty equal to 200 percent rather than 100 percent of the tax payable in the case of taxable goods.

As has been done, Business owners could receive the refund of taxes paid at such times after it has been proved that the taxes due have already been paid.

But small offenses such as the E-way bill that has expired are considered to be large (in the eyes of officials). Business owners are also penalized with fines for these crimes.

This is true even in cases where the seized truck has related documentation and no acknowledgment of the specific intent to avoid taxes. Now, experiencing this for Business owners is going to be as difficult as it can get in any situation!

That which we see from the Media Reality.

The Minister of Finance & Chief of the CBIC encourage ease of business in India at each and every conference we get to see.

The minister of finance talks about making the taxing process simpler, but in reality we can see that the government is making an effort to introduce strict provisions that will make life difficult for businesspeople.

If the minister of finance hesitated to mention these provisions in the budget speech, how can we not doubt the intentions of the govt?

Post Amendment for Annual Return and GSTR 9C and know about its impact

a. Annual returns on Form GSTR-9 / 9A will be voluntary for taxpayers with an annual turnover of less than Rs 2 crore;

b. Taxpayers with a yearly total turnover of more than Rs 5 crore will be required to provide a reconciliation statement in FORM GSTR-9C.

c. Instead of having the reconciliation statement (GSTR 9C) approved by Chartered Accountants / Cost Accountants, taxpayers would be able to self-certify it.

It will raise management accountability and responsibility because he will no longer be able to claim that a mistake occurred because he did not receive sufficient guidance. Self Certification, on the other hand, is just as troublesome as Self Medication

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