Business Desk, ETV Bharat: The 1 January 2021 not just mark the beginning of a new year, but would also bring along a host of new rules and changes that are coming into effect for both the common man and businesses alike.
Here’s a list of some of such key important changes that may have a direct impact on your financial dealings:
Mandatory FASTag
To put an end to long queues at the toll plazas, the government has made the use of FASTag mandatory for vehicles passing through national highways from 1 January.
FASTag has become mandatory for M and N categories of vehicles sold before 01 December 2017.
While category ‘M’ stands for a motor vehicle with at least four wheels used for carrying passengers, category ‘N’ stands for a motor vehicle with at least four wheels used for carrying goods, which may also carry persons in addition to goods.
However, the government on 31 December 2020 announced that at hybrid lanes fee payment can be made through FASTag as well as in cash mode till 15th February, 2021.
FASTag is essentially a sticker or a tag that is pasted on the windscreen of the vehicle. When the vehicle passes through the toll plaza, there will be a FASTag reader installed there that will read into the sticker and then deduct the required toll amount from a bank account or a prepaid walled linked to the FASTag.
The government has partnered with several agencies including banks and e-commerce channels to sell FASTag. Vehicle owners can reach out to any of the major banks like HDFC Bank, ICICI Bank, State Bank of India, Kotak Bank, Axis Bank, etc in which they hold a bank account to get a FASTag.
Banks, in turn, are allowed to charge up to Rs 200 for issuing the tag including all taxes. A security deposit, usually around Rs 200 for most cars (it depends on the vehicle type) is also charged. Then there is a minimum recharge amount, usually Rs 100, to keep the tag active.
Contactless card payment limit increased to Rs 5,000
In order to expand the adoption of digital payments, the Reserve Bank of India (RBI) has enhanced the limit of contactless card transactions from the current Rs 2,000 to Rs 5,000 from 1 January 2021.
Contactless payment allows users to simply tap their card at the contactless payment card machine or keep it close to the machine rather than inserting or swiping it there to make payments. It is called contactless because the card stays in your hand the whole time.
Till now, transactions under Rs 2,000 did not need a signature or PIN. One just needed to tap to pay. This made the whole process completely contactless, which was quite useful in times of a pandemic. Now, RBI has raised this cap to Rs 5,000, which means that only transactions above Rs 5,000 would need a signature or PIN.
Positive Pay for cheques
In order to make cheque payments more secure, RBI has introduced the ‘Positive Pay’ mechanism for cheques of value of Rs 50,000 and above.
Positive Pay involves a process of reconfirming key details of large-value cheques before clearing them in order to prevent fraudulent activities.
Under this process, the issuer of the cheque, whether a company or an individual, submits certain details of the cheque like date, name of the beneficiary/payee, amount, etc. to the drawee bank.
When the cheque is presented for clearing, the Cheque Truncation System (CTS) then cross-checks its details with those submitted by the issuer. Only if the details match, the cheque is cleared.
RBI has cleared that the Positive Pay facility is currently optional but it might be made mandatory for cheques of Rs 5 lakh and above.
Passenger vehicle prices to go up
Major car makers have announced that they will hike prices of their product line-up with effect from 1 January in order to pass on the rise in input costs to customers.
Companies like Maruti Suzuki, Hyundai, Honda, Renualt, Kia, MG and Mahindra and Mahindra Ltd are some of the major names that have announced price hikes for their models.
Many car makers, including Maruti and Hyundai, have not announced the exact quantum of the price hike yet. One would have to wait for 1 January to know the exact list of prices.
Others like MG said that their SUV prices will go up by 3%, while BMW said prices of its Mini cars will be raised by up to 4%.
No monthly GST returns for those with less than Rs 5 crore annual turnover
From 1 January 2021, the taxpayers whose annual turnover is less than Rs 5 crore will not be required to file monthly returns i.e. GSTR 3B and GSTR1. Rather, they will only file quarterly returns.
With this move, the number of returns to be filed by such firms will reduce to 8 from the earlier 24.
However, such taxpayers will make GST payments through challan every month either by self-assessment of monthly liability or 35% of net cash liability of the previous filed GSTR-3B of the quarter.
Other than this, refunds will be given only in bank accounts which are validated with PAN and Aadhaar details from 1 January.
