Summary of GST Circulars Nos. 170/02/2022-GST to 176/08/2022-GST issued on 06-07-2022
In pursuance to 47th meeting of GST Council the Central Board of Indirect Taxes and Customs GST Policy Wing issue on 06-07-2022 seven circulars bearing nos. 170/02/2022-GST to 176/08/2022-GST for clarification of various issues of GST.
EXTRACT OF THE CIRCULARS
Circular No. 170/02/2022-GST dated 06-07-2022
Mandatory Furnishing of correct and proper information in return in Form GSTR-3B and statement in Form GSTR-1
Clarification in regard to inter-state supply made to unregistered persons, composition taxable persons and UIN holders
| Nature of Supply | Form GSTR-3B | Form GSTR-1 |
| Inter-State Supply to the unregistered persons | Report in Table 3.2 Place of Supply-Wise | Reporting Tables – 7B or Table 5 or Table 9/10 as the case may be |
| Supply to the Composition Taxable Persons and Supply to UIN Holders | Report in Table 3.2 Place of Supply-Wise | Reporting Tables – 4A or 4C or 9 as the case may be |
Clarification in regard to ITC availed – It has been clarified in the circular that each and every entry relating to ITC either to be availed or to be reversed or ineligible ITC shall be reported in form GSTR-3B. Generally entry pertaining to blocked ITC, ITC barred by limitation etc.. not stated in form GSTR-3B but as per clarification such ITC shall also be reported in the relevant tables of form GSTR-3B
1. Ineligible ITC under section 17(5) – Required to be Reversal in GSTR-3B
If such ITC (ineligible ITC) is part of the eligible/available ITC appearing in table 4(A) of Form GSTR-3B then such reversal shall be made in table 4(B)(2) of Form GSTR-3B otherwise such ineligible ITC shall be stated in table 4(D)(1)
2. ITC not available, on account of limitation of time period as delineated in sub-section (4) of section 16 of the CGST Act
Such ITC shall be reported in table 4(D)(2) of the Form GSTR-3B
3. ITC not available – where the recipient of an intra-State supply is located in a different State / UT than that of place of supply
Such ITC shall be reported in table 4(D)(2) of the Form GSTR-3B
4. ITC auto populated in table 4A of GSTR-3B but goods not received by the recipient in that month.
Such ITC shall be reversed in table 4(B)(2)
5. ITC reversal due to Non-Payment of consideration to supplier within 180 days
Such ITC shall be reversed in table 4(B)(2)
6. ITC Reclaimed on payment of consideration
Such ITC shall be availed and reported in table 4(A)(5).
7. ITC to be reversed due to some inadvertent mistake happened in previous tax periods
Such ITC shall be reversed in table 4(B)(2)
Circular No. 171/02/2022-GST dated 06-07-2022
Clarification on issue of Fake Invoices
| S.No. | Issues | Clarification |
| 1 | A issued tax invoice to B without any supply of goods or services.
Clarification for penal Action against A. |
As there is no supply by ‘A’ to ‘B’ in respect of such tax invoice in terms of the provisions of section 7 of CGST Act, no tax liability arises against ‘A’ for the said transaction, and accordingly, no demand and recovery is required to be made against ‘A’ under the provisions of section 73 or section 74 of CGST Act in respect of the same. Besides, no penal action under the provisions of section 73 or section 74 is required to be taken against ‘A’ in respect of the said transaction.
The registered person ‘A’ shall, however, be liable for penal action under section 122 (1)(ii) of the CGST Act for issuing tax invoices without actual supply of goods or services or both. |
| 2 | ‘B’ avails input tax credit on the
basis of the said tax invoice and utilizes the said ITC towards output tax liability. Whether ‘B’ will be liable for the demand and recovery of the said ITC, along with penal action, under the provisions of section 73 or section 74 or any other provisions of the CGST Act. |
Since the registered person ‘B’ has availed and utilized fraudulent ITC he shall be liable for the demand and recovery of the said ITC, along with penal action, under the provisions of section 74 of the CGST Act, along with applicable interest under provisions of section 50 of the said Act.
No penalty for the same act, i.e. for the said fraudulent availment or utilization of ITC, can be imposed on ‘B’ under any other provisions of CGST Act, including under section 122. |
| 3 | ‘B’ further passes on the said input tax credit to another registered person ‘C’ by issuing invoices without underlying supply of goods or services or both.
Whether ‘B’ will be liable for the demand and recovery and penal action, under the provisions of section 73 or section 74 or any other provisions of the CGST Act. |
In this case, there was no supply of goods or services or both by ‘B’ to ‘C’ in respect of the said transaction and also no tax was required to be paid in respect of the said transaction. Therefore, in these specific cases, no demand and recovery of either input tax credit wrongly/ fraudulently availed by ‘B’ in such case or tax liability in respect of the said outward transaction by ‘B’ to ‘C’ is required to be made from ‘B’ under the provisions of section 73 or section 74 of CGST Act.
However, in such cases, ‘B’ shall be liable for penal action both under section 122(1)((ii) and section 122(1)(vii) of the CGST Act, for issuing invoices without any actual supply of goods and/or services as also for taking/ utilizing input tax credit without actual receipt of goods and/or services. |
It is cleared from the said clarification if there is not the case of supply then action under section 74 of CGST Act may not be initiated.
Circular No. 172/02/2022-GST dated 06-07-2022
Various Issues Clarified
| S.No. | Issue | Clarification |
| Refund claimed by the recipients of supplies regarded as deemed export | ||
| 1 | Whether the Input Tax Credit (ITC) availed by the recipient of deemed export supply for claiming refund of tax paid on supplies regarded as deemed exports would be subjected to provisions of Section 17 of the CGST Act, 2017 | The ITC so availed by the recipient of deemed export supplies would not be subjected to provisions of Section 17 of the CGST Act, 2017. |
| 2 | Whether the ITC availed by the recipient of deemed export supply for claiming refund of tax paid on supplies regarded as deemed
exports is to be included in the “Net ITC” for computation of refund of unutilised ITC under rule 89(4) & rule 89 (5) of the CGST Rules, 2017 |
The ITC of tax paid on deemed export supplies, allowed to the recipients for claiming refund of such tax paid, is not ITC in terms of the provisions of Chapter V of the CGST Act, 2017. Therefore, such ITC availed by the recipient of deemed export supply for claiming refund of tax paid on supplies regarded as deemed exports is not to be included in the “Net ITC” for computation of refund of unutilised ITC on account of zero-rated supplies under rule 89(4) or on account of inverted rated structure under rule 89(5) of the CGST Rules, 2017. |
| Clarification on various issues of section 17(5) of the CGST Act | ||
| 3 | Whether the proviso at the end of clause (b) of sub-section (5) of section 17 of the CGST Act is applicable to the entire clause (b) or the said proviso is applicable only to sub-clause (iii) of clause (b)? | It is clarified that the proviso after sub-clause (iii) of clause (b) of sub-section (5) of section 17 of the GST Act is applicable to the whole of lause (b) of sub-section (5) of section 17 of the CGST Act.
The proviso is “Provided that the input tax credit in respect of such goods or services or both shall be available, where it is obligatory for an employer to provide the same to its employees under any law for the time being in force.” |
| 4 | Whether the provisions of sub-clause (i) of clause (b) of sub-section (5) of section 17 of the CGST Act bar availment of ITC on input services by way of “leasing of motor vehicles, vessels or aircraft” or ITC on input services by way of any type of leasing is barred under the said provisions? | It is clarified that “leasing” referred
in sub-clause (i) of clause (b) of sub-section (5) of section 17 refers to leasing of motor vehicles, vessels and aircrafts only and not to leasing of any other items. |
| Perquisites provided by employer to the employees as per contractual agreement | ||
| 5 | Whether various perquisites provided by the employer to its employees in terms of contractual agreement entered into between
the employer and the employee are liable for GST? |
Perquisites provided by the employer to the employee in terms of contractual agreement entered into between the employer and the
employee, will not be subjected to GST when the same are provided in terms of the contract between the employer and employee |
| Utilisation of the amounts available in the electronic credit ledger and the electronic cash ledger for payment of tax and other liabilities | ||
| 6 | Whether the amount available in the electronic credit ledger can be used for making payment of any tax under the GST Laws? | It is clarified that any payment towards output tax, whether self-assessed in the return or payable as a consequence of any proceeding instituted under the provisions of GST Laws, can be made by utilization of the amount available in the electronic credit ledger of a registered person.
The electronic credit ledger cannot be used for making payment of any tax which is payable under reverse charge mechanism. |
| 7 | Whether the amount available in the electronic credit ledger can be used for making payment of any liability other than tax under the GST Laws? | It cannot be used for making payment of any interest, penalty, fees or any other amount payable under the said acts. Similarly, electronic credit ledger cannot be used for payment of erroneous refund sanctioned to the taxpayer, where such refund was sanctioned in cash. |
| 8 | Whether the amount available in the electronic cash ledger can be used for making payment of any liability under the GST Laws? | As per sub – section (3) of section 49 of the CGST Act, the amount available in the electronic cash ledger may be used for making any payment towards tax, interest, penalty, fees or any other amount payable under the provisions of the GST Laws. |
Circular No. 173/02/2022-GST dated 06-07-2022
Clarification on issue of claiming refund under inverted duty structure where the supplier is supplying goods under some concessional notification
It has been clarified vide Circular No.135/05/2020 that refund on account of inverted duty structure would not be admissible in cases where the input and output supply are same.
Para 3.2 of the Circular 135/05/2020 has been amended by substituted following paras.
“3.2 It may be noted that refund of accumulated ITC in terms of clause (ii) of first proviso to sub-section (3) of section 54 of the CGST Act is available where the credit has accumulated on account of rate of tax on inputs being higher than the rate of tax on output supplies. It is noteworthy that, the input and output being the same in such cases, though attracting different tax rates at different points in time, do not get covered under the provisions of clause (ii) of the first proviso to sub-section (3) of section 54 of the CGST Act.
3.3 There may however, be cases where though inputs and output goods are same but the output supplies are made under a concessional notification due to which the rate of tax on output supplies is less than the rate of tax on inputs. In such cases, as the rate of tax of output supply is less than the rate of tax on inputs at the same point of time due to supply of goods by the supplier under such concessional notification, the credit accumulated on account of the same is admissible for refund under the provisions of clause (ii) of the first proviso to sub-section (3) of section 54 of the CGST Act, other than the cases where output supply is either Nil rated or fully exempted, and also provided that supply of such goods or services are not notified by the Government for their exclusion from refund of accumulated ITC under the said clause.”
Now, the refund shall be allowable on the same goods if rate on such output supply is less due to concessional notification.
Circular No. 174/02/2022-GST dated 06-07-2022
Prescribing manner of re-credit in electronic credit ledger using FORM GST PMT-03A
The law is that erroneous refund deposited by the registered person shall be re-credited to the electronic credit ledger by the proper officer by an order made in Form GST PMT-03A.
This circular is stating the procedure for re-credit of amount in electronic credit ledger.
1. The taxpayer shall deposit the amount of erroneous refund through Form GST DRC-03 by debit of amount from electronic cash ledger.
2. The taxpayer shall clearly mention the reason for making payment in the text box.
3. The taxpayer shall make a written request, in format enclosed as Annexure-A, to proper officer to re-credit the amount.
4. The proper officer, on being satisfied that the full amount of erroneous refund along with applicable interest, as per the provisions of section 50 of the CGST Act, and penalty, wherever applicable, has been paid by the said registered person in FORM GST DRC-03 by way of debit in electronic cash ledger, he shall re-credit an amount in electronic credit ledger, equivalent to the amount of erroneous refund so deposited by the registered person, by passing an order in FORM GST PMT-03A, preferably within a period of 30 days from the date of receipt of request for re-credit of rroneous refund amount so deposited or from the date of payment of full amount of erroneous refund along with applicable interest, and penalty, wherever applicable, whichever is later.
Circular No. 175/02/2022-GST dated 06-07-2022
Manner of filing refund of unutilized ITC on account of export of electricity.
Circular No. 176/02/2022-GST dated 06-07-2022
Withdrawal of Circular No 106/25/2019-GST dated 29th June, 2019.
Circular No. 106/25/2019-GST dated 29.06.2019 wherein certain clarifications were given in relation to rule 95A for refund of taxes paid on inward supply of indigenous goods by retail outlets established at departure area of the international airport beyond immigration counters when supplied to outgoing international tourist against foreign exchange.
The said rule 95A has been omitted, retrospectively w.e.f. 01.07.2019. Accordingly, the Board, withdraws, ab-initio, Circular No 106/25/2019-GST dated 29th June, 2019.
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