The Central Government vide Notification No. 39/2021 – Central Tax dated 21.12.2021 seeks to bring into force certain clauses of Finance Act, 2021 prospectively from 1st January 2022 and some clauses which are effective retrospectively from 1st July 2017.
Summary of the analysis of amendments are as follows:
| Amendment to Section | Clause as per Financial Bill | Amendment | Retrospective or Prospective |
| 7(1)(aa) : Scope of supply | 108 | The activities or transactions, by a person, other than an individual, to its members or constituents or vice-versa, for cash, deferred payment or other valuable consideration will be treated as ‘Supply’.
Further, through the newly inserted explanation, it is clarified that club / association and its members will be two separate persons. |
Retrospective w.e.f. 01.07.2017 |
| Schedule II: | 122 | Paragraph 7 of Schedule II specifying supply (of goods) by any unincorporated association or body of persons to a member as a supply of goods accordingly has been omitted retrospectively due to inclusion of the same in Section 7. | Retrospective w.e.f. 01.07.2017 |
| 16: Eligibility and conditions for taking input tax credit | 109 | Section 16(2) has been amended by inserting the clause (aa) which states that if supplier has furnished details of invoice / debit note in his GSTR 1 then only the recipient will be able to claim the ITC of the same. Thus an end to Rule 36(4) i.e. adhoc credit and only matched credit to be availed however, communication to the recipient should be in Form GSTR-2A or GSTR-2B is still in vague. | Prospective w.e.f. 01.01.2022 |
| 74: Determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised by reason of fraud or any wilful- misstatement or suppression of facts | 113 | Proceedings initiated u/s 129 and 130 (i.e. e way bill non- compliance provisions) will be independent and separate proceedings.
If demand under Section 73 & 74 has been concluded, any action initiated for violation of E-Way Bill related conditions will still be continued and it will be considered as independent proceedings. |
Prospective w.e.f. 01.01.2022 |
| 75: General provisions relating to determination of tax | 114 | An explanation in Section 75 has been inserted to define that the tax details furnished in GSTR 1 by the supplier will be treated as ‘self-assessed tax’ only.
This will curb malpractice of passing on the ITC through declaring in GSTR-1 but not paying tax in GSTR-38. |
Prospective w.e.f. 01.01.2022 |
| 83(1): Provisional attachment to protect revenue in certain cases | 115 | The powers of provisional attachment of property under Section 83 has been increased.
The powers of provisional attachment of property has been increased to engage any proceedings beneath Chapter XII (Assessment), Chapter XIV (Inspection, Search, Seizure & Arrest) or Chapter XV(Demands & Recovery). |
Prospective w.e.f. 01.01.2022 |
| 107: Appeals to Appellate Authority. | 116 | The taxpayer is required to pay 25% of the penalty as pre-deposit in cases where an appeal is filed for cases pertaining to detention or seizure of goods or conveyance. | Prospective w.e.f. 01.01.2022 |
| 129: Detention, seizure and release of goods and conveyances in transit | 116 | For appeals against orders passed under Section 129 i.e. where an appeal is filed for cases pertaining to detention or seizure of goods or conveyance – 25 % of the penalty shall be paid as pre deposit. | Prospective w.e.f. 01.01.2022 |
| 129: Detention, seizure and release of goods and conveyances in transit | 117 | Changes in the procedures relating to detention and seizure of goods and conveyances
Penalty of 200% of tax shall be payable instead of 100% relating to Detention, seizure and release of goods and conveyances in transit when the owner of goods comes forward for payment of such penalty. In case owner does not come forward for payment of penalty, goods and conveyance shall be released on payment of penalty equivalent to higher of 50% of the value of the goods or 200% of tax payable on such goods. Option of furnishing of bond/security for releasing the goods and conveyance has been removed. |
Prospective w.e.f. 01.01.2022 |
| 130: Confiscation of goods or conveyances and levy of penalty | 118 | Changes in the procedures relating to confiscation and levy of penalties.
Delinking of Section 129 & 130. The wider powers for confiscation of goods have been limited for certain specified act. Clause w.r.t. fine in lieu of confiscation is removed. Penalty of 100% in case of confiscation of goods for specified cases. |
Prospective w.e.f. 01.01.2022 |
| 151: Power to call for information | 119 | Scope of the power to call for information has been widened.
The Commissioner or an officer authorised by him may, by an order, direct any person to furnish information relating to any matter dealt with in connection with this Act, within such time, in such form, and in such manner, as may be specified therein. |
Prospective w.e.f. 01.01.2022 |
| 152: Bar on disclosure of information | 120 | Procedural changes in the provisions relating to bar on disclosure of information.
No information obtained through return or otherwise be disclosed without giving an opportunity of personal hearing. Sub-section (2) has been omitted wherein no access to any information or any individual return referred to in section 151. |
Prospective w.e.f. 01.01.2022 |
| 168: Power to issue instructions or directions | 121 | Amendments relating to Power to issue instructions or directions due to changes in Section 151. | Prospective w.e.f. 01.01.2022 |
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