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Analysis of Amendment To CGST Act, 2017 which came in Force From 1st January, 2022

Here with I am providing summary along with analysis of such amendments  as below for better understanding to our tax fraternity. Also Read: Notification No. 39/2021–Central Tax [S.O. 5328(E)]
21/12/2021

S. No. Amendment to Section Clause as per Finance Bill Amendments Retrospective  or Prospective (date of effect )
1. 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 payments or other valuable consideration will be treated as “Supply”.  As per inserted clause to Sec.7(1) (aa) , explanation, it is clarified that club/association and its members will be two separate persons. Retrospective i.e. w.e.f.01.07.2017.
2. 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 Sec.7. Retrospective i.e. w.e.f.01.07.2017
3. Conditions and Eligibility for claim ITC 109 Sec.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 Form GSTR-2B is still in ambiguous. Prospective   i.e. w. e .f. 01.01.2022.
4. Sec.74. Determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilized  by reason of fraud or any wilfull-misstatement of facts . 113 Proceedings initiated u/s 129 (E-Way Bill) and 130 ( Non-Compliance provisions) will be independent and separate proceedings. If demand under Sec.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  i.e. w. e. f. 01.01.2022
5. Sec.75, General Provisions relating to determ ination of tax. 114 An explanation in Sec.75 has been inserted to define that the tax details furnished in Form GSTR-1 by the supplier will be treated as ‘SELF ASSESSED TAX” only. This will restriction malpractice of passing on the Input Tax Credit through declaring in Form GSTR-1 but not paying tax in Form GSTR-3B. Prospective  i.e. w. e. f. 01.01.2022.
6 Sec.83(1), Provisional attachment to protect revenue in certain cases. 115 The power of provisional attachment of property under Sec.83 has been increased. The power of provisional attachment of property has been increased to engage any proceedings beneath Chapter XII (Assessment), Chapter XIV (Inspection, Search, Seizure and Arrest) or Chapter XV (Demands and Recovery). Prospective  i.e. w. e. f. 01.01.2022.
 

7

 

Sec.107, Appeals to Appellate Authority.

 

116

 

The taxpayer is requested 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   i.e. w. e. f. 01.01.2022.

8 Sec.129, Detention, Seizure and Release of goods and conveyances in transit. 116 For appeals against orders passed under Sec.129 i.e. where an appeal is filed for cases pertaining to detention or seizure of goods or conveyance;@25% penalty shall be paid as pre deposit. Prospective   i.e. w. e. f. 01.01.2022.
9 Sec.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 forwarded for payment of such penalty.

In case owner does not come forwarded 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 the bond/ security for releasing the goods and conveyance has been removed.

Prospective   i.e. w. e. f. 01.01.2022.
10 Sec.130. Confiscation of goods or conveyances and levy of penalty . 118 Changes in the procedures relating confiscation and levy of penalties.

Detached of Sec.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   i.e. w. e. f. 01.01.2022.
11 Sec.151, Power to call for information 119 Scope of the power to call for information has been winded.  The Commissioner or an officer authorized 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   i.e. w. e. f. 01.01.2022.
12 Sec.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   i.e. w. e. f. 01.01.2022.
13 Power to issue instructions or directions. 121 Amendments relating to Power to issue instructions or directions due to changes in Section .151. Prospective   i.e. w. e. f. 01.01.2022.

Prepared by B. S. Seethapathi Rao, Tax Consultant, Kakinada.

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