The Central Finance Act 2021 has been passed by both the houses of parliament and the President has given assent on 28.03.2021. It has made several amendments to the Central Goods & Services Tax Act, 2017 (CGST Act) followed by corresponding changes in the respective State Goods & Services Tax Acts, 2017 (SGST Acts) and Union Territory Goods & Services Tax Acts, 2017 (UTGST Acts). Certain amendments are made to the Integrated Goods & Services Tax Act, 2017 (IGST Act) also.
Analysis
Amendments in the CGST Act by Central Finance Act, 2021
| Section 7 (1) (a) of the CGST Act, before amendment | Section 7 (1) (a) of the CGST Act, after amendment – Clause (aa) inserted below 7(1) (a) |
| 7. Scope of supply
(1) For the purposes of this Act, the expression “supply” includes–– (a) all forms of supply of goods or services or both such as sale, transfer, barter, exchange, license, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business; |
“(aa) 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.
Explanation. ––For the purposes of this clause, it is hereby clarified that, notwithstanding anything contained in any other law for the time being in force or any judgment, decree or order of any Court, tribunal or authority, the person and its members or constituents shall be deemed to be two separate persons and the supply of activities or transactions inter se shall be deemed to take place from one such person to another;”. (with effect from the 1st day of July, 2017) |
Comments: Section 108 of the Finance Act, 2021 brought in this amendment by which tax is levied on activities or transactions involving supply of goods or services by any person, other than an individual, to its members or constituents or vice-versa, for cash, deferred payment or other valuable consideration. Along with this insertion, para 7 of schedule ll has also been omitted (In fact, Schedule II does not deem a transaction to be a supply; it merely classifies supplies into goods or services). Apparently this insertion resolves the ambiguity regarding the tax liability of the services provided by a club to its members and vice versa. As per the explanation given, it is clarified that the person and its members or constituents shall be deemed to be two separate persons and the supply of activities or transactions inter se shall be deemed to take place from one such person to another. Thus services/goods supplied by a club/similar institution to its members and vice versa are liable to tax under the GST Acts.
Obviously this amendment has an effect of overruling the judgment of the Hon’ble Supreme Court in State of West Bengal Vs. Calcutta Club Limited dated: 03.10.2019 (relating to an identical issue in the service tax era) which was based on the doctrine of mutuality which stated that ‘no one can make profit out of himself’. Hence, the decision was that the clubs are not entitled to charge, collect and pay service tax on any services made to members.
| Section 16 (2) (a) of the CGST Act, before amendment | Section 16 (2) (a) of the CGST Act, after amendment – Clause (aa) inserted below S.16 (2) (a) |
| 16. Eligibility and conditions for taking input tax credit
(2) Notwithstanding anything contained in this section, no registered person shall be entitled to the credit of any input tax in respect of any supply of goods or services or both to him unless, — (a) he is in possession of a tax invoice or debit note issued by a supplier registered under this Act, or such other tax paying documents as may be prescribed*; |
“(aa) the details of the invoice or debit note referred to in clause (a) has been furnished by the supplier in the statement of outward supplies and such details have been communicated to the recipient of such invoice or debit note in the manner specified under section 37”. |
Comments: By Section 109 of the Finance Act, 2021, clause (aa) is inserted below section 16(2) (a) of the Act, further stipulating that input tax credit on invoice or debit note is available to a recipient only if the details of such invoice or debit note has been furnished by the supplier in the statement of outward supplies and such details have been communicated to the recipient of such invoice or debit note. U/s. 37 now suppliers have liability to furnish the details of outward suppliers through their returns. By this amendment, for availing ITC by recipients also, the same become mandatory.
| Section 35 (5) of the CGST Act, before amendment | Section 35 (5) of the CGST Act, after amendment – Omitted |
| Section 35. Accounts and other records
(5) Every registered person whose turnover during a financial year exceeds the prescribed limit shall get his accounts audited by a chartered accountant or a cost accountant and shall submit a copy of the audited annual accounts, the reconciliation statement under sub-section (2) of section 44 and such other documents in such form and manner as may be prescribed. |
Omitted |
Comments: By Section 110 of the Finance Act, 2021, sub section (5) to section 35 is omitted. By omitting this sub – section, the mandatory requirement of getting annual accounts audited and the reconciliation statement submitted by CA or Cost Accountant is scrapped. This could reportedly help over 10 million companies save audit fees worth around INR 300 billion (US$4.12 billion) annually, it is reported. Any shortcomings or discrepancies in books of account in regard of GST can be pointed out by the Auditor through tax audit report done under the Income Tax Law, therefore, double audit on the same books of account can be avoided. (The amendment will come into force by a Notification, not yet issued).
| Section 44 of the CGST Act, before amendment | Section 44 of the CGST Act, after amendment – Substituted as below |
| 44. Annual return
(1) Every registered person, other than an Input Service Distributor, a person paying tax under section 51 or section 52, a casual taxable person and a non-resident taxable person, shall furnish an annual return for every financial year electronically in such form and manner as may be prescribed on or before the thirty-first day of December following the end of such financial year. Provided that the Commissioner may, on the recommendations of the Council and for reasons to be recorded in writing, by notification, extend the time limit for furnishing the annual return for such class of registered persons as may be specified therein: Provided further that any extension of time limit notified by the Commissioner of State tax or the Commissioner of Union territory tax shall be deemed to be notified by the Commissioner. (2) Every registered person who is required to get his accounts audited in accordance with the provisions of sub-section (5) of section 35 shall furnish, electronically, the annual return under sub-section (1) along with a copy of the audited annual accounts and a reconciliation statement, reconciling the value of supplies declared in the return furnished for the financial year with the audited annual financial statement, and such other particulars as may be prescribed. “Explanation.- For the purposes of this section, it is hereby declared that the annual return for the period from the 1st July, 2017 to the 31st March, 2018 shall be furnished on or before the 7 “31st January, 2020″ and the annual return for the period from the 1st April, 2018 to the 31st March, 2019 shall be furnished on or before the 31st March, 2020.” |
Every registered person, other than an Input Service Distributor, a person paying tax under section 51 or section 52, a casual taxable person and a non-resident taxable person shall furnish an annual return which may include a self-certified reconciliation statement, reconciling the value of supplies declared in the return furnished for the financial year, with the audited annual financial statement for every financial year electronically, within such time and in such form and in such manner as may be prescribed:
Provided that the Commissioner may, on the recommendations of the Council, by notification, exempt any class of registered persons from filing annual return under this section: Provided further that nothing contained in this section shall apply to any department of the Central Government or a State Government or a local authority, whose books of account are subject to audit by the Comptroller and Auditor-General of India or an auditor appointed for auditing the accounts of local authorities under any law for the time being in force.”. |
Comments: By Section 111 of the Finance Act, 2021, existing section 44 is substituted by a new section to remove mandatory requirement of furnishing a reconciliation statement duly audited by CA or Cost Accountant (GSTR-9C) and to provide for furnishing self-certified reconciliation statement along with GSTR-9 Annual Return. It further provides for the Commissioner to exempt a class of taxpayers from the requirement of filing the annual return. Commissioner’s power to extent the time limit for furnishing the annual return for any class of registered persons is no more in force. That part, the new provision has no applicability for the Government departments/local bodies having statutory audit mechanism.
| Section 50 (1) of the CGST Act & its proviso, before amendment | Section 50 (1) of the CGST Act, after amendment – Existing proviso below section 50(1) is substituted |
| Section 50. Interest on delayed payment of tax
(1) Every person who is liable to pay tax in accordance with the provisions of this Act or the rules made thereunder, but fails to pay the tax or any part thereof to the Government within the period prescribed, shall for the period for which the tax or any part thereof remains unpaid, pay, on his own, interest at such rate, not exceeding eighteen per cent., as may be notified by the Government on the recommendations of the Council. Provided that the interest on tax payable in respect of supplies made during a tax period and declared in the return for the said period furnished after the due date in accordance with the provisions of section 39, except where such return is furnished after commencement of any proceedings under section 73 or section 74 in respect of the said period, shall be levied on that portion of the tax that is paid by debiting the electronic cash ledger. |
“Provided that the interest on tax payable in respect of supplies made during a tax period and declared in the return for the said period furnished after the due date in accordance with the provisions of section 39, except where such return is furnished after commencement of any proceedings under section 73 or section 74 in respect of the said period, shall be payable on that portion of the tax which is paid by debiting the electronic cash ledger.”.
(with effect from the 1st day of July, 2017) |
Comments: By Section 112 of the Finance Act, 2021, existing proviso below section 50(1) is substituted and thereby, the interest has to be paid on net tax liability of a tax payer provided, the person has not been issued any show cause notice under section 73 or section 74. This amendment has been introduced to incorporate the recommendation of the 39th GST Council.
| Section 74, Explanation – 1 below sub-section (11) of the CGST Act, before amendment | Section 74, Explanation -1 below sub-section (11) of the CGST Act, after amendment
In clause (ii), for the words and figures “sections 122, 125, 129 and 130”, the words and figures “sections 122 and 125” shall be substituted. |
| Section 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.
Explanation 1. — For the purposes of section 73 and this section, — (i) the expression “all proceedings in respect of the said notice” shall not include proceedings under section 132; (ii) where the notice under the same proceedings is issued to the main person liable to pay tax and some other persons, and such proceedings against the main person have been concluded under section 73 or section 74, the proceedings against all the persons liable to pay penalty under sections 122, 125, 129 and 130 are deemed to be concluded. |
Clause (i) – No change (ii) where the notice under the same proceedings is issued to the main person liable to pay tax and some other persons, and such proceedings against the main person have been concluded under section 73 or section 74, the proceedings against all the persons liable to pay penalty under sections 122 and 125 are deemed to be concluded. |
Comments: By Section 113 of the Finance Act, 2021, clause (ii) of Explanation -1 to section 74(11) is substituted. Before amendment, in clause (ii) of Explanation -1 to section 74(11), where proceedings are issued to the main person liable to pay tax and some other persons, and such proceedings against the main person have been concluded under section 73 or section 74, the proceedings against all the persons liable to pay penalty under sections 122, 125, 129 and 130 are deemed to be concluded. By this amendment proceedings U/s. 129 & 130 (detention, seizure and confiscation of goods and conveyances in transit) are delinked from section 74 and sections 129 & 130 are amended accordingly. Thereby for seizure and confiscation of goods and conveyances in transit separate proceeding can be issued distinct from the assessment proceedings.
| Section 75(12), of the CGST Act, before amendment | Section 75(12) of the CGST Act, after amendment – After sub-section (12) the Explanation below is inserted |
| Section 75. General provisions relating to determination of tax
(12) Notwithstanding anything contained in section 73 or section 74, where any amount of self-assessed tax in accordance with a return furnished under section 39 remains unpaid, either wholly or partly, or any amount of interest payable on such tax remains unpaid, the same shall be recovered under the provisions of section 79. |
‘Explanation. ––For the purposes of this sub-section, the expression “self-assessed tax” shall include the tax payable in respect of details of outward supplies furnished under section 37, but not included in the return furnished under section 39.’. |
Comments: By Section 114 of the Finance Act, 2021 an explanation is inserted below section 75(12). Explanation so inserted clarifies that “self-assessed tax” shall include the tax payable in respect of details of outward supplies furnished under section 37, but not included in the return furnished under section 39. Thus the scope of section 75 is further widened. Now, if the turnover as per GSTR 1 is shown more as compared to the outward supplies shown in GSTR 3B due to any reason for e.g. omission, shortage of funds etc., then also the proper officer could recover the unpaid amounts invoking provisions U/s. 79 (recovery of tax) directly.
| Section 83(1), of the CGST Act, before the amendment | Section 83(1) of the CGST Act, after amendment – This sub-section is substituted |
| Section 83. Provisional attachment to protect revenue in certain cases
(1) Where during the pendency of any proceedings under section 62 or section 63 or section 64 or section 67 or section 73 or section 74, the Commissioner is of the opinion that for the purpose of protecting the interest of the Government revenue, it is necessary so to do, he may, by order in writing attach provisionally any property, including bank account, belonging to the taxable person in such manner as may be prescribed. |
“(1) Where, after the initiation of any proceeding under Chapter XII, Chapter XIV or Chapter XV, the Commissioner is of the opinion that for the purpose of protecting the interest of the Government revenue it is necessary so to do, he may, by order in writing, attach provisionally, any property, including bank account, belonging to the taxable person or any person specified in sub-section (1A) of section 122, in such manner as may be prescribed.”. |
Comments: By Section 115 of the Finance Act, 2021, sub-section (1) of section 83 is substituted. After substitution, the subsection says that, in the case where the Commissioner, after initiating any proceeding under chapter XII (assessment), chapter XIV (Inspection, search, seizure and arrest) or chapter XV (Demands and recovery), believes it necessary for the purpose of protecting the government revenue, may order in writing to attach, provisionally, any property or bank account belonging to the taxable person or any person specified in sub-section (1A) of section 122, in such manner as may be prescribed. This amendment enables the authorities to attach property not only of the taxable person but also of the person who by any means retains the benefit of the transaction. As per sub-section (2) of section 83 this provisional attachment shall have an effect of one year only. In the present situation the prime area targeted hereby is the beneficiaries of ineligible ITC availed on fake invoices.
| Section 107(6), of the CGST Act, before amendment | Section 107(6) of the CGST Act, after amendment – In this section the following proviso is inserted |
| Section 107. Appeals to Appellate Authority
(6) No appeal shall be filed under sub-section (1), unless the appellant has paid— (a) in full, such part of the amount of tax, interest, fine, fee and penalty arising from the impugned order, as is admitted by him; and (b) a sum equal to ten per cent. of the remaining amount of tax in dispute arising from the said order, in relation to which the appeal has been filed. |
provided that no appeal shall be filed against an order under sub-section (3) of section 129, unless a sum equal to twenty-five per cent of the penalty has been paid by the appellant.”. |
Comments: By Section 116 of the Finance Act, 2021, a proviso is inserted below section 107 (6). Before amendment, for filing an appeal against an order passed under section 129(3), 10 percent of the disputed tax/penalty amount has to be deposited by the tax person/appellant. By this amendment the pre-deposit to be paid along with the filing of such an appeal is 25 % of the penalty in dispute. Section 129 is also amended.
| Section 129, of the CGST Act, before amendment | Section 129 of the CGST Act, after amendment : (i) in sub-section (1), clauses (a) and (b) are substituted (ii) sub-section (2) is omitted (iii) sub-section (3) is substituted (iv) in sub-section (4), for the words “No tax, interest or penalty”, the words “No penalty” shall be substituted & (v) sub-section (6) is substituted |
| 129. Detention, seizure and release of goods and conveyances in transit.
(1) Notwithstanding anything contained in this Act, where any person transports any goods or stores any goods while they are in transit in contravention of the provisions of this Act or the rules made thereunder, all such goods and conveyance used as a means of transport for carrying the said goods and documents relating to such goods and conveyance shall be liable to detention or seizure and after detention or seizure, shall be released, –– (a) on payment of the applicable tax and penalty equal to one hundred per cent. of the tax payable on such goods and, in case of exempted goods, on payment of an amount equal to two per cent of the value of goods or twenty-five thousand rupees, whichever is less, where the owner of the goods comes forward for payment of such tax and penalty; (b) on payment of the applicable tax and penalty equal to the fifty per cent of the value of the goods reduced by the tax amount paid thereon and, in case of exempted goods, on payment of an amount equal to five per cent of the value of goods or twenty-five thousand rupees, whichever is less, where the owner of the goods does not come forward for payment of such tax and penalty; (c) upon furnishing a security equivalent to the amount payable under clause (a) or clause (b) in such form and manner as may be prescribed: Provided that no such goods or conveyance shall be detained or seized without serving an order of detention or seizure on the person transporting the goods. (2) The provisions of sub-section (6) of section 67 shall, mutatis mutandis, apply for detention and seizure of goods and conveyances. (3) The proper officer detaining or seizing goods or conveyances shall issue a notice specifying the tax and penalty payable and thereafter, pass an order for payment of tax and penalty under clause (a) or clause (b) or clause (c). (4) No tax, interest or penalty shall be determined under sub-section (3) without giving the person concerned an opportunity of being heard. (5) On payment of amount referred in sub-section (1), all proceedings in respect of the notice specified in sub-section (3) shall be deemed to be concluded. (6) Where the person transporting any goods or the owner of the goods fails to pay the amount of tax and penalty as provided in sub-section (1) within seven days of such detention or seizure, further proceedings shall be initiated in accordance with the provisions of section 130: Provided that where the detained or seized goods are perishable or hazardous in nature or are likely to depreciate in value with passage of time, the said period of seven days may be reduced by the proper officer. |
(1) Notwithstanding anything contained in this Act, where any person transports any goods or stores any goods while they are in transit in contravention of the provisions of this Act or the rules made thereunder, all such goods and conveyance used as a means of transport for carrying the said goods and documents relating to such goods and conveyance shall be liable to detention or seizure and after detention or seizure, shall be released, ––
“(a) on payment of penalty equal to two hundred per cent of the tax payable on such goods and, in case of exempted goods, on payment of an amount equal to two per cent of the value of goods or twenty-five thousand rupees, whichever is less, where the owner of the goods comes forward for payment of such penalty; (b) on payment of penalty equal to fifty per cent of the value of the goods or two hundred per cent of the tax payable on such goods, whichever is higher, and in case of exempted goods, on payment of an amount equal to five per cent of the value of goods or twenty-five thousand rupees, whichever is less, where the owner of the goods does not come forward for payment of such penalty;”; ( c) No change (2) Omitted “(3) The proper officer detaining or seizing goods or conveyance shall issue a notice within seven days of such detention or seizure, specifying the penalty payable, and thereafter, pass an order within a period of seven days from the date of service of such notice, for payment of penalty under clause (a) or clause (b) of sub-section (1).”; (4) No penalty shall be determined under sub-section (3) without giving the person concerned an opportunity of being heard. (5) No change (6) Where the person transporting any goods or the owner of such goods fails to pay the amount of penalty under sub-section (1) within fifteen days from the date of receipt of the copy of the order passed under sub-section (3), the goods or conveyance so detained or seized shall be liable to be sold or disposed of otherwise, in such manner and within such time as may be prescribed, to recover the penalty payable under sub-section (3): Provided that the conveyance shall be released on payment by the transporter of penalty under sub-section (3) or one lakh rupees, whichever is less: Provided further that where the detained or seized goods are perishable or hazardous in nature or are likely to depreciate in value with passage of time, the said period of fifteen days may be reduced by the proper officer.”. |
Comments: By Section 117 of the Finance Act, 2021, section 129 is substituted substantially. Before amendment, U/s. 129(1) transportation of goods in contravention of any provisions of the Act attracted tax and penalty. The constitutional validity of this section was challenged before various High Courts across the country on the prime ground that, in a case where no tax is found evaded how tax can be levied U/s. 129 (1) and those petitions are pending. This lacuna is cured by substituting the words “Applicable tax and penalty” by “penalty” in respective places.
Likewise, before amendment section 129 heavily relied on sub- section (6) of section 67 for procedural aspects. This servitude of section 129 is scrapped and give own legs for procedural compliance. That apart, sub section (3) has been substituted which laid down that proper officer after detaining or seizing goods or conveyance shall issue a notice within seven days of seizure or detention specifying the penalty payable and pass an order within seven days from date of service of such notice for payment of penalty as mentioned in clause (a) or clause(b) of sub section (1).
However, as a corollary, provisional release of goods upon furnishing of bond and sufficient security in terms of section 67(6) become impermissible. Thus, release of goods/conveyance on furnishing of bond/security subject to adjudication is discarded. Resultantly, the appeal provision available U/s. 107 against an order U/s 129(3), practically become unfruitful.
Another proviso added is that, the conveyance can be released on payment (by the transporter) of penalty under sub-section (3) or one lakh rupees, whichever is less. This is a beneficial provision for transporters to a certain extent, in cases where they are trapped due to the non-cooperation of the consignor/consignee to take release of the consignment after making necessary remittances.
| Section 130 (1), (2) & (3), of the CGST Act, before amendment | Section 130 (1), (2) & (3) of the CGST Act, after amendment:
(a) in sub –section (1) for “Notwithstanding anything contained in this Act, if”, the word “Where” is substituted; (b) in sub-section (2), in the second proviso, for the words, brackets and figures “amount of penalty leviable under sub-section (1) of section 129”, the words “penalty equal to hundred per cent. of the tax payable on such goods” is substituted; (c) sub-section (3) is omitted. |
| 130 Confiscation of goods or conveyances and levy of penalty.
(1) Notwithstanding anything contained in this Act, if any person— (i) supplies or receives any goods in contravention of any of the provisions of this Act or the rules made thereunder with intent to evade payment of tax; or (ii) does not account for any goods on which he is liable to pay tax under this Act; or (iii) supplies any goods liable to tax under this Act without having applied for registration; or (iv) contravenes any of the provisions of this Act or the rules made thereunder with intent to evade payment of tax; or (v) uses any conveyance as a means of transport for carriage of goods in contravention of the provisions of this Act or the rules made thereunder unless the owner of the conveyance proves that it was so used without the knowledge or connivance of the owner himself, his agent, if any, and the person in charge of the conveyance, then, all such goods or conveyances shall be liable to confiscation and the person shall be liable to penalty under section 122. (2) Whenever confiscation of any goods or conveyance is authorised by this Act, the officer adjudging it shall give to the owner of the goods an option to pay in lieu of confiscation, such fine as the said officer thinks fit: Provided that such fine leviable shall not exceed the market value of the goods confiscated, less the tax chargeable thereon: Provided further that the aggregate of such fine and penalty leviable shall not be less than the amount of penalty leviable under sub-section (1) of section 129: Provided also that where any such conveyance is used for the carriage of the goods or passengers for hire, the owner of the conveyance shall be given an option to pay in lieu of the confiscation of the conveyance a fine equal to the tax payable on the goods being transported thereon. (3) Where any fine in lieu of confiscation of goods or conveyance is imposed under sub-section (2), the owner of such goods or conveyance or the person referred to in subsection (1), shall, in addition, be liable to any tax, penalty and charges payable in respect of such goods or conveyance |
(1) Where, if any person—
(i) supplies or receives any goods in contravention of any of the provisions of this Act or the rules made thereunder with intent to evade payment of tax; or (ii) does not account for any goods on which he is liable to pay tax under this Act; or (iii) supplies any goods liable to tax under this Act without having applied for registration; or (iv) contravenes any of the provisions of this Act or the rules made thereunder with intent to evade payment of tax; or (v) uses any conveyance as a means of transport for carriage of goods in contravention of the provisions of this Act or the rules made thereunder unless the owner of the conveyance proves that it was so used without the knowledge or connivance of the owner himself, his agent, if any, and the person in charge of the conveyance, then, all such goods or conveyances shall be liable to confiscation and the person shall be liable to penalty under section 122. (2) Whenever confiscation of any goods or conveyance is authorised by this Act, the officer adjudging it shall give to the owner of the goods an option to pay in lieu of confiscation, such fine as the said officer thinks fit: Provided that such fine leviable shall not exceed the market value of the goods confiscated, less the tax chargeable thereon: Provided further that the aggregate of such fine and penalty leviable shall not be less than penalty equal to hundred per cent of the tax payable on such goods. Provided also that where any such conveyance is used for the carriage of the goods or passengers for hire, the owner of the conveyance shall be given an option to pay in lieu of the confiscation of the conveyance a fine equal to the tax payable on the goods being transported thereon. (3) Omitted |
Comments: By Section 118 of the Finance Act, 2021, certain changes brought in to section 130 in accordance with the amendments made to section 129.
| Section 151 of the CGST Act, before amendment | Section 151 of the CGST Act, after amendment – The section is substituted |
| 151. Power to collect statistics
(1) The Commissioner may, if he considers that it is necessary so to do, by notification, direct that statistics may be collected relating to any matter dealt with by or in connection with this Act. (2) Upon such notification being issued, the Commissioner, or any person authorised by him in this behalf, may call upon the concerned persons to furnish such information or returns, in such form and manner as may be prescribed, relating to any matter in respect of which statistics is to be collected |
“151. 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.”. Omitted |
Comments: By Section 119 of the Finance Act, 2021, existing section 151 is substituted. Before amendment, the Commissioner has to issue a notification for collection of statistics in connection with matters relating to this Act and thereupon call upon the concerned persons. Now the procedure is simplified prescribing that ‘by an order, direct any person to furnish information” and thereby collect any information. Here, the words “statistics” is also substituted by the word s “information” having wide connotation.
| Section 152 (1) & (2) of the CGST Act, before amendment | Section 152(1) & (2) of the CGST Act, after amendment – (a) in sub-section (1), –– (i) the words “of any individual return or part thereof” is omitted;
(ii) after the words “any proceedings under this Act”, the words “without giving an opportunity of being heard to the person concerned” is inserted; (b) sub-section (2) is omitted. |
| Section 152. Bar on disclosure of information
(1) No information of any individual return or part thereof with respect to any matter given for the purposes of section 150 or section 151 shall, without the previous consent in writing of the concerned person or his authorised representative, be published in such manner so as to enable such particulars to be identified as referring to a particular person and no such information shall be used for the purpose of any proceedings under this Act. (2) Except for the purposes of prosecution under this Act or any other Act for the time being in force, no person who is not engaged in the collection of statistics under this Act or compilation or computerisation thereof for the purposes of this Act, shall be permitted to see or have access to any information or any individual return referred to in section 151. |
(1) No information with respect to any matter given for the purposes of section 150 or section 151 shall, without the previous consent in writing of the concerned person or his authorised representative, be published in such manner so as to enable such particulars to be identified as referring to a particular person and no such information shall be used for the purpose of any proceedings under this Act without giving an opportunity of being heard to the person concerned.
(2) Omitted |
Comments: By Section 120 of the Finance Act, 2021 section 152 is amended. Thus, after omitting the words “of any individual return or part thereof”, the word “information” attains wider meaning. Furthermore, it is stipulated that, no information obtained under sections 150 and 151 shall be used for the purposes of any proceedings under the Act without giving an opportunity of being heard to the person concerned, in compliance of the principles of natural justice.
| Section 168(2) of the CGST Act, before amendment | Section 168(2) of the CGST Act, after amendment – in sub-section (2), ––
(i) for the words, brackets and figures “sub-section (1) of section 44”, the word and figures “section 44” is substituted; (ii) the words, brackets and figures “sub-section (1) of section 151,” is omitted. |
| 168. Power to issue instructions or directions
(2) The Commissioner specified in clause (91) of section 2, sub-section (3) of section 5, clause (b) of sub-section (9) of section 25, sub-sections (3) and (4) of section 35, sub-section (1) of section 37, sub-section (2) of section 38, sub-section (6) of section 39, sub-section (1) of section 44, sub-sections (4) and (5) of section 52, , sub-section (1) of section 143, except the second proviso thereof, sub-section (1) of section 151, clause (l) of sub-section (3) of section 158 and section 167 shall mean a Commissioner or Joint Secretary posted in the Board and such Commissioner or Joint Secretary shall exercise the powers specified in the said sections with the approval of the Board. |
(2) The Commissioner specified in clause (91) of section 2, sub-section (3) of section 5, clause (b) of sub-section (9) of section 25, sub-sections (3) and (4) of section 35, sub-section (1) of section 37, sub-section (2) of section 38, sub-section (6) of section 39, section 44, sub-sections (4) and (5) of section 52, , sub-section (1) of section 143, except the second proviso thereof, clause (l) of sub-section (3) of section 158 and section 167 shall mean a Commissioner or Joint Secretary posted in the Board and such Commissioner or Joint Secretary shall exercise the powers specified in the said sections with the approval of the Board. |
Comments: By Section 121 of the Finance Act, 2021, certain amendments brought in to section 168 (2) as necessitated by the amendments made to section 44 (Annual return) and section 151(Power to collect statistics).
| Schedule II of the CGST Act, paragraph 7, before amendment | In Schedule II of the CGST Act, paragraph 7, after amendment
Paragraph is omitted: (with effect from the 1st day of July, 2017) |
| Schedule II – Activities to be treated as supply of goods or supply of services
(7). Supply of Goods. The following shall be treated as supply of goods, namely:- |
(7) Omitted
(with effect from the 1st day of July, 2017) |
Comments: By Section 122 of the Finance Act, 2021, Entry 7 in Schedule ll is omitted and simultaneously incorporated the same, more effectively under section 7 (Scope of supply) of the CGST Act.
Amendments in Integrated Goods & Services Tax Act (IGST ACT) By Central Finance Act, 2021
| Section 16 of the IGST Act, before amendment | Section 16 of the IGST Act, after amendment – Subsection (1) & (3) partially substituted as below |
| Section 16 – Zero rated supply
(1) “zero rated supply” means any of the following supplies of goods or services or both, namely: –– (a) export of goods or services or both; or (b) supply of goods or services or both to a Special Economic Zone developer or a Special Economic Zone unit. (2) Subject to the provisions of sub-section (5) of section 17 of the Central Goods and Services Tax Act, credit of input tax may be availed for making zero-rated supplies, notwithstanding that such supply may be an exempt supply. (3) A registered person making zero rated supply shall be eligible to claim refund under either of the following options, namely: –– (a) he may supply goods or services or both under bond or Letter of Undertaking, subject to such conditions, safeguards and procedure as may be prescribed, without payment of integrated tax and claim refund of unutilised input tax credit; or (b) he may supply goods or services or both, subject to such conditions, safeguards and procedure as may be prescribed, on payment of integrated tax and claim refund of such tax paid on goods or services or both supplied, in accordance with the provisions of section 54 of the Central Goods and Services Tax Act or the rules made thereunder. |
(1) “zero rated supply” means any of the following supplies of goods or services or both, namely: ––
(a) export of goods or services or both; or (b) supply of goods or services or both for authorised operations to a Special Economic Zone developer or a Special Economic Zone unit. (No change) “(3) A registered person making zero rated supply shall be eligible to claim refund of unutilised input tax credit on supply of goods or services or both, without payment of integrated tax, under bond or Letter of Undertaking, in accordance with the provisions of section 54 of the Central Goods and Services Tax Act or the rules made thereunder, subject to such conditions, safeguards and procedure as may be prescribed: Provided that the registered person making zero rated supply of goods shall, in case of non-realisation of sale proceeds, be liable to deposit the refund so received under this sub-section along with the applicable interest under section 50 of the Central Goods and Services Tax Act within thirty days after the expiry of the time limit prescribed under the Foreign Exchange Management Act, 1999 for receipt of foreign exchange remittances, in such manner as may be prescribed. 42 of 1999. (4) The Government may, on the recommendation of the Council, and subject to such conditions, safeguards and procedures, by notification, specify–– (i) a class of persons who may make zero rated supply on payment of integrated tax and claim refund of the tax so paid; (ii) a class of goods or services which may be exported on payment of integrated tax and the supplier of such goods or services may claim the refund of tax so paid.”. |
Comments: By Section 123 of the Finance Act, 2021, section 16 of the IGST Act is amended. Zero rated supply, after amendment, means export of goods or services or both; or supply of goods or services or both for authorised operations to a Special Economic Zone developer or to a Special Economic Zone. By amendment the word “authorised operations” is inserted in to the definition by which the claim of exemptions/refunds are restricted to the authorised operations only in connection with supply to SEZ/SEZ developer.
Moreover, before amendment, as per section 16(3) of IGST Act, 2017 there are two options for claiming refund of accumulated input tax credit (ITC):
- Making supplies without payment of integrated tax under bond or LUT (Letter of Undertaking) and claiming accumulated ITC based on formula mentioned in Rule 89(3) of CGST Act, 2017.
- Making supplies with payment of integrated tax and claiming refund thereof;
After substitution of the new subsection (3) to section 16, it restricts the zero-rated supply on payment of integrated tax only to a notified class of taxpayers or notified supplies of goods or services. Further, it is stipulated that, in case of a refund without payment of integrated tax, the foreign realization shall be received on or before the time limit prescribed in the Foreign Exchange Management Act, 1999 (FEMA, 1999). On non-realization on such foreign exchange, the applicant shall be liable to deposit the refund within thirty days after expiry of the time limit given in FEMA, 1999, along with the interest as mentioned in Section 50 of CGST Act, 2017. (The option available to the exporters to export the goods or services on payment of IGST under refund claim is still available at present. The condition providing for the exports mandatorily under LUT or Bond inserted in S.16 of the IGST Act, 2017 by the Finance Act, 2021 has not yet come into effect).
Notes: As per Section.1(2)(b) of the Finance Act,2021, the provisions of Sextions108 to 123 of the Act (FA,2021) shall come into force on such date as may be appointed by the Central Government by notification in the Official Gazette.
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Author/Blogger: Aji V. Dev, Advocate, High Court of Kerala at Aji V. Dev & Associates, Ernakulam, Kochi, available at ajivdev@yahoo.co.in/advajivdev@gmail.com/9447788404
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Super thanks sir