Analysis of CGST 10th Amendment Rules, 2021

CGST 10^th Amendment Rules, 2021

Introduction

CGST rules have been amended for the 10^th time in 2021 vide Notification No. 40/2021 CT dated 29.12.2021.

List of Rules Amended / inserted

S. No	Rule	Title	Chapter
1	36(4)	Conditions for claiming Input Tax Credit	Input Tax Credit
2	80(1A)	Annual Return	Returns
3	80(3A)	Annual Return	Returns
4	95(3)(c) proviso	Refund of tax to certain persons	Refund
5	142(3)	Notice and order for demand of amounts payable under the Act	Demand and Recovery
6	142(5)	Notice and order for demand of amounts payable under the Act	Demand and Recovery
7	144A	Recovery of penalty by sale of goods or conveyance detained or seized in transit	Demand and Recovery
8	154	Disposal of Proceeds of sale of goods or conveyance and movable or immovable property	Demand and Recovery
9	159(2)	Provisional Attachment of Property	Demand and Recovery
10	159(3)	Provisional Attachment of Property	Demand and Recovery

*Rules marked in red are inserted

Let us see each rule in detail.

1. Rule 36(4): Conditions for claiming Input Tax Credit e.f. 01.01.2022

Before Amendment

After Amendment

ITC to be availed by a registered person to the extent of (i) eligible credit in respect of invoices or debit notes which have been uploaded by the suppliers in section 37 in the statement of outward supplies in Form GSTR 1 or using IFF (+) (ii) 5% of the eligible credit in respect of invoices or debit notes which have been uploaded by the suppliers in section 37 in the statement of outward supplies in Form GSTR 1 or using IFF. Total 105% of eligible credit in respect of invoices or debit notes which have been uploaded by the suppliers in section 37 in the statement of outward supplies in Form GSTR 1 or using IFF (or) Actual Credit Whichever is lower can be taken.

ITC to be availed by a registered person to the extent of (i) eligible credit in respect of invoices or debit notes which have been uploaded by the suppliers in section 37 in the statement of outward supplies in Form GSTR 1 or using IFF; and (ii) the details of such invoices or debit notes have been communicated to the registered person in Form GSTR 2B under rule 60(7). ITC can be taken only to the extent of eligible credits which have been furnished by suppliers in section 37 in the statement of outward supplies in Form GSTR 1 or using IFF. Extra 5% of eligible credit which was available before amendment is now ruled out.

2. Rule 80(1A) inserted

For FY 2020-21, the due date for furnishing Annual Return (GSTR 9 / GSTR 9A) has been extended to 28^th Feb 2022 from 31^st Dec 2021.

3. Rule 80(3A) inserted

For FY 2020-21, due date for self – certified reconciliation statement (GSTR 9C) has been extended to 28^th Feb 2022 from 31^st Dec 2021.

4. Rule 95(3)(c) proviso inserted w.e.f. 01^st April 2021 retrospectively

To whom this applies?

A specialized agency of the United Nations Organisation or any Multilateral Financial Institution and Organisation notified under the United Nations (Privileges and Immunities) Act, 1947, Consulate or Embassy of foreign countries or any other person or class of persons as notified under section 55.

Provision

Where the UIN of above persons is not mentioned in tax invoice, the refund of tax paid by the applicant on such invoice shall be available only if the copy of the invoice, duly attested by the authorized representative of the applicant, is submitted along with the refund application in Form GST RFD – 10

5. Rule 142(3): Notice and order for demand of amounts payable under the Act w.e.f. 01.01.2022

Section 129(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 CGST 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 detention or seizure and after detention or seizure, shall be released, –

Owner of the goods comes forward for payment of tax and penalty	Owner of the goods does not come forward for payment of tax and penalty
On payment of penalty equal to 200% of the tax payable on such goods and, in case of exempted goods, on payment of an amount equal to two percent of the value of goods or Rs. 25,000 whichever is less.	On payment of penalty equal to 50% of the value of the goods or 200% of the tax payable on such goods goods, whichever is higher, in case of exempted goods, on payment of an amount equal to 5% of the value of goods or Rs. 25,000/- whichever is less.

Section 129(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 section 129(1)(a) or 129(1)(b).

Amended Section 142(3)

Where the person concerned makes payment of the amount referred to in section 129(1) within fourteen days of detention or seizure of the goods and conveyance seven days of the notice under section 129(3) but before the issuance of order under section 129(3), he shall intimate the proper officer of such payment in Form GST DRC – 03 and the proper officer shall issue an order in Form GST DRC – 05 concluding the proceedings in respect of the said notice.

6. Rule 142(5): Notice and order for demand of amounts payable under the Act w.e.f. 01.01.2022

A summary of the order issued under section 52 or section 62 or section 63 or section 64 or section 73 or section 74 or section 75 or section 76 or section 122 or section 123 or section 124 or section 125 or section 127 or section 129 or section 130 shall be uploaded electronically in Form GST DRC – 07, specifying therein the amount of tax, interest and penalty payable by the person chargeable with tax concerned.

7. Rule 144A inserted: Recovery by sale goods or conveyance detained or seized in transit w.e.f. 01.01.2022

Rule 144A(1)

Where the person transporting any goods or the owner of such goods fails to pay the amount of penalty under section 129(1) within fifteen days from the date of receipt of the copy of the order passed under section 129(3), the proper officer shall proceed for sale or disposal of the goods or conveyance so detained or seized by preparing an inventory and estimating the market value of such goods or conveyance.

Rule 144A(1) Proviso

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.

Rule 144A(2)

The said goods or conveyance shall be sold through a process of auction, including e-auction, for which a notice shall be issued in FORM GST DRC-10 clearly indicating the goods or conveyance to be sold and the purpose of sale:

Rule 144A(2) Proviso

Where the person transporting said goods or the owner of such goods pays the amount of penalty under section 129(1), including any expenses incurred in safe custody and handling of such goods or conveyance, after the time period mentioned in rule 144A(1) but before the issuance of notice in Form GST DRC – 10 under this sub-rule, the proper officer shall cancel the process of auction and release such goods or conveyance.

Rule 144A(3)

The last day for submission of bid or the date of auction shall not be earlier than fifteen days from the date of issue of the notice in Form GST DRC – 10 referred to in sub-rule (2):

Rule 144A(3) Proviso

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.

Rule 144A(4)

The proper officer may specify the amount of pre-bid deposit to be furnished in the manner specified by such officer, to make the bidders eligible to participate in the auction, which may be returned to the unsuccessful bidders, forfeited in case the successful bidder fails to make the payment of the full amount, as the case may be.

Rule 144A(5)

The proper officer shall issue a notice to the successful bidder in FORM GST DRC-11 requiring him to make the payment within a period of fifteen days from the date of auction:

Rule 144A(5) Proviso

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.

Rule 144A(6)

On payment of the full bid amount, the proper officer shall transfer the possession and ownership of the said goods or conveyance to the successful bidder and issue a certificate in FORM GST DRC-12.

Rule 144A(7)

The proper officer shall cancel the process and proceed for re-auction where no bid is received or the auction is considered to be non-competitive due to lack of adequate participation or due to low bids.

Rule 144A(8)

Where an appeal has been filed by the person under the provisions of sub-section (1) read with sub-section (6) of section 107, the proceedings for recovery of penalty by sale of goods or conveyance detained or seized in transit under this rule shall be deemed to be stayed:

Rule 144A(8) Proviso

This sub-rule shall not be applicable in respect of goods of perishable or hazardous nature.

8. Rule 154 substituted: Disposal of proceeds of sale of goods or conveyance and movable or immovable property w.e.f. 01.01.2022

Rule 154(1)

The amounts so realised from the sale of goods or conveyance, movable or immovable property, for the recovery of dues from a defaulter or for recovery of penalty payable under section 129(3) shall, –

(a) first, be appropriated against the administrative cost of the recovery process;

(b) next, be appropriated against the amount to be recovered or to the payment of the penalty payable under section 129(3), as the case may be;

(c) next, be appropriated against any other amount due from the defaulter under the Act or the Integrated Goods and Services Tax Act, 2017 or the Union Territory Goods and Services Tax Act, 2017 or any of the State Goods and Services Tax Act, 2017 and the rules made thereunder; and

(d) the balance, if any, shall be credited to the electronic cash ledger of the owner of the goods or conveyance as the case may be, in case the person is registered under the Act, and where the said person is not required to be registered under the Act, the said amount shall be credited to the bank account of the person concerned;

Rule 154(2)

where it is not possible to pay the balance of sale proceeds, as per clause (d) of sub-rule (1), to the person concerned within a period of six months from the date of sale of such goods or conveyance or such further period as the proper officer may allow, such balance of sale proceeds shall be deposited with the Fund;

9. Rule 159(2) amended: Provisional attachment of property w.e.f. 01.01.2022

Section 83(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 by passing an order in Form GST DRC – 22 to that effect mentioning therein, the details of property which is attached.

Rule 159(2)

The commissioner shall send a copy of the order of attachment in Form GST DRC 22 to the concerned Revenue Authority or Transport Authority or any such Authority to place encumbrance on the said movable or immovable property, which shall be removed only on the written instructions from the commissioner to that effect and a copy of such order shall also be sent to the person whose property is being attached under section 83.

Rule 159(3)

Where the property attached is of perishable or hazardous nature, and if the taxable person person whose property has been attached pays an amount equivalent to the market price of such property or the amount that is or may become payable by the taxable person such person, whichever is lower, then such property shall be released forthwith, by an order in Form GST DRC – 23, on proof of payment.

Rule 159(4)

Where the taxable person such person fails to pay the amount referred to in Rule 159(3) in respect of the said property of perishable or hazardous nature, the Commissioner may dispose of such property and the amount realized thereby shall be adjusted against the tax, interest, penalty, fee or any other amount payable by the taxable person such person.

Rule 159(5)

Any person whose property is attached may, file an objection in Form GST DRC – 22A to the effect that the property attached was or is not liable to attachment, and the Commissioner may, after affording an opportunity of being heard to the person filing the objection, release the said property by an order in Form GST DRC – 23.

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The author ‘CA Deepika Ganesan’ can be reached at deepikaaganesan@gmail.com