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The Budget for infrastructure, connectivity and vision but lacks growth-invigorating proposals.

A budget with big hopes for streamlining the GST Law, GST Rate balancing but received only Retrospective amendments. Budget for scrapping self-assessment for availing Input Tax Credit (ITC), ending constitutional right under self-assessment to assess GST.

Lets have a look at the Amendments in respect of GST Law and Rules proposed through the Finance Bill, 2022. Clause 99 to 123 of Finance Bill 2022 proposes changes in GST law as follows-

Finance Bill clause 99 to 113 will come into effect from a date to be notified and clause 114 to 123 will come into effect on the date of its enactment.

1. Additional Condition has been imposed for availment of ITC u/s 16(2)- ITC can be availed only if the same is not restricted under Section 38 – as per the details communicated to the purchaser in GSTR-2B. Clause 99.

2. ITC availment: Now ITC Credit will be available till 30th November for the following financial year. (Time-limit to avail ITC u/s 16(4) extended till 30th November of next year from 30th September.) Clause 99.

3. Composition dealer registration cancellation dependent on non- filing of GST returns Section 10 Composition Taxpayers Registration can be cancelled suo-moto if they have not filed their GSTR-4 return beyond 3 months from the due date. (Clause 100).

4. Non-composition tax payer registration cancellation on non-filing of GST returns Registration of a person, other than those paying tax under section 10, can be cancelled if has not furnished returns for such continuous tax period as may be prescribed. (Clause 100)

5. Extension in time limit to issue of Credit Notes in respect of supply made in a financial year can be issued by 30th November of next financial year (currently allowed till 30th September).  (Clause 101)

6. GSTR 1/ GSTR-3B rectification allowed till 30th November Any rectification of error in GSTR-1/ GSTR-3B is now permitted till 30th November of next financial year (currently allowed till 30th September). (Clause 104.)

7. GST Outward Supply process to be amended

  • Sub Section 2 of Section 37 of CGST omitted by giving away with two way communication process in Return filing.  Now filing of details of outward supplies for a tax period on a sequential basis.   Now, you cannot file GSTR-1 for Current period if no GSTR-1 for the earlier period is not filed.  Rectification of error in GSTR-1 is now permitted till 30th November of next financial year (currently allowed till 30th September). (Clause 102)

8. Section 38 of the CGST Act is being substituted for prescribing the manner as well as conditions and restrictions for communication of details of inward supplies and input tax credit to the recipient by means of an auto-generated statement and to do away with two-way communication process in return filing.  (Clause 103).

9.  The due date for filing return under Section 39 (5), by a non-resident taxable person is prescribed as the 13th day of next month.  (Clause 104)

10.  Section 41 of the CGST Act is being substituted so as to do away with the concept of “claim” of ITC on a “provisional” basis and to provide for availment of self-assessed input tax credit. No ITC in case the supplier does not pay GST. (Clause 105)

11. Sections 42, 43 and 43A of the CGST Act are being omitted so as to do away with two-way communication process in return filing. (Clause 106)

12. Section 47 of the CGST Act is being amended so as to provide for levy of late fee for delayed filing of TCS returns under section 52. (Clause 107)

13. ITC availment on self-assessment basis

  • Section 49 of the CGST Act is being amended so as to provide for prescribing restrictions for utilizing the amount available in the electronic credit ledger.
  • Section 49 of the CGST Act is being amended so as to allow transfer of amount available in electronic cash ledger under the CGST Act of a registered person to the electronic cash ledger under the said Act or the IGST Act of a distinct person.
  • Section 49 of the CGST Act is being amended so as to prescribe the maximum proportion of output tax liability which may be discharged through the electronic credit ledger.

Budget 2022-23 - 18 Changes in GST you must Know

14. Interest to be levied on ITC wrongly availed and utilized. If ITC is not utilized, then interest will not be levied. Section 50(3) substituted retrospectively w.e.f. 01.07.2017. (Clause 110)

15. Section 54 dealing with refund is being amended

  • Explicit refund claim of any balance lying in Electronic Cash ledger under Section 54.
  • Time limit of 2 years provided for claiming tax refund on inward supplies of both goods or services u/s 55, from the last day of the quarter in which said supply was received. (Clause 112)

16. GST portal notified

Notified Retrospectively as the common portal for all the functions provided under CGST Rules 2017 except for E way bill generation and for generation of invoices under Rule 48(4), (E- Invoicing) of CGST Rules. (Clause 114)

17. Rate of Interest under Section 50(3) (Reversal of Excess ITC wrongly availed and utilized) prescribed as 18% in all cases. (Clause No. 115)

18.  GST Rates …

  • unintended waste generated during the production of fish meal (falling under heading 2301), except fish oil, is being exempted during the period commencing from the 1st day of July, 2017, and ending with the 30th day of September, 2019 (both days inclusive), subject to the condition that if said tax has been collected, the same would not be eligible for refund.
  • Service by way of grant of alcoholic liquor license, against consideration in the form of license fee or application fee or by whatever name it is called by the State Governments, has been declared as an activity or transaction which shall be treated neither as a supply of goods nor a supply of service. Retrospectively w.e.f. 01.07.2017. However, no refund shall be made of tax which has been collected, but which would not have been so collected, had the said notifications been in force at all material times.


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April 2024