Key amendments proposed in Central Goods and Services Tax Act, 2017 (‘CGST Act’):

-An additional condition inserted in Section 16 to specifically provide that ITC can be availed only if the invoices/ debit notes are furnished by the supplier in its GSTR-1 and such details have been communicated to the recipient as per section 37

-Mandatory requirement provided under Section 35(5) for getting annual accounts audited and the reconciliation statement submitted by specified professional (subject to condition) has been removed

-The requirement of furnishing GSTR-9 Annual return form to be replaced with a self-certified reconciliation statement.

-Provision for charging interest on net-cash liability (inserted by the Finance Act 2019 in Section 50) has been retrospectively made applicable from 01 July 2017.

-Jurisdictional commissioner empowered to call for information from any person relating to any matters dealt with in connection with the Act and use of such information would be subject to providing an opportunity of being heard to concerned person.

-Scope of “Supply” term provided under Section 7 further widened to include transactions involving supply of goods or services by any person, other than an individual, to its members or constituents or vice-versa, for a consideration. For this purpose, supplier and the recipient shall be deemed as two separate persons. The same is proposed to be retrospectively applied from 1 July 2017.

-Proceedings involving seizure and confiscation of goods and conveyances in transit to be treated as a separate proceeding from the recovery of tax.

-Appeal against the order of adjudicating authority in relation to seizure and confiscation of goods and conveyances in transit (provided by Section 129) can be made only if 25% of penalty is paid by the appellant.

-Provisions relating to detention, seizure and release of goods and conveyances in transit as provided under Section 129 and those relating to confiscation of such goods or conveyances have been de-linked; post which proceedings initiated and penalty imposed under both sections would be identical

► Key amendments proposed in Integrated Goods and Services Tax Act, 2017 (‘IGST Act’):

  • The option to make zero rated supply on payment of integrated tax would be restricted only to specified class of taxpayers or specified supplies of goods or services, to be notified in due course.
  • The foreign exchange remittance in case of export of goods would be linked with refunds claimed on such supplies.
  • Zero rating of supplies made to special economic zone would be valid only when such supplies are for authorised operations

► Key amendments proposed in Customs Act, 1962:

  • Review of more than 400 old customs exemptions proposed through extensive consultations from 1st October 2021. A revised customs duty structure is proposed to be placed free of distortions.
  • Any new customs duty exemption henceforth will have validity up to the 31st March following two years from the date of its issue.

The views expressed herein are the views of the authors and cannot be used in framing of opinions or for the purpose of compliance without an independent evaluation.

Authors can be reached at:– [email protected]

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February 2021