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Changes in CGST Act effective w.e.f 1st January 2022

(Notification No. 39/2021-Central tax dated 21st December 2021)

GST on supply by any Club or Association to its Members

♦ In the CGST Act, 2017, in section 7 (1)(a), the following clause (aa) and Explanation inserted and shall be deemed to have been inserted with effect from 1st July 2017, namely:––

“(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;”.

♦ The person (Other than an individual) 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.

Conditions for claiming ITC

  • In section 16(2) of the CGST Act, after clause (a), the following clause (aa) inserted-
    • “(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;”
  • Thus, ITC to be availed only for those invoices whose details are reflected in GSTR-2B i.e the respective suppliers (vendors) have filed their GSTR-1
  • Explanation clause to section 74(1)(ii) substituted-
    • (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.
  • Thus, conclusion of proceedings will lead to conclusion of proceedings u/s. 73 or 74 and the proceedings u/s. 122 and 125 but not the proceedings u/s. 129 and 130.
  • This makes seizure and confiscation of goods and conveyances in transit a separate proceeding from the recovery of tax.

Changes in CGST Act effective w.e.f 1st January 2022

Self assessed tax

  • Explanation clause to section 75(12) inserted-
    • ‘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.
  • Thus, any tax reflected in GSTR-1, but not shown in GSTR 3B shall be considered as self-assessed tax and shall be liable to be recovered straightaway under section 79

Provisional Attachment under section 83

  • Section 83(1) of the CGST Act substituted as under ––
    • Where after the initiation during the pendency of any proceedings under section 62 or section 63 or section 64 or section 67 or section 73 or section 74 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 subsection (1A) of section 122, in such manner as may be prescribed

Appeal in case of detention and seizure of goods and conveyance

  • In section 107(6) of the CGST Act, 2017, the following proviso inserted ––
    • “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.”
  • The pre-deposit prior to this amendment was only to the extent of 10% of Tax Liability in case of dispute which is now enhanced to 25% of the penalty amount in case of detention and seizure of goods and conveyance during transit.

Changes in section 129

  • Section 129(1) (a) & (b) substituted as-
    • (a) on payment of applicable tax and penalty equal to one 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 applicable tax and penalty equal to fifty per cent of the value of the goods reduced by the tax amount paid thereon and 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”
  • Section 129 (2) deleted; Section 129(3) & (4) substituted as-
    • (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 conveyance shall issue a notice within seven days of such detention or seizure, specifying the tax and 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 tax, interest or penalty shall be determined under sub section (3) without giving the person concerned an opportunity of being heard.
  • Section 129(6) substituted as under:
    • Where the person transporting any goods or the owner of such goods fails to pay the amount of tax and penalty under sub-section (1) within fourteen of such detention or seizure, further proceedings shall be initiated in accordance with the provisions of section 130 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)
  • 1st Proviso to Section 129 inserted as-
    • Provided that the conveyance shall be released on payment by the transporter of penalty under subsection (3) or one lakh rupees, whichever is less
  • 2nd proviso to section 129 substituted as –
    • 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 fourteen fifteen days may be reduced by the proper officer.
  • Instead of 100% tax and 100% penalty, now penalty of 200% of tax payable is applicable
  • To file appeal, 25% of penalty i.e 50% of tax amount
  • Transporter can get the conveyance released on payment of penalty or Rs. 1 lakh w/ever is less
  • The proceedings under section 129 relating to detention, seizure and release of goods and conveyances in transit, delinked from the proceedings under section 130 relating to confiscation of goods or conveyances and levy of penalty.

Changes in section 130

  • The proceedings under section 130 relating to confiscation of goods or conveyances and levy of penalty delinked from the proceedings under section 129 relating to detention, seizure and release of goods and conveyances in transit.
  • Penalty of 100% of tax payable is applicable ( Section 130 (2) amended)

Power to call for information and restrictions on its disclosure

  • Section 151 of the CGST Act 2017 amended so as to empower the jurisdictional commissioner to call for information from any person relating to any matters dealt with in connection with the Act
  • Section 168 of the CGST Act, 2017 amended so as to enable the jurisdictional commissioner to exercise powers under section 151 to call for information
  • Section 152(1) of the CGST Act, 2017 amended so as to provide 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
  • For section 151 of the CGST Act, the following section substituted ––
    • “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.”.
  • Reference to section 151 omitted from section 168 (2)
  • Thus, the jurisdictional commissioner can call for information under section 151

Bar on disclosure of information

  • In section 152 of the CGST Act, following changes made ––

(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 without giving an opportunity of being heard to the person concerned.

(b) Following sub-section (2) omitted .

(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.

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One Comment

  1. Sonali Shivalkar says:

    which month return ? it is of Dec21 GSTR3b return or Jan22 GSTR3b return ITC rule as per 2B to be claimed .
    It is mentioned w.e.f from 1 st Jan 2022 .

    Please clarify.

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