Follow Us :

Hello readers, Amendments enacted by Finance Act 2022 become effective from 01.10.2022. Lets try to understand in simplified manner-

1. Restrictions imposed for availing ITC-

New clause (ba) inserted in Sec 16(2) – Additional condition for claiming ITC  by buyer that ITC  can be claimed only if that ITC has not been restricted in auto generated statement -GSTR-2B u/s 38 of CGST ACT.

Now what are the  restrictions imposed u/s 38 CGST ACT 2017

√ ITC which cannot be availed such as-

1. Related to suppliers who have taken new registration for such period as may be prescribed.

2. Related to suppliers who have defaulted in payment of tax and default continues for such period as may be prescribed.

3. Related to suppliers who have declared output tax liability more in GSTR-1 but paid tax less in GSTR-3B.

4. ITC claimed more than ITC auto-populated in GSTR-2B

5. ITC claimed in violation of conditions prescribed in Section 49 (12)- Maximum proportion of output tax liability which may discharged through electronic credit ledger.

So now genuine buyers will suffer for the default of supplier in paying taxes, if transaction done is genuine one. Now tax credit can claimed only if your supplier is tax-compliant.

2. Time period extended for claiming ITC related to previous financial year-

Section 16(4) amended to provide that time limit for claiming ITC  in respect of Invoices related to previous financial year now extended upto 30th November of following financial year. This amendment also applicable for F.Y 2021-22.

3. Time period for Cancellation of registration –

√ In case of composite taxpayers – Section 29 (2) (b) amended now registration of composite taxpayer will be cancelled if he fails to furnish return for a financial year beyond 3 months from due date.

√ In case of regular taxpayers- Registration will be cancelled if he fails to furnish return for such continuous period as may be prescribed.(presently 6 months)

√ In case of registered person under QRMP scheme -registration will be cancelled if not furnished returns for continuous two tax periods.

4. Extension of time limit for issuing credit note -Section 34 of CGST ACT-

Now time limit for issuing credit note now extended up to 30th Nov of following financial year.

5. Amendment in Section 37- Return of outward supply- Now amendment in Section 37 also made regarding rectification of errors related to previous year up to 30th November of following financial year.

Also , Now it is mandatory to file sequential returns i.e. Return of October month cannot filed if return of September month not filled.

6. Refund of any balance in cash ledger – Now registered person can claim any balance in Cash ledger in such form and manner as may be prescribed.

7. Levy of late fees for not filling GSTR-8 with in due date -Rs 100 per day subject to maximum of Rs 5000 .

8. Transfer any amount of tax ,interest and penalty or any other amount available in electronic cash ledger to IGST /CGST of a distinct person as specified in sec 25(4) or Sec 25(5) in such form and manner subject to such conditions and restrictions as may be prescribed and such transfer shall be deemed to  be refund from cash ledger.

9. Registration can be cancelled if rule 86B not compiled with i.e compulsory payment of 1 % output tax liability in cash.( Section 49 (12) notified).

That’s all for today – any query related to above mailed at

Join Taxguru’s Network for Latest updates on Income Tax, GST, Company Law, Corporate Laws and other related subjects.

Leave a Comment

Your email address will not be published. Required fields are marked *

Search Post by Date
April 2024