Government notifies Sections 119,120,121,122,123,124,126,127 and 131 of Finance Act, 2020 (12 of 2020) related to GST w.e.f 1st January 2021 vide Notification No 92/2020-Central Tax dated 22nd December 2020. Details of such amendment with reference to CGST Act, 2017 is as follows:-

Section 10 of CGST Act, 2017- Composition Scheme

  • In section 10(2) of the CGST Act, in clauses (b), (c) and (d), after the words “of goods”, the words “or services” shall be inserted
  • Thus, the conditions for eligibility to pay tax under composition are harmonised and certain categories of taxable persons, engaged in making-
    • supply of services not leviable to tax under the CGST Act, or
    • inter-State outward supply of services, or
    • outward supply of services through an e-Commerce operator.
  • Are excluded from the ambit of the Composition scheme.

Section 16(4)- Time limit for taking credit of debit note

  • In section 16(4) of the CGST Act, the words “invoice relating to such” is omitted.
  • Thus, the date of issuance of debit note is delinked from the date of issuance of the underlying invoice for purposes of availing input tax credit.

Cancellation of voluntary registration

  • Section 29(1) of the CGST Act, for clause (c), the following clause shall be substituted, namely:––
  • “(c) the taxable person is no longer liable to be registered under section 22 or section 24 or intends to opt out of the registration voluntarily made under sub-section (3) of section 25:”
  • Thus, now it also provides for cancellation of registration which has been obtained voluntarily under section 25(3)

Section 30(1)- Time limit for revocation of cancellation of registration

  • Section 30(1) of the CGST Act (Revocation of cancellation of registration)
    • Time limit of 30 days to apply for revocation of cancellation of registration ,
    • Made extendable by the Additional Commissioner or the Joint Commissioner, as the case may be, for a period not exceeding thirty days and by the Commissioner, for a further period not exceeding thirty days

Section 31- Invoice

  • Section 31(2) of the CGST Act, for the proviso, the following proviso shall be substituted, namely:––
    • “Provided that the Government may, on the recommendations of the Council, by notification,–– (a) specify the categories of services or supplies in respect of which a tax invoice shall be issued, within such time and in such manner as may be prescribed; (b) subject to the condition mentioned therein, specify the categories of services in respect of which–– (i) any other document issued in relation to the supply shall be deemed to be a tax invoice; or (ii) tax invoice may not be issued.”.

TDS- Section 51(3) & (4)

  • Section 51 of the CGST Act,–– (a) for sub-section (3), the following sub-section shall be substituted, namely:–
  • “(3) A certificate of tax deduction at source shall be issued in such form and in such manner as may be prescribed.
  • Earlier sub-sections (3) and (4) which provided for requirement of issuing TDS certificate on deductor and provision for late fees for not issuing such certificate with in five days are deleted

Amendment of section 122

  • In section 122 of the CGST, after sub-section (1), the following sub-section shall be inserted, namely:––
  • “(1A) Any person who retains the benefit of a transaction covered under clauses (i), (ii), (vii) or clause (ix) of sub-section (1) and at whose instance such transaction is conducted, shall be liable to a penalty of an amount equivalent to the tax evaded or input tax credit availed of or passed on.
  • Thus, it makes the beneficiary of the transactions of passing on or availing fraudulent Input Tax Credit liable for penalty similar to the penalty leviable on the person who commits such specified offences.

Amendment of section 132

  • Section 132 of the CGST Act, in sub-section (1),––

(i) for the words “Whoever commits any of the following offences”, the words “Whoever commits, or causes to commit and retain the benefits arising out of, any of the following offences’’ shall be substituted;.

(ii) for clause (c), the following clause shall be substituted, namely:–– “(c) avails input tax credit using the invoice or bill referred to in clause (b) or fraudulently avails input tax credit without any invoice or bill;”;

(iii) in sub-clause (e), the words “, fraudulently avails input tax credit” shall be omitted.

Amendment to Schedule II

  • In Schedule II to the CGST Act, in paragraph 4, the words
  • “whether or not for a consideration,” at both the places where they occur, shall be omitted and shall be deemed to have been omitted with effect from the 1st day of July 2017.
  • Schedule II cannot include a transaction, without consideration, because then it would not be a supply at all in the first place. Schedule II, issued under section 7(1)(d) is meant only for the purpose of classification of a transaction either as a supply of goods or as a supply of services
  • Thus, para 4 is being corrected retrospectively from 1st July 2017.

(Department of Revenue)
New Delhi,

Notification No. 92/2020-Central Tax

Dated 22nd December, 2020

S.O. 4643(E).—In exercise of the powers conferred by sub-section (2) of section 1 of the Finance Act, 2020 (12 of 2020) (hereinafter referred to as the said Act), the Central Government hereby appoints the 1st day of January, 2021, as the date on which the provisions of sections 119, 120, 121, 122, 123, 124, 126, 127 and 131 of the said Act shall come into force.

[F.No. CBEC-20/06/04/2020-GST]


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