Implementation of Recommendations of 48th GST Council Meeting

1. Reversal of ITC in case of non-payment of tax by the supplier by a specified date and mechanism for re-availment.

• Rule 37(1) of the CGST Rules is amended w.e.f 01.10.2022 to provide that a registered person, who fails to pay to the supplier, the amount towards the value of such supply (wholly or partly) along with the tax payable thereon, within the time limit, shall pay or reverse an amount equal to the ITC availed in respect of such supply proportionate to the amount not paid to the supplier along with interest
• New Rule 37A of the CGST Rules inserted w.r.t. reversal of ITC by a registered person in the event of non-payment of tax by the supplier by the specified date and mechanism for re- availment of such credit, if the supplier pays tax subsequently

For more details, please refer to Notification No. 26/2022-Central Tax dated 26.12.2022

2. Now Unregistered persons can claim refund of amount of tax borne by them in the event of cancellation of the contract/agreement for supply of services of construction of flat/building or on termination of long-term insurance policy

>> New Rule 89(2)(ka) inserted in CGST Rules, specifying that the refund application shall be accompanied by a statement containing the details of invoices, in respect of which refund is being claimed along with the prescribed document

>> New Rule 89(2)(kb) inserted to prescribe furnishing of certificate issued by the supplier to be accompanied by the refund application filed by the Unregistered person

>> New provision to Rule 89(2)(m) inserted to provide that a certificate is not required to be furnished in cases where refund is claimed by an unregistered person who has borne the incidence of tax

>> Suitable amendment has been done in Form GST RFD-01 so as to allow the refund for unregistered person

>> Circular issued to prescribe manner of filing of application of Refund by Unregistered persons

For more details, please refer to Notification No. 26/2022-Central Tax dated 26.12.2022 and Circular No.188/20/2022-GST dated 27.12.2022

 3. Facility for Taxpayers for withdrawal of appeal up to certain specified stage

> Now an appellant may file an application for withdrawal of an appeal, at any time before issuance of show cause notice or before issuance of the order;

Where the final acknowledgment in Form GST APL-02 has been issued, the withdrawal of the said appeal would be subject to the approval of the appellate authority who shall dispose the withdrawal of the appeal within 7 days of filing of such application

> New FORM GST APL-01/03W has been inserted for the application for withdrawal of appeal application

For more details, please refer to Rule 109C of CGST Rules, 2017, read with Notification No. 26/2022-Central Tax dated 26.12.2022

4. Verification process for completion of GST registration application via biometric based Aadhar authentication and photograph only applicable to the state of Gujarat.

CBIC has notified that Rule 8 (4A) of the CGST Rules, which provides that Verification process for completion of GST registration application via biometric-based Aadhaar authentication and taking photograph of the applicant along with verification of the documents in FORM GST REG-01, shall be applicable in State of Gujarat only

For more details, please refer to Notification No. 26/2022-Central Tax, and Notification No. 27/2022-Central Tax both dated 26.12.2022

5. Proper officer may cancel the registration on a request made in writing by a registered person.

→ Rule 12(3) of the CGST Rules amended to prescribe that that the proper officer may cancel the registration on a request made in writing by a registered person

→  Corresponding changes have also been made in Form GST REG-19

For more details, please refer to Notification No. 26/2022-Central Tax dated 26.12.2022

6. PAN-linked mobile number and email address to be captured in Form GST REG-01 and OTP based verification to be conducted at the time of registration

→ Now declaration of mobile number and e-mail address by the person applying for the GST Registration is not required

→ Permanent Account Number (PAN) shall be verified through separate OTPs sent to the mobile number and e-mail address linked to the Permanent Account Number

→ Amended Part A of Form GST REG-01 to state that Email id and mobile number shall be autopopulated from the Income Tax data base as linked with the PAN of the applicant

For more details, please refer to Notification No. 26/2022-Central Tax dated 26.12.2022

7. CBIC has prescribed the manner of dealing with differences in liability reported in statement of outward supplies and that reported in return

• New Rule 88(C) of the CGST Rules has been introduced to prescribe the manner of dealing with difference in liability reported in Statement of outward supplies and that reported in the Return
• New FORM GST DRC-01B Part A inserted for intimation of difference in liability reported in statement of outward supplies and that reported in return and Part B for reply by Taxpayer in respect of the intimation of difference of liability
• New Rule 59(6)(c) of the CGST Rules has been inserted specifying that where a registered person, to whom an intimation has been issued on the common portal in respect of a tax period, shall not be allowed to furnish the details of outward supplies of goods or services or both under section 37 of CGST Act, 2017 in FORM GSTR-1 or using the invoice furnishing facility for a subsequent tax period, unless he has either deposited the amount specified in the said intimation or has furnished a reply explaining the reasons for any amount remaining unpaid

For more details, please refer to Rule 59(6)(c) and Rule 88 (C) of CGST Rules, 2017 and Notification No. 26/2022-Central Tax dated 26.12.2022 and Circular Taxability of No Claim Bonus & applicability of GST e-invoicing

8. Clarification issued on Taxability of `No Claim Bonus’ (NCB) offered by Insurance companies

> It is clarified that No Claim Bonus (NCB) cannot be considered as a supply provided by the insured to the insurance company

> It is also clarified that NCB is a permissible deduction for the purpose of calculation of value of supply of the insurance services provided by the insurance company to the insured

> Accordingly, where the deduction on account of No Claim Bonus is provided in the invoice issued by the insurer to the insured, GST shall be leviable on actual insurance premium amount, payable by the policyholders to the insurer, after deduction of NCB mentioned on the invoice

9. Clarification issued on applicability of e-invoicing w.r.t. an entity

> It is hereby clarified that the said exemption from generation of e-invoices is for the entity as a whole and is not restricted by the nature of supply being made by the said entity

For more details, please refer to Circular No. 186/18/2022-GST dated 27.12.2022

10. CBIC clarification on the entitlement of ITC where the place of supply is determined in terms of the proviso to section 12(8) of the IGST Act

In case of supply of services by way of transportation of goods, including by mail or courier, where the transportation of goods is to a place outside India, and where the supplier and recipient of the said supply of services are located in India, it is clarified that

√ The place of supply is the concerned foreign destination where the goods are being transported,

√ The recipient of such supply of services shall be eligible to avail input tax credit in respect of the IGST so charged by the supplier, subject to the fulfilment of other conditions laid down in section 16 and 17 of the CGST Act

√  The supplier of service shall report place of supply of such service by selecting State Code as “96-Foreign Country” from the list of codes in the drop-down menu available on the portal in Form GSTR -1

For more details, please refer to Circular No.184/16/2022-GST dated 27.12.2022

11. Clarification issued regarding the treatment of statutory dues under GST law in respect of the taxpayers for whom the proceedings have been finalised under Insolvency and Bankruptcy Code, 2016

In case the government dues against any person under CGST Act are reduced as a result of any appeal then an intimation in FORM GST DRC-25 for such reduction of government dues has to be given by the Commissioner to such person and to the appropriate authority with whom the recovery proceedings are pending

For more details, please refer to Circular No. 187/19/2022-GST dated 27.12.2022

12. CBIC has issued a clarification w.r.t. the applicability of provisions of section 75(2) of the CGST Act, 2017 and its effect on limitation

It is clarified that the proper officer is required to issue the order of redetermination of tax, interest and penalty payable within a period of two years from the date of communication of the said direction by appellate authority or appellate tribunal or the court, as the case may be

For more details, please refer to Circular No.185/17/2022- GST dated 27.12.2022

13. Clarification issued to deal with difference in Input Tax Credit (ITC) availed in Form GSTR-3B as compared to that detailed in Form GSTR 2A for FY 2017-18 and 2018-19

• Circular No. 183/15/2022-GST dated 27.12.2022 issued to clarify the manner of dealing with discrepancies between the amount of ITC availed by the registered persons in their Form GSTR-3B and the amount as availed in their Form GSTR-2A during FY 2017-18 and FY 2018-19

• These instructions will apply only to the ongoing proceedings in scrutiny/audit/investigation for FY 2017-18 and 2018-19 and not to the completed proceedings. However these instructions will apply in those cases for FY 2017-18 and 2018-19 where any adjudication or appeal proceedings are still pending

For more details, please refer to Circular No. 183/15/2022-GST dated 27.12.2022

14. Clarification with regard to submission of certified copy of order w.r.t. filing of appeal

• Where the decision or order appealed against is uploaded on the Common portal, a final acknowledgement indicating appeal number shall be issued in Form GST APL-02 and the date of provisional acknowledgment shall be considered as the date of filing of appeal
• Where such decision or order appealed against is not uploaded on the common portal, the appellant shall submit a self certified copy of the said decision or order within a period of 7 days from the date of filing of Form GST APL-01 and a final acknowledgment, indicating appeal number shall be issued in Form GST APL-02 and the date of issue of the provisional acknowledgment shall be considered as the date of filing appeal
• Where the said self certified copy of the decision or order is not submitted within a period of 7 days from the date of filing of Form GST APL-01, the date of submission of such copy shall be considered at the date of filing of appeal

For more details, please refer Rule 108(3) and 109 of CGST Rules, 2017, Notification No. 26/2022-Central Tax dated 26.12.2022