Objective
The Central Board of Indirect Taxes and Customs (CBIC), issued a notification number 18/2022 dated 28th September, 2022 to give effect to the amendments proposed in Finance Budget, 2022. The said amendments have been made applicable w.e.f. 1st October, 2022. The objective is to refurbish the existing law in order to prevent tax evasion or more effective implication of GST.
Amendments in The Central Goods and Services Tax Act (CGST Act)
1. Input Tax Credit (Section 16)- Amendment Vide Section 100 of Finance Act 2022
In section 16(2) of the CGST Act (hereinafter The Act), clause ‘ba’ has been inserted which provides that information on the input tax credit for the said supply that was sent to the registered person in accordance with section 38 has not been restricted.
Further, in 16(2)(c), the words, figures or letter- ‘section 43A’ has been omitted.
In section 16(4), the due date of taking remaining or matching input tax credit in the return under section 39 has been extended till 30th November from end of finical year.
Brief Note:-
- Not relevance of GSTR 2 because of GSTR 2A/2B got legal recognition
- Due date of matching ITC extended from due date of September month of succeeding year to 30th november
2. Cancellation or Suspension of Registration (Section 29)- Amendment Vide Section 101 of Finance Act 2022
After the amendment in section 29(2)(b), now the proper officer can cancel the registration of a person if a person paying tax under section 10 (Composition) has not furnished the return for a financial year beyond three months from the due date of furnishing the said return.
Further, as per section 29(2)(c), the proper officer can cancel the registration of any registered person other than above, if returns are not furnished for a continuous period of six month.
Brief Note:-
- Power of cancelation of registration under composition invoke when default made for non filing of return beyond the 3 month from due date.
- For Regular taxpayer and other taxpayer made default for non filing of continues 6 month return.
3. Credit and Debit Notes (Section 34)- Amendment Vide Section 102 of Finance Act 2022
After the amendment in section 34(2), any registered person who issues a credit note in relation to a supply of goods or services shall have to declare the details of such a note in the return. The time for such disclosure has been extended till the 30th day of November from end of financial year.
Brief Note:-
- Time limit for CN is extended to 30th day of November from end of financial year.
4. Furnishing Details of Outward Supplies (Section 37)- Amendment Vide Section 103 of Finance Act 2022
The amendment in section 37(1) makes the furnishing of details of outward supply by every registered person, non-resident taxable person and a person paying tax under section 10, 51 or 52 (except input service distributor), in electronic form subject to conditions and restrictions as may be prescribed. Further, the details which have to be provided before the 10th day of the month succeeding the said tax period have also been subjected to conditions and restrictions as prescribed which shall be communicated to the recipient of the said supplies.
The first proviso and sub-section 2 have been omitted.
In section 37(3),the words and figures “and which have remained unmatched under section 42 or section 43” have been omitted. Further, no rectification of error or omission shall be allowed after the 30th day of November.
Sub-section (4) has been inserted which provides that if a registered person has not furnished the details of outward supplies for any of the previous tax periods, then he shall not be allowed to furnish the details of outward supplies under sub-section 1 of this section. The only exception is that the government on the recommendation of the council may allow the same subject to certain conditions and restrictions.
Brief Note:-
- Rules made for filing GSTR-1 and impose restrictions and conditions.
- Enable to filing IFF/GSTR-1 after 11th day of succeeding month previously not allow
- No amendment made in GSTR-1 after 30th day of November succeeding financial year.
- No GSTR of said month will file if any previous GSTR is pending to file.
5. Communication of details of inward supplies and input tax credit (Section 38)
Section 38 has been substituted. It now provides that an auto-generated statement containing the details of the input tax credit shall be made available electronically to the recipients of such supplies. It further elaborates on the details of which an auto-generated statement shall consist.
- Now only credit is allow as per GSTR – 2B and with also matching in liability paid under 3B by supplier.
6. Furnishing of Returns (Section 39)
In 39(5), now, every registered non-resident taxable person will have to furnish a return in electronic form within 13 days (instead of 20 days) after the end of a calendar month or within 7 days after the last day of the period of registration under section 27(1), whichever is earlier.
In 39(7), the proviso has been substituted. The new proviso provides that every registered person who is furnishing a return shall pay to the government an amount equal to the tax due (after considering inward and outward supplies of goods or services or both), input tax credit availed, tax payable and such particulars.
In 39(9), the proviso has been amended. It now allows the registered person to rectify any omission or incorrect particulars till the 13th day of November. Further, sub-section 10 has been substituted to include that now the government on the recommendation of the council may allow a registered person to furnish the return if he has not done the same.
Brief Note:-
- Due date of GSTR-5 now 13th day of succeeding month instead of 20th
- Self assessed tax shall be paid by QRMP dealer in monthly basis.
- Now amendment can be made in GST return of any omission or incorrect particular with payment of interest.
7. Availment of Input Tax Credit (Section 41)
Section 41 has been substituted.It now provides that every registered person is entitled to avail the credit of eligible input tax (self-assessed), in his return and the said amount shall be credited to his electronic credit ledger. It further provides that the credit shall be reversed along with interest if the registered person has not paid the tax but the said credit can be re-availed as soon as the payment of the tax is done.
Brief Note:-
- Input tax credit is given only when tax is paid by supplier if tax not paid by supplier in GSTR-3B then it can be reversed and after payment it can again reclaim.
8. Omission of Sections 42, 43 and 43A
Matching, reversal and reclaim of input tax credit (section 42), Matching, reversal and reclaim of reduction in output tax liability (section 43), and Procedure for furnishing return and availing input tax credit (section 43A) have been omitted.
9. Levy of Late Fee (Section 47)
Sub-section 1 has been amended. Now, late fees shall be levied only on failure to furnish details of outward supplies under section 37 or returns under sections 39, 45 or 52.
Brief Note:-
- No late fees on return under section 38 of inward supply.
10. Goods and Services Tax Practitioners (Section 48)
Sub-section 2 has been amended to exclude. Now, a registered person may authorize an approved goods and services tax practitioner to furnish details of outward supplies under section 37 (details of inward supplies under section 38 have been omitted), and the return under sections 39, 44, 45.
11. Payment of Tax, Interest, Penalty and other amounts (Section 49)
After the amendment, now as per sub-section 2 the input tax credit (self-assessed) in the return of a registered person shall be credited to his electronic ledger only in accordance with section 41 and not 43A, anymore.
Sub-section 10 has been substituted. The present provision provides that a registered person may, on the common portal, transfer any amount of tax, interest, penalty, fee or any other amount available in the electronic cash ledger to the electronic cash ledger for integrated tax, central tax, state tax, Union territory tax, cess or integrated tax or central tax of a distinct person (as specified in 49(4) or 25(5)). It further specifies that a transfer to a distinct person shall not be allowed if the registered person has unpaid liability in his electronic liability register.
Sub-section 12 has been inserted. It provides that the maximum proportion of output tax liability under the CGST Act or under the IGST Act shall be at the discretion of the Government.
Brief Note:-
- Balance of Cash ledger not transfer if any GSTR is pending to file or any due.
- Rule 89A and 89B legally recognition through Act
12. Interest on Delayed Payment of Tax (Section 50)
Sub-section 3 has been substituted and it shall have a retrospective effect, therefore, it will be deemed to have come into effect from 1st July, 2017. It now provides that if the input tax credit has been wrongly availed and utilized then, the registered person shall pay interest (rate not to exceed 24%).
Brief Note:-
- Interest shall pay @24% only when utilization of wrongly availed ITC with amendment retrospective from 01 July 2017.
13. Collection of Tax at Stores (Section 52)
Proviso to sub-section 6 has been amended. It provides that no rectification for any omission or incorrect particulars shall be allowed after 30th November if it is not the result of scrutiny, audit, inspection or enforcement activity by the tax authorities.
14. Refund of Tax (Section 54)
Sub-section 2 has been amended. The timeline to file for a refund of tax has been extended from 6 months to 2 years for a specialized agency of the United Nations Organisation or any Multilateral Financial Institution and Organisation notified under the United Nations (Privileges and Immunities) Act, 1947 (46 of 1947), Consulate or Embassy of foreign countries or any other person or class of persons, as notified under section 55, entitled to a refund of tax paid by it on inward supplies of goods or services or both.
Further, in sub-section 10, now the provision is not restricted to just sub-section 3, its ambit has been widened.
In Explanation clause 2, sub-clause (ba) has been inserted which states that in case of zero-rated supply of goods or services or both to a Special Economic Zone developer or a Special Economic Zone unit where a refund of tax paid is available in respect of such supplies themselves, or as the case may be, the inputs or input services used in such supplies, the due date for furnishing of return under section 39 in respect of such supplies.
15. Power to Issue Instructions or Directions (Section 168)
Sub-section 2 has been amended. It now provides that the Commissioner specified in section 38(2) and 151(1) shall not mean a Commissioner or Joint Secretary posted on the Board mean no power in this section to issue any instruction or direction.
AUTHORS:-
ANKIT JAWARIA, PEEYUSH SAHLOT, KUNJAL JAWARIA (ADVOCATES) (TEAM-AP ASSOCIATE)
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