Notification No. 40/2021 – Central Tax dt. 29.12.2021 has been issued to amend the CGST Rules, 2017 to compliment the amendments made in the CGST Act, 2017 that has been brought into force w.e.f. 01.01.2022. The given amendments in the Rules shall also apply w.e.f. 01.01.2022. The detailed analysis of the amendments in the Act is again attached for ready reference. The summary of the amendments in the Rules is as follows:
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1. ITC – Compulsory matching with GSTR 2B
Readers will recall that a new condition by way of clause (aa) to Sec. 16(2) of the CGST Act, 2017 has been brought into force w.e.f. 01.01.2022. As per the said clause, the eligibility of the ITC shall be contingent upon the vendors furnishing the invoice/debit note details in their GSTR 1. Now Rule 36(4) that provided for the availment of ITC upto 5% beyond the eligible ITC for which the details are reported by the vendors in GSTR 1 has been amended w.e.f. 01.01.2022 to withdraw the said benefit of 5%. The amended rule provides that no ITC shall be availed in respect of invoice/debit note unless the (a) details of such invoice/debit note have been furnished in GSTR 1 or IFF and (b) such details have been communicated in GSTR 2B. Hence from 01.01.2022, the ITC in respect of invoice/debit note can be claimed only if the details of the same are reflected in GSTR 2B. It may be noted that the said condition does not apply to availment of ITC in respect of imports/RCM (unregistered vendor)/ISD.
2. Extension of due dates for GSTR 9/9C
Due dates for the filing of the GSTR 9 as well as GSTR 9C for FY 2020-21 has been extended till 28.02.2022. Rule 80 has been amended to that effect.
3. E-way bill violations
Readers will recall that the provisions contained u/s 129 & 130 of the CGST Act, 2017 dealing with the detention, seizure, release as well as confiscation of goods or conveyance in respect of the contravention of the E-way bill requirements have been amended w.e.f. 01.01.2022. Corresponding amendments have also been made in the CGST Rules, 2017 w.e.f. 01.01.2022 as under:
Rule 142 that provides for the issuance of notice and order for demands under the Act has been amended to the effect that if the concerned person makes the payment of penalty as specified in the notice issued u/s 129(3) (200% of the tax payable in the general case) within a period of seven days from the date of issuance of notice but before the issuance of the order and intimate the officer in FORM DRC 03 then the officer shall issue an order in FORM DRC 05 concluding the proceedings in respect of the given notice. It must be noted that the said option is required to be considered only if the given person is not desirous of contesting the demands. If the person intends to contest the demands, it must seek order in FORM GST MOV 09. An appeal is accordingly required to be filed against the said order.
New Rule 144A has been inserted to provide for the recovery of the penalty imposed u/s 129 (E-way bill violations) if not paid voluntarily within 15 days from the receipt of the order. The said recovery shall be made by way of an auction of the goods/conveyance that has been seized. Similarly, Rule 154 has been substituted to provide for the appropriation of the sale proceeds.
4. Provisional attachment
The draconian powers of provisions attachment have been widened w.e.f. 01.01.2022. Rule 159 has been amended to provide that the copy of the order of provisional attachment in FORM GST DRC-22 shall also be sent to the person whose property is being attached. Further FORM GST DRC-22A has been notified in which the person whose property is being attached can file the objections before the Commissioner against the given attachment.
5. Refund claims of foreign diplomatic missions and embassies
Rule 95 has been amended to provide that the refund claims filed by the foreign diplomatic missions and embassies in FORM GST RFD-10 in respect of the tax charged on the invoice for their inward supplies shall be supported by the copy of the invoice, duly attested by the authorized representative of the applicant if the said invoice do not bear the Unique Identity Number of the applicant.
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