Key Highlights of the Amendments in CGST (2nd Amendment) Rules, 2019 are as under –

Based on the recommendations by the GST Council, the Central Government has amended the Central Goods and Services Tax Rules and these amendments have been made applicable with effect from 1st April 2019 by issuing Notification vide Notification No: 16/2019 – Central Tax dated 29th March 2019.

The key highlights are summarized below for lucid understanding:

1. Changes in Input Tax Credit Rules –

i. Rule 41 (Transfer of credit on sale, merger, amalgamation, lease or transfer of a business)

Insertion of Explanation for Value of Assets.  The explanation for Value of Assets has been inserted in the provision which deals with transfer of ITC on account of Sale, merger, amalgamation, lease or transfer of a business.

“value of assets” means the value of the entire assets of the business, whether or not input tax credit has been availed thereon.”

2. Insertion of Rule 88A – Order for Utilization of Input Tax Credit –

Input tax credit on account of IGST shall first be utilised towards payment of IGST. The amount remaining, if any, may be utilised towards the payment of CGST or SGST or UTGST in any order.

Input tax credit on account of CGST, SGST or UTGST shall be utilised towards payment of IGST, CGST, SGST or UTGST, as the case may be, only after the input tax credit available on account of IGST has first been utilised fully.

Below table shall illustrates the amendment in Order of Utilisation of ITC –

ITC Balance Utilized for Set off against liability of Remarks
IGST IGST CGST SGST UTGST After utilization towards payment of IGST only, same can be used for set off of liability for CGST or SGST or UTGST (in any manner)
CGST IGST CGST NA NA Cannot be used against SGST/UTGST
SGST IGST NA SGST NA Cannot be used against CGST/UTGST
UTGST IGST NA NA UTGST Cannot be used against CGST/SGST

Note – Utilization of CGST/SGST/UTGST shall be allowed only when ITC for IGST has been first utilized in full. 

3. Substitution of Rule 100 Assessment in Certain Cases

i. Assessment for Non-Filers of Returns – The order of assessment shall be issued in FORM GST ASMT-13 and a summary shall be uploaded electronically (on GSTN Portal) in FORM GST DRC-07.

ii. Assessment of unregistered persons – The notice to a taxable person shall be issued in FORM GST ASMT-14 containing the grounds on which the assessment is proposed to be made on best judgment basis and shall also serve a summary electronically in FORM GST DRC-01. A time of fifteen days shall be allowed to such person to furnish his reply. An order in shall be passed in FORM GST ASMT-15 and summary thereof shall be uploaded electronically in FORM GST DRC-07.

iii.   a.  Summary Assessment in certain cases – The order of assessment under sub-section (1) of section 64 shall be issued in FORM GST ASMT-16 and a summary of the order shall be uploaded electronically in FORM GST DRC-07.

b. The person may file an application for withdrawal of the assessment order in FORM GST ASMT–17.

c. The order of withdrawal or, rejection of the application shall be issued in FORM GST ASMT-18.

iv. Substitution of Rule 142Notice and order for demand of amounts payable under the Act

A .Proper officer shall serve Notice and summary in table depicted below –

Section Summary Summary in Form
Sec 52 Collection of Tax at Source Summary electronically in FORM GST DRC – 01
Sec 73 Determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised for any reason other than fraud or any wilful misstatement or suppression of facts Summary electronically in FORM GST DRC – 01

Summary along with details of payments to be made in FORM GST DRC -02

Sec 74 Determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised by reason of fraud or any wilful misstatement or suppression of facts
Sec 76 Tax collected but not paid to Government Summary electronically in FORM GST DRC – 01
Sec 122 Penalty for Certain Offences
Sec 123 Penalty for failure to furnish information return.
Sec 124 Fine for failure to furnish Statistics
Sec 125 General Penalty
Sec 127 Power to Impose penalty in certain cases
Sec 129 Detention, seizure and release of goods and conveyances in transit.
Sec 130 Confiscation of goods or conveyances and levy of penalty.

The summary of Order under any of the above sections shall be uploaded in FORM GST DRC – 07 specifying the amount of tax, interest and Penalty payable by the person.  The order shall be treated as notice for recovery.

B. If the person makes payment of the tax, interest or any other amount due, before the service of notice or statement, he shall inform the payment made to the proper officer FORM GST DRC-03 and the proper officer shall issue an acknowledgement, accepting the payment made in FORM GST DRC– 04.

C. If the person makes payment of the tax or interest and penalty within thirty days of the service of a notice or where the person concerned makes payment of the amount within fourteen days of detention or seizure of the goods and conveyance, he shall intimate the proper officer of such payment in FORM GST DRC-03 and the proper officer shall issue an order in FORM GST DRC-05 concluding the proceedings.

D. The representation as per Sec 73 (9) or Sec 74 (9) or Sec 76 (3) or the reply to any notice issued shall be furnished in FORM GST DRC-06.

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