Summary of GST Notifications No. 38 & 39/2021-Central Tax dated 21.12.2021

Couple of notifications have been issued on 21^st December, 2021 to bring into force certain changes with effect from 1^st January, 2022.

Notification No. 38/2021 – Central Tax Dated: 21^st December, 2021

It seeks to bring into force certain sub-rules of Rule 2 of the Central Goods and Services Tax (Eighth Amendment) Rules, 2021, introduced vide Notification No. 35/2021–Central Tax dated 24th September, 2021. The key changes to come into effect are as follows:

• Rule 10B of CGST Rules shall be inserted w.e.f 1^st January, 2022 which prescribes compulsory Aadhaar authentication for registered person in order to be eligible for following purposes:
  • Filing of Revocation Application under Rule 23
  • Filing of Refund Application under Rule 89
  • Refund under Rule 96 on IGST paid exports

• Rule 23 has been amended to incorporate mandatory Aadhaar authentication for filing revocation application.
• Rule 89 has been amended to incorporate mandatory Aadhaar authentication for filing refund application
• Rule 96 has been amended to incorporate mandatory Aadhaar authentication for obtaining refund in case of duty paid exports.

Notification No. 39/2021 – Central Tax Dated: 21st December, 2021

It seeks to bring into force certain clauses of Finance Act, 2021 with effect from 1^st January, 2022. The highlights of the same are as follows:

• Section 7 of the CGST Act shall be amended retrospectively w.e.f 1^st July, 2017 to tax supplies between an association and its members.
• Section 16(2)(aa) has been inserted to provide that ITC would be available only when the details of the invoice or debit note has been furnished by the supplier in the statement of outward supplies and such details have been communicated to the recipient of such invoice or debit note in the manner specified under section 37.
• Explanation 1 to Section 74 has been amended to delink the provisions of penalty under Sec 129 & Sec 130 from Sec 74.

• Explanation to Section 75 shall be inserted which states that “self-assessed tax” shall include the tax payable in respect of details of outward supplies furnished under section 37, but not included in the return furnished under section 39.’.
• The powers of provisional attachment of property under Section 83 has been increased to include any proceedings under Chapter XII (Assessment), Chapter XIV (Inspection, Search, Seizure & Arrest) or Chapter XV(Demands & Recovery).
• Section 107 has been amended to provide that an appeal against an order Sec 129(3) shall be filed only when a sum equal to twenty-five per cent. of the penalty has been paid by the appellant.”
• Section 129 of the CGST Act relating to Detention, seizure and release of goods and conveyances in transit has been amended. Penalty of 200% of tax shall be payable instead of 100%. Time-limit to issue notice and order by the proper officer has been provided in the section itself.
• Section 130 has been amended to remove the non-obstante clause from sub-section (1). Sub-section (3) has been omitted from said section.
• Section 151 has been substituted to enlarge the scope of the same. The Commissioner’s power to collect statistics has been substituted with the power to call for information.
• Section 152 has been amended to allow the information collected under Sec 150 or Sec 151 to be used for the purpose of any proceedings under this Act ONLY after giving an opportunity of being heard to the person concerned.
• Para 7 of Schedule II to the CGST Act deeming the supply of goods by an unincorporated association or body of persons to members has been omitted retrospectively w.e.f 1^st July, 2017.