Budget 2021 proposes the imposition of some of the stringent provisions under the Goods and Services Tax (GST). The present article tries to explain the said provisions and their effect thereon, which are proposed to be imposed vide the Finance Bill 2021. Some of which includes Retrospective amendment introduced in ‘scope of supply’, Addition in condition for availing input tax credit, Recovery of tax on mis-match in the return and Expansion in the scope of provisional attachment.
Confusion always prevailed with regard to the levy of GST on the supply of goods/ services by the clubs/ association to its members and vice versa. In order to clarify the position, a new sub-clause (aa) is inserted to section 7(1). Sub-clause (aa) covers the following-
The above transfer will be covered within the scope of supply if the same is done either for cash or deferred payment or other valuable consideration.
Harshly, the above expansion in the scope of supply is proposed to be imposed retrospectively from 1st July 2017. Accordingly, the same will have a terrible effect on the person covered within the same.
As known, for availing input tax credit, the registered taxable person is required to satisfy various conditions mentioned under section 16(2) of the Central Goods and Services Tax Act, 2017.
However, adding up to the hardship of the registered taxable person, one more sub-clause (aa) is inserted to section 16(2) containing additional condition necessary for availing the input tax credit. As per the new condition, for availing the input tax credit-
Thus, before availing of the input tax credit, the registered taxable person is required to check the availability of the same in Form
In case the same is not reflected by the supplier in Form GSTR-1 vis-à-vis Form
and the credit is availed, the taxable person will have to reverse the input tax credit and accordingly pay the interest on the same if applicable.
An explanation is inserted to section 75(12) of the Central Goods and Services Tax Act, 2017 explaining the term ‘self-assessment tax’.
Accordingly, recovery of tax can be initiated against the registered taxable person on the basis of the details of outward supplies reflected in Form GSTR-1 which is not correspondingly reflected in the returns filed under section 39.
Thus, while filing the return in Form GSTR-1, the taxable person needs to be extra conscious since the recovery of tax can be initiated based on the details provided therein.
Provision of section 83(1) is substituted vide Budget 2021. The substituted provisions state that in order to protect the interest of the Government revenue, the Commissioner can provisionally attach the property in the following manner-