Amendments in GST Acts

♦ Certain changes have been proposed in the CGST Act through Finance Bill, 2022 based on the recommendations made by the GST Council.

♦ The Amendments pertaining to GST law are mainly in Clause 99 to 113 of the Finance Bill, 2022, which will come into effect from a date to be notified in coordination with the States and Union Territories with the legislature.

Amendments in GST Acts

♦ Certain changes have been proposed in the CGST Act through Finance Bill, 2022 based on the recommendations made by the GST Council.

♦ The Amendments pertaining to GST law are mainly in Clause 99 to 113 of the Finance Bill, 2022, which will come into effect from a date to be notified in coordination with the States and Union Territories with the legislature.

• The main emphasis of these amendments is to align the legal provisions in the Act with the present GSTR-1/GSTR-3B return filing system.
• Besides, some of the amendments pertain to trade facilitation and compliance-related measures.

♦ There are some retrospective amendments in notifications proposed through Clause 114, 115, 118 and 121 of Finance bill 2022, which will come into effect on the date of its enactment.

Other Miscellaneous Proposals

• Section 29 is proposed to be amended so as to provide that the registration of a person is liable for cancellation, where –
  • A person under composition scheme has not furnished the return for a financial year beyond three months from the due date;
  • A person, other than under composition scheme, has not furnished returns for such continuous tax period as may be prescribed
• Section 47 is proposed to be amended so as to provide for levy of late fee for delayed filing of GSTR-8 return by persons deducting TCS under section 52
• Section 49 is proposed to be amended to provide for prescribing the maximum proportion of output tax liability which may be discharged through the electronic credit ledger.

Trade Facilitation Measures

• Section 49 of the CGST Act is proposed to be amended to allow transfer of amount available in electronic cash ledger under the CGST Act of a registered person to the electronic cash ledger under the said Act or the IGST Act of a distinct person.
  • It will help in improving the liquidity of all those taxpayers who have got multiple registrations in different states.
• Section 50(3) is proposed to be amended retrospectively, w.e.f. 01.07.2017, to provide that interest would be charged on the ineligible input tax credit, only when such credit has been availed as well as utilized.
• Also, the rate of interest notified under Section 50(3) is proposed to be reduced retrospectively, w.e.f. 01.07.2017 to 18% per annum from the existing rate of 24% per annum.
  • It will help in the removal of ambiguity and legal disputes on the issue, thus benefiting taxpayers at large.

• Section 54 is proposed to be amended to :
  • Increase the time limit for claiming refund of tax paid on inward supplies of goods or services by a specialized agency of the United Nation/Diplomatic missions, etc. to two years from the last day of the quarter in which the said supply is received.
  • To provide clarity regarding the relevant date for filing refund claim in respect of supplies made to a Special Economic Zone developer or a Special Economic Zone Unit.
  • To provide clarity regarding the manner of availing refund of balance in electronic cash ledger.
• It will help in removing doubts and legal disputes, and also for aligning the provisions of sub-section (2) with sub-section(1) of Section 54
• The time limit for the following compliances in respect of a particular FY has been proposed to be extended and fixed to 30th November, of the next financial year:
  • Section 16(4) : Claiming of ITS in respect of any invoice or debit note
  • Section 34(2) : Issuance of credit note and declaration of details thereof
  • Section 37(3) : Rectification of particulars in details of outward supplies
  • Section 39(9) : Rectification of particulars furnished in a return
  • Section 52(6) : Rectification of particulars in the statement furnished by TCS operator
• It will help in-
  • Making the timelines synchronous across various sections of the Act, and
  • would provide additional time to taxpayers for rectification of errors in GSTR-1/GSTR-3B/GSTR-8 or for availing ITS, etc.

Proposals to Streamline return filing under GST

• Amendments are proposed in CGST Act to align the legal provisions relating to return filing in GST with the present GST-1/GSTR-3B return filing system.
  • Section 37 of the CGST Act is proposed to be amended.

√ To provide for tax period-wise sequential filing of GSTR-1

√ To do away with two-way communication process in return filing

• • Section 38 of the CGST Act is proposed to be substituted for;

√ Communication of details of inward supplies and input tax credit to the recipient by means of an auto-generated statement.

√ Such auto-generated statement to contain the details of inward supplies in respect of which input tax credit may be availed and the details of supplies on which input tax credit cannot be availed by the recipient.

• Section 16 of the CGST Act is being amended to provide that input tax credit with respect to a supply can be availed only if such credit has not been restricted in the details communicated to the taxpayer under Section 38
• Section 39 is proposed to be amended.

√ To provide for the mandatory requirement of filing of GSTR-1 before filing of GSTR-3B return for a tax period

√ To change the due date of filing of return of a month by Non-Resident Taxable person to 13th of the following month.

• Section 41 of the CGST Act is proposed to be substituted so as:

√ To do away with the concept of "claim" of eligible input tax credit on a "provisional" basis

√ To provide for availment of self-assessed input tax credit subject to such conditions and restrictions as may be prescribed

√ To provide for a mechanism for reversal of input tax credit if tax thereon has not been paid by the supplier.

• Section 42,43, and 43A of the CGST Act are being omitted so as to do away with –

√ The concept of "claim" of eligible input tax credit on a "provisional" basis and subsequent matching, reversal and reclaim of such credit.

√ Concept of matching, reversal and reclaim of reduction in output tax liability

√ Two-way communication in return filing.