LATEST CHANGES IN GST LAW

[Mr. M. GOVINDARAJAN]

Notifications

The Central Government issued the following notifications issued on 28.09.2022 and 29.02.2022-

• Notification No. 18/2022, dated 28.09.2022;
• Notification No. 19/2022, dated 28.09.2022;
• Notification No. 20/2022, dated 29.09.2022; and

Notification No. 18/2022

Finance Act, 2022 brought amendments to Central Goods and Services Tax, 2017 (‘Act’ for short) from Section 100 to Section 114.  The said provisions have not come into effect at the time of amendment.  Now, vide Notification No. 18/2022, dated 28.09.2022 the Central Government appointed 01.10.2022 for these clauses except-

• clause 110(c) - substitution of new section for section 49(10); and
• clause 111- amendment to section 50 – interest on delayed payment of tax. 

The amendments are as detailed below-

• Clause 100 – amendment to section 16 – eligibility and conditions to take input tax credit;
• Clause 101 – amendment to section 29 – cancellation or suspension of registration;
• Clause 102 – amendment to section 34 (2) – credit and debit notes;
• Clause 103 – amendment to section 37 – furnishing details of outward supplies;
• Clause 104 – substitution of new section for section 38 – communication of details of inward supplies and input tax credit;
• Clause 105 – amendment to section 39 – furnishing of returns;
• Clause 106 – substitution of new section for section 41 – availment of input tax credit;
• Clause 107 -  omission of section 42 – Matching, reversal and reclaim of input tax credit;  43 – Matching, reversal and reclaim of reduction in output tax liability; and 43A – Procedure for furnishing return and availing input tax credit
• Clause 108 – amendment to section 47 – levy of late fee;
• Clause 109 – amendment to section 48 – Goods and Service Tax Practitioners;
• Clause 110 – amendment to section 49 – payment of tax, interest, penalty and other amounts;
• Clause 112 – amendment to section 52 – collection of tax at source;
• Clause 113 – amendment to section 54 – Refund of tax;
• Clause 114 – amendment to section 168 – Power to issue instructions or directions.

Notification No. 19/2022

Vide this Notification the Central Government amended the Goods and Services Tax Rules, 2017.  These amendments are meant in consonance with the amendments made in the Act by Finance Act, 2021 in respect of GST and made effective from 01.10.2022.

Amendment to Rule 21

Clause 2 proposed to insert sub Rules 21(h) and 21(i) which provides additional events that lead to cancellation or suspension of registration and read as follows-

• Rule 21 (h) -  being a registered person required to file return under subsection (1) of section 39 for each month or part thereof, has not furnished returns for a continuous period of six months;
• Rule 21 (i) - being a registered person required to file return under proviso to subsection (1) of section 39 for each quarter or part thereof, has not furnished returns for a continuous period of two tax periods.

Amendment to Rule 36

Clause 3 proposed to amend Rule 36 (documentary requirements and conditions for claiming input tax credit) sub rule (2) and (4)(b). 

Rule 36(2) provides that input tax credit shall be availed by a registered person only if all the applicable particulars as specified in the provisions of Chapter VI are contained in the said document and the relevant information, as contained in the said document, is furnished in FORM GSTR-2 by such person.  The amendment omitted the phrase ‘and the relevant information, as contained in the said document, is furnished in Form GSTR – 2 by such person.

After the amendment, Rule 36(2)(4) provides that no input tax credit shall be availed by a registered person in respect of invoices or debit notes the details of which are required to be furnished under section 37(1) unless the details of input tax credit in respect of such invoices or debit notes have been communicated to the registered person in FORM GSTR-2B under rule 60(7).

Amendment to Rule 37

Clause 4 substituted new section 37(1) and 37(2) for section 37(1) and 37(2) and omitted Section 37(3) which provides that the registered person shall be liable to pay interest at the rate notified under section 50(1) for the period starting from the date of availing credit on such supplies till the date when the amount added to the output tax liability, as mentioned in sub-rule (2), is paid.

The newly substituted section 37(1) provides that a registered person, who has availed of input tax credit on any inward supply of goods or services or both, other than the supplies on which tax is payable on reverse charge basis, but fails to pay to the supplier thereof, the amount towards the value of such supply along with the tax payable thereon, within the time limit specified in the second proviso to sub-section(2) of section 16, shall pay an amount equal to the input tax credit availed in respect of such supply along with interest payable thereon under section 50, while furnishing the return in FORM GSTR-3B for the tax period immediately following the period of one hundred and eighty days from the date of the issue of the invoice.  

The first proviso to this Rule provides that the value of supplies made without consideration as specified in Schedule I of the said Act shall be deemed to have been paid for the purposes of the second proviso to sub-section (2) of section 16.

The second proviso to this Rule provides that the value of supplies on account of any amount added in accordance with the provisions of section 15 (2)(b) shall be deemed to have been paid for the purposes of the second proviso to of section 16 (2).

The newly substituted Rule 37(2) provides that where the said registered person subsequently makes the payment of the amount towards the value of such supply along with tax payable thereon to the supplier thereof, he shall be entitled to re-avail the input tax credit referred to in sub-rule (1).

Amendment to Rule 38

Rule 38 deals with claim of credit by a banking company or a financial institution.  Clause 5 proposed to amend Rule 38 (a) and 38(c) and omit 38 (d).  After amendment Rule 38 provides that a banking company or a financial institution, including a non-banking financial company, engaged in the supply of services by way of accepting deposits or extending loans or advances that chooses not to comply with the provisions of section 17(2), in accordance with the option permitted under sub-section (4) of that section, shall follow the following procedure, namely,-

1. the said company or institution shall not avail the credit of,-

1. the tax paid on inputs and input services that are used for non-business purposes; and
2. the credit attributable to the supplies specified in sub-section (5) of section 17,

2. the said company or institution shall avail the credit of tax paid on inputs and input services referred to in the second proviso to sub-section (4) of section 17 and not covered under clause (a);
3. 50% of the remaining amount of input tax shall be the input tax credit admissible to the company or the institution and the balance amount of input tax credit shall be reversed in FORM GSTR-3B.

Amendment to Rule 42

The amendment omitted the letters and figures ‘at the invoice level in FORM GSTR-2 and’ in Rule 42 (1)(g).

Amendment to Rule 43

The amendment omitted  the letters and figures ‘FORM GSTR-2 and ’  at both the places where they occur in Rule 43(1).

Amendment to Rule 60

The amendment substituted  the words ‘auto-generated’ for the words ‘auto drafted’ in Rule 60 (7).

Omission of Rules

Clause 9 omitted the following rules-

• Rule 69 – Matching of claim of input tax credit;
• Rule 70 – Final acceptance of input tax credit and communication thereof;
• Rule 71 – Communication and rectification of discrepancy in claim of input tax credit and reversal of claim of input tax credit;
• Rule 72 – Claim of input tax credit on the same invoice more than once;
• Rule 73 –  Matching of claim of reduction in the output tax liability;
• Rule 74 – Final acceptance of reduction in output tax  liability and reversal of claim of reduction;
• Rule 75 – Communication and rectification of discrepancy in reduction of output tax liability and reversal of claim of reduction;
• Rule 76 – Claim of reduction in output tax liability more than once;
• Rule 77 – Refund of interest paid on reclaim of reversals;
• Rule 79 – Communication and rectification of discrepancies in details furnished by the e-commerce operator and the supplier.

Amendment to Rule 83

The amendment omitted the words ‘and inward’ in Rule 83 (8)(a).  According to this amendment the GST practitioner can only furnish the details of outward supplies and not inward supplies on behalf of the registered person.

Amendment to Rule 85

The amendment made amendments in Rule 85 (2).  After amendment Rule 85(2) provides that the electronic liability register of the person shall be debited by-

• the amount payable towards tax, interest, late fee or any other amount payable as per the return furnished by the said person;
• the amount of tax, interest, penalty or any other amount payable as determined by a proper officer in pursuance of any proceedings under the Act or as ascertained by the said person; or
•  any amount of interest that may accrue from time to time.

Amendment to Rule 89

Rule 89 provides the procedure for making application for refund of tax, interest, penalty, fees or any other amount.  The amendment made amendments to Rule 89(1).  The amendment omitted the first proviso to Rule 89(1).  After amendment Rule 89(1) provides that any person, except the persons covered under notification issued under section 55, claiming refund of any balance in the electronic cash ledger in accordance with the provisions of sub-section (6) of section 49 or any tax, interest, penalty, fees or any other amount paid by him, other than refund of integrated tax paid on goods exported out of India, may file, subject to the provisions of rule 10B, an application electronically in FORM GST RFD-01 through the common portal, either directly or through a Facilitation Centre notified by the Commissioner.

Amendment to Rule 96

The amendment substituted the words and figures in Rule 96(3), FORM GSTR-3B for the words and figures ‘FORM GSTR-3 or FORM GSTR-3B, as the case may be’.

Omission of forms

Clause 14 omitted the following forms-

• Form GSTR – 1A – Details of auto drafted supplies;
• Form GSTR – 2 – Details of inward supplies of goods or services; and
• Form GSTR – 3 – Monthly return.

Amendment to Form GST PCT – 05

Form GST PCT – 05 is the authorization or withdrawal of authorization of GST Practitioner.  The amendment omitted the words ‘and inward’ in Sl. No.1 of Part A of the form.

 Notification No. 20/2022

Vide Notification No. 20/2022, dated 28.09.2022, the Central Government rescinded the Notification No. 20/2018-Central Tax, dated 28.03.2018 which provides the extension of due date for filing of application for refund under section 55 by notified agencies with effect from 01.10.2022.