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New Year New Rules An executive study of 10th amendment in CGST Rules

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New Year New Rules An executive study of 10th amendment in CGST Rules
January 3, 2022
All Articles by: MANOJ SHARMA       View Profile
  • Contents

The 1st day of 2022 is commencing with the 10th amendment in CGST Rules introduced vide Notification No. 40/2021 –Central Tax on 29.12.2021 to effect the procedural changes to implement certain major amendments notified vide Notification No. 39/2021-Central Tax Dated December 21, 2021.

  1. Not ITC can be availed only if supplies not reflected in GSTR 2B – Substitution of Rule 36(4):

      W.e.f. January 01, 2022:

  1. The provision of claiming ITC with a cap of 5% of the eligible ITC  reflected in their GSTR 2A/2B, in cases where invoices are not uploaded by the suppliers in GSTR-1 has been done away with.

  2. This would affect the amendment in Section 16 (2) of the CGST Act. The new rule mandates restricting ITC availability to the registered person on the invoices or debit notes to the extent the details of the same have been furnished by the suppliers in their GSTR 1 and have been communicated in Form GSTR-2B.

Unlike before, the rule has statutory backup now. The provision is not applicable in cases of inputs on imports, ISD, and RCM cases.

Thus, No ITC can be claimed if the same is not reflected in GSTR-2B.

  1. Due date for GST Annual Return for FY21 extended to 28th February, 2022 – Rule 80(1A) & (3A):

W.e.f. December 29, 2021:

a)     Extension of the due date of Form GSTR 9 and Form GSTR 9C for the financial year 2020-21 from December 31, 2021 to February 28, 2022.

  1. Tax refund available on submitting the attested copy of the invoice by an UIN holder if UIN is not mentioned therein – Rule 95(3)

Retrospectively effective from April 01, 2021:

  1. Many suppliers were not mentioning UIN on their tax invoices and filing for refund application. Since the rules did not mandate submitting the original or hard copy of the invoices unless specifically required by the authorities, the amendment has done so that in such cases, duly attested hard copy is submitted by the authorised representative of the applicant while applying for refund in Form GST RFD-10.

  1. Time limit of payment of penalty of 200% detention/seizure of goods in transit is 7 days from date of notice– Rule 142(3)

W.e.f. January 01, 2022:

The time limit of issuance of notice upon detention or seizure of goods in transit is seven days under section 129(3). As per Rule 142, the person chargeable with tax earlier had fourteen days from the date of the seizure or detention to make payment of tax, interest, and penalty as the case may be.

Now, the time limit is within seven days and the above amount is payable within seven days from the date of issuance notice u/s 129(3). Earlier the time period of fourteen days started the date of detention or seizure and intimate in Form GST DRC-03. This is to be done before the issuance of an order by the proper officer.

The taxpayer has the option to contest the demands by seeking the order in FORM GST MOV 09 and then filing an appeal against the said order.

  1. Recovery of penalty on detention or seizure of goods in transit through auction– delinking of confiscation provision– insertion of Rule 144A

W.e.f. January 01, 2022:

Violation of GST Act or its rules such as E-way bill rules, while the goods are in transit, make it liable for the detention or seizure and initiation of confiscation proceedings as per earlier provisions. However, post amendment of the Finance Act, 2021 the above proceeding has been delinked with the confiscation process of such goods in transit.

As per section 129(3), a penalty of 200% of the tax where the owner of goods comes forward and where he does not come forward then a penalty of 50% of the value of goods or 200% of the tax whichever is higher is not paid within 15 days from the date of receipt of the order, the proper officer shall proceed to auction such goods. The period may be reduced for perishable or hazardous goods.

On filing of an appeal, the recovery proceedings shall be deemed to be stayed. However, the minimum pre-deposit amount is 25% of the penalty amount.

  1. Disposal of sale proceeds goods or conveyance in transit – substitution of Rule 154(1)

W.e.f. January 01, 2022:

a)    The rule deals with the provision of appropriation of sale proceeds realized from the sale of goods in transit or conveyance for recovery of penalty under section 129(3):

       First, appropriation against the administrative cost of the recovery process.

       Next, appropriation against the recovery of the penalty under section 129(3).

       Next, appropriation against any other sum due from the defaulter under the provision of the CGST/IGST/UTGST/SGST Act and rules.

       Next, the balance, if any, shall be credited to the electronic ledger of the owner of such goods or conveyance, if registered under the Act or else such sum to be credited to the bank account of such person.

  1. Amendment in rules regarding provisional attachment  of  property – Rule 159(2); (3); (4) and (5)

W.e.f. January 01, 2022:

a)    Section 83 of CGST Act, now authorizes the Commissioner with a wide power to provisionally attach the property of a taxable person or any person who retains the benefit of a transaction in question [specified in section 122(1A)], if he opines that it is necessary to do so to protect the interest of the government revenue.

b)    The amendments in Rule 159 now provide that a copy of the order GST DRC-22 of attachment to be sent to the person whose property is being so attached in addition to erstwhile requirement of sending a copy to the concerned authorities.

c)    A new Form GST DRC -22A has been notified for filing objection by the person whose property is being so attached.

*BBNIA : Baddi Barotiwala Nalagarh Industrial Association, Himachal Pradesh.


By: MANOJ SHARMA - January 3, 2022



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