Amendments to CGST Rules 2017 notified on 05.07.2022

[Rachit Agarwal]

Deemed Revocation of Suspended Registration due to Non-Filing of Returns

After Rule 21A(4) proviso has been inserted as follows

Provided   further  that   where   the   registration   has   been   suspended   under   sub-rule   (2A)   for contravention of the provisions contained in clause (b) or clause (c) of sub-section (2) of section 29 and the registration has not already been cancelled by the proper officer under rule 22, the suspension of registration shall be deemed to be revoked upon furnishing of all the pending  returns.

Authors Comment- In view of the above amendment,

1. There will be deemed revocation of the suspension of the registration
2. All the Pending Returns to be filed
3. Suspension of the Registration was due to non-filing of the Returns

No Reversal of Input Tax Credit on Exempted Supply in nature of Supply of Duty Credit Scrips

In Explanation 1 to rule 43, after clause (c), the following clause shall be inserted, namely: –

(d)  the  value  of  supply of  Duty  Credit  Scrips  specified  in  the  notification  of  the  Government  of India, Ministry of Finance, Department of Revenue No. 35/2017-Central Tax (Rate), dated the 13^th October, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number GSR 1284(E), dated the 13^thOctober, 2017

Authors Comment- In view of the above amendment,

1. There will be no reversal of Input Tax Credit under Rule 42
2. There was exempted Supply
3. Exempted Supply is nature of Supply of Duty Credit Scrips specified in Notification No- 35/2017 dated 13.10.2017

Declaration for Non-issuance of E-Invoice wherein the Aggregative Turnover exceeded the prescribe limit

In rule 46, after clause (r), the following clause shall be inserted, namely:

(s) a declaration as below, that invoice is not required to be issued in the manner specified under sub-rule (4) of rule 48, in all cases where an invoice is issued, other than in the manner so specified under the said sub-rule (4) of rule 48, by the taxpayer having aggregate turnover in any preceding financial year from 2017-18 onwards more than the aggregate turnover as notified under the said sub-rule (4) of rule 48-

I/We  hereby  declare  that  though  our  aggregate  turnover  in  any  preceding  financial  year  from 2017-18 onwards is more than the aggregate turnover notified under sub-rule (4) of rule 48, we are not required to prepare an invoice in terms of the provisions of the said sub-rule.‖:‘;

Re-Credit in Electronic Credit Ledger if Refund paid back in DRC 03 in case of erroneous refund by debiting Electronic Cash Ledger

In rule 86, after sub-rule (4A), the following sub-rule shall be inserted, namely: -

―(4B) Where a registered person deposits the amount of erroneous refund sanctioned to him, –

1. 1. under sub-section (3) of section 54 of the Act, or
   2. under sub-rule (3) of rule 96, in contravention of sub-rule (10) of rule 96,

along with interest and penalty, wherever applicable, through FORM GST DRC-03, by debiting the electronic cash ledger, on his own or on being pointed out, an amount equivalent to the amount of erroneous refund deposited by the registered person shall be re-credited to the electronic credit ledger by the proper officer by an order made in FORM GST PMT-03A

Authors Comment- In view of the above amendment

1. Registered person who has been sanctioned the refund either under Section 54(3) or Rule 96(10)
2. Refund amount has been deposited due to erroneous sanction of the refund
3. Such Deposits has been made in DRC 03 by debiting Electronic Cash Ledger
4. Deposits of Tax will be Credited in Electronic Credit Ledger in Form GST PMT-03A

UPI and IMPS recognized Payment of GST

Amendment: In Rule 87(3)

1. 1. in sub-rule (3), after clause (i), the following clauses shall be inserted, namely: -

―(ia) Unified Payment Interface (UPI) from any bank;

(ib) Immediate Payment Services (IMPS) from any bank;;

1. 2. in sub-rule (5), after the words ―Real Time Gross Settlement‖, the words ―or Immediate Payment Service‖ shall be inserted;

Authors Comment: In view of the above amendment

1. UPI and IMPS has recognized mode of payment tax in Challan in PMT-06
2. If the payment is made through NEFT/RTGS/IMPS mandate form shall be generated along with the challan on the Common Portal

Transfer of Balance in Electronic Cash Ledger to Distinct Person

Amendment: New Sub-rule 14 after sub-rule 13 of Rule 87 has been inserted as follows

14)  A registered  person  may,  on  the  common  portal,  transfer  any  amount  of  tax, interest, penalty, fee or any other amount available in the electronic cash ledger under the Act to the electronic cash ledger for central tax or integrated tax of a distinct person as specified in sub-section (4) or, as the case may be, sub-section (5) of section 25, in FORM GST PMT-09:

Provided that no such transfer shall be allowed if the said registered person has any unpaid liability in his electronic liability register

Authors Comment: In view of the above amendment

1. Registered Person having balance in Electronic Cash Ledger
2. Such Balance can be transferred to Distinct Person as specified u/s 25(5)

(Section 25(5): Where a person who has obtained or is required to obtain registration in a State or Union territory in respect of an establishment, has an establishment in another State or Union territory, then such establishments shall be treated as establishments of distinct persons for the purposes of this Act.)

3. Registered Person does not have any unpaid liability in Electronic Liability Register

Computation Methodology for Payment of Interest- Return Related Liabilities (Other than Section 73 and 74)

New Rule 88B(1) has been inserted read as follows

In case, where the supplies made during a tax period are declared by the registered person in the return for the said period and the said return is furnished after the due date in accordance with provisions of section 39, except where such return is furnished after commencement of any proceedings under section 73 or section 74 in respect of the said period, the interest on tax payable in respect of such supplies shall be calculated on the portion of tax which is paid by debiting the electronic cash ledger, for the period of delay in filing the said return beyond the due date, at such rate as may be notified under sub-section (1) of section 50

Author Comment- In view of the above amendment

1. Return has been furnished under provisions of Section 39
2. Such Return has been furnished after the due date
3. Such Return not furnished after commencement of proceedings u/s 73 or 74
4. Supplies are made during the tax period reported in the Return
5. Interest shall be computed from due date of filing of return till the date of filing of return
6. Interest will be computed on the amount paid by debiting Electronic Cash Ledger

Computation Methodology for Payment of Interest- Other than Return Related Liabilities

New Rule 88B(2)

1. 2. In all other cases, where interest is payable in accordance with sub section (1) of section 50, the interest shall be calculated on the amount of tax which remains unpaid, for the period starting from the date on which such tax was due to be paid till the date such tax is paid, at such rate as may be notified under sub-section (1) of section 50.

Author Comment

1. This rule is applicable for the tax payable arising out of other than return liabilities
2. Interest will be computed from the starting date of payment till the date of payment

Interest Liability for Input Tax Credit Wrongly availed applicable only upon its utilization

Old Provisions of Section 50(3)- prior to amendment read as follows

 A taxable person who makes an undue or excess claim of input tax credit under sub-section (10) of section 42 or undue or excess reduction in output tax liability under sub-section (10) of section 43, shall pay interest on such undue or excess claim or on such undue or excess reduction, as the case may be, at such rate not exceeding twenty-four per cent., as may be notified by the Government on the recommendations of the Council

Substituted Provisions of Section 50(3) as per Finance Act, 2022 effective from 01.07.2017 read as follows

(3) Where the input tax credit has been wrongly availed and utilised, the registered person shall pay interest on such input tax credit wrongly availed and utilised, at such rate not exceeding twenty-four per cent. as may be notified by the Government, on the recommendations of the Council, and the interest shall be calculated, in such manner as may be prescribed.

Author Comment-

In view of the above amendment by way of substitution effective from 01.07.2017 the liability for the payment of the interest shall arise only wherein the input tax credit wrongly availed has been utilized.

Methodology of computing the input tax credit has been utilized shall be determined as per sub-rule 3 of Rule 88 of CGST Rules, 2017

Computation Methodology for Payment of Interest- Input Tax Credit Wrongly availed and utilized

Rule 88B(3) inserted read as follows:-

3. In case, where interest is payable on the amount of input tax credit wrongly availed and utilised in accordance with sub-section (3) of section 50, the interest shall be calculated on the amount of input tax credit wrongly availed and utilised, for the period starting from the date of utilisation of such wrongly availed input tax credit till the date of reversal of such credit or payment of tax in respect of such amount, at such rate as may be notified under said sub-section (3) of section 50.

Explanation. -For the purposes of this sub-rule, -

1. input tax credit wrongly availed shall be construed to have been utilised, when the balance in the electronic credit ledger falls below the amount of input tax credit wrongly availed, and the extent of such utilisation of input tax credit shall be the amount by which the balance in the electronic credit ledger falls below the amount of input tax credit wrongly availed.
2. the date of utilisation of such input tax credit shall be taken to be, -

1. 1. the date, on which the return is due to be furnished under section 39 or the actual date of filing of the said return, whichever is earlier, if the balance in the electronic credit ledger falls below the amount of input tax credit wrongly availed, on account of payment of tax through the said return; or
   2. the date of debit in the electronic credit ledger when the balance in the electronic credit ledger falls below the amount of input tax credit wrongly availed, in all other cases.‖;

Author Comment

1. Computation of Interest shall be done in accordance with Rule 88(3) wherein the input tax credit has been wrongly availed and utilized
2. Interest Tax Credit shall be treated as utilized the day when the balance in Electronic Credit Ledger falls below the input tax credit wrongly availed
3. Date of Utilization
   1. In case where return is furnished u/s 39- The date, on which the return is due to be furnished under section 39 or the actual date of filing of the said return, whichever is earlier
   2. In Other Cases- date of debit in the electronic credit ledger when the balance in the electronic credit ledger falls below the amount of input tax credit wrongly availed

GST Refund of Accumulated Credit

GST Refund on account of Export of Electricity

New Rule 89(2)(ba) has been inserted read as follows

a statement containing the number and date of the export invoices, details of energy exported, tariff per unit for export of electricity as per agreement, along with the copy of statement of scheduled energy for exported electricity by Generation Plants issued by the Regional Power Committee Secretariat as a part of the Regional Energy Account (REA) under clause (nnn) of sub-regulation 1 of Regulation 2 of the Central Electricity Regulatory Commission (Indian Electricity Grid Code) Regulations, 2010 and the copy of agreement detailing the tariff per unit, in case where refund is on account of export of electricity

Author Comment

1. Separate Rule has been inserted for grant of refund on Export of Electricity
2. Statement has to be annexed along with Refund Application in RFD-01 containing the following details as follows
   1. number and date of the export invoices,
   2. details of energy exported,
   3. tariff per unit for export of electricity as per agreement, along with
   4. the copy of statement of scheduled energy for exported electricity by Generation Plants issued by the Regional Power Committee Secretariat as a part of the Regional Energy Account (REA) under clause (nnn) of sub-regulation 1 of Regulation 2 of the Central Electricity Regulatory Commission (Indian Electricity Grid Code) Regulations, 2010 and
   5. the copy of agreement detailing the tariff per unit

Valuation of Goods Exported for purpose of Refund

Explanation has been inserted for the purpose of Valuation of the Refund of accumulated credit on Export of Goods or services

Explanation. – For the purposes of this sub-rule, the value of goods exported out of India shall be taken as –

(i) the Free on Board (FOB) value declared in the Shipping Bill or Bill of Export form, as the case may be, as per the Shipping Bill and Bill of Export (Forms) Regulations, 2017; or

(ii) the value declared in tax invoice or bill of supply,

whichever is less.

Author Comment

1. Irrespective of the Value on which Exports has been made the value of the Export of the Goods for the purpose of computation of the refund shall be lower of
2. FOB Value of the Goods as per the Shipping Bill
3. Value of the Exports as declared in Invoice or Bill of Supply

Refund under Inverted Duty Structure to included Services

Amended Rule 89(5) as follows

Old Rule

Maximum Refund Amount = {(Turnover of inverted rated supply of goods and services) x Net ITC ÷ Adjusted Total Turnover} - tax payable on such inverted rated supply of goods and services

New Rule

Maximum Refund Amount = (Turnover of inverted rated supply of goods and services) x Net ITC ÷ Adjusted Total Turnover} - tax payable on such inverted rated supply of goods and services x (Net ITC÷ ITC availed on inputs and input services)

IGST Paid Refund

IGST Paid Refund- Date of Rectification shall be deemed date Refund Application wherein mismatch in GSTR 1 and Shipping Bills

Proviso has been inserted after Rule 96(1)(b) read as follows

Provided that if there is any mismatch between the data furnished by the exporter of goods in Shipping Bill and those furnished in statement of outward supplies in FORM GSTR-1, such application for refund of integrated tax paid on the goods exported out of India shall be deemed to have been filed on such date when such mismatch in respect of the said shipping bill is rectified by the exporter

Author Remarks

1. There is mismatch in the date furnished in GSTR 1 and Shipping Bill
2. Date of Rectification shall be the deemed date of filing of Refund Application

IGST Paid Refund- Power to Withheld Refund for the want of Verification

New Rule 96(4)(c) has been inserted read as follows

The Commissioner in the Board or an officer authorised by the Board, on the basis of data analysis and risk parameters, is of the opinion that verification of credentials of the exporter, including the availment of ITC by the exporter, is considered essential before grant of refund, in order to safeguard the interest of revenue

Author Comment-

1. The Commissioner in Board or Authorized Officer has the power to withheld the refund
2. Refund shall be withheld on the basis of Data Analysis and Risk Parameters
3. Upon analysis Commissioner or Authorized Officer has reasons
   1. that verification of the credentials of the Exporters to be done
   2. Verification of the ITC has to be done before grant of refund to safeguard interest of revenue

IGST Paid Refund- System Generated Refund Application for Mismatch in Shipping Bills vs GSTR 1 or No Aadhar Authentication

Rule 89(5A), 5B, 5C has been inserted

(5A)Where refund is withheld in accordance with the provisions of clause (a) or clause (c) of sub-rule (4), such claim shall be transmitted to the proper officer of Central tax, State tax or Union territory tax, as the case may be, electronically through the common portal in a system generated FORM GST RFD-01 and the intimation of such transmission shall also be sent to the exporter electronically through the common portal, and notwithstanding anything to the contrary contained in any other rule, the said system generated form shall be deemed to be the application for refund in such cases and shall be deemed to have been filed on the date of such transmission.

Author Comment

1. Refund has been withheld for the reasons that
   1. There is mismatch in the date of Shipping Bills and data transmitted in GSTR 1 or
   2. Aadhar Authentication has not been done
2. Refund Claim shall be transmitted by way of System Generated Form GST RFD-01 to the Proper Officer through common portal
3. Intimation of such refund application shall be sent to Exporter electronically through common portal
4. Date of Application of the Refund shall be the date of the Transmission of the data to the Proper Officer in RFD-01

IGST Paid Refund- System Generated Refund Application for Invalid Return in form GSTR 3B or Export of Goods in violation of Customs Act, 1962

(5B) Where refund is withheld in accordance with the provisions of clause (b) of sub-rule (4) and the proper officer of the Customs passes an order that the goods have been exported in violation of the provisions of the Customs Act, 1962 (52 of 1962), then, such claim shall be transmitted to the proper officer of Central tax, State tax or Union territory tax, as the case may be, electronically through the common portal in a system generated FORM GST RFD-01 and the intimation of such transmission shall also be sent to the exporter electronically through the common portal, and notwithstanding anything to the contrary contained in any other rule, the said system generated form shall be deemed to be the application for refund in such cases and shall be deemed to have been filed on the date of such transmission.

Author Comment

1. Refund has been withheld for the reasons that
   1. There is either no filing of GSTR 3B of improper filing of GSTR 3B or
   2. Export of Goods in violation of the provisions of the Customs Act, 1962
2. Refund Claim shall be transmitted by way of System Generated Form GST RFD-01 to the Proper Officer through common portal
3. Intimation of such refund application shall be sent to Exporter electronically through common portal
4. Date of Application of the Refund shall be the date of the Transmission of the data to the Proper Officer in RFD-01

IGST Paid Refund- System Generated Refund Application for Reasons due to Rule 89(5A) and 89(5B) shall be refund as Applications under Rule 89

(5C) The application for refund in FORM GST RFD-01 transmitted electronically through the common portal in terms of sub-rules (5A) and (5B) shall be dealt in accordance with the provisions of rule 89.

Author Comment

Refund has been withheld for the reasons that

1. 1. There is mismatch in the date of Shipping Bills and data transmitted in GSTR 1 or
   2. Aadhar Authentication has not been done

1. 1. There is either no filing of GSTR 3B of improper filing of GSTR 3B or
   2. Export of Goods in violation of the provisions of the Customs Act, 1962

Such System Generated Refund Application shall be dealt in accordance with provisions of Rule 89

IGST Paid Refund- Old Rule relating to withholding of Refund Omitted as prescribed.

Following Rule 96(6) and 96(7) has been omitted

(6) Upon transmission of the intimation under sub-rule (5), the proper officer of central tax or State tax or Union territory tax, as the case may be, shall pass an order in ¹³[Part A] of FORM GST RFD-07.

(7) Where the applicant becomes entitled to refund of the amount withheld under clause (a) of sub-rule (4), the concerned jurisdictional officer of central tax, State tax or Union territory tax, as the case may be, shall proceed to refund the amount ¹⁴[by passing an order in FORM GST RFD-06 after passing an order for release of withheld refund in Part B of FORM GST RFD-07

Amendment in GSTR 3B

Tax Liability for Electronic Commerce Operator to be discharged separately in 3.1.1 read as follows

3.1.1        Details of supplies notified under sub-section (5) of section 9 of the Central Goods and Services Tax Act, 2017 and corresponding provisions in Integrated Goods and Services Tax/Union Territory Goods and Services Tax/State Goods and Services Tax Acts.

Nature of Supplies	Total Taxable value	Integrated Tax	Central Tax	State/UT Tax	Cess
1	2	3	4	5	6
(i)   Taxable supplies on which electronic commerce operator pays tax under sub-section (5) of section 9 [to be furnished by the electronic commerce operator]
(ii) Taxable supplies made by the registered person through electronic commerce operator, on which electronic commerce operator is required to pay tax under sub-section (5) of section 9 [to be furnished by the registered person making supplies through electronic commerce operator].‖;

Annual Return

Annual Return for Small Tax Payers

Option has been given to the Tax Payers to not filed the Annual Return in Form GSTR 9 for the tax payers aggregate turnover not exceeding Rs. 2 Crore

Annual Return for Other than Small Tax Payers

Additional Liability

Additional liability for the FY 2017-18 or FY 2018-19 or FY 2019-20 or FY 2020-21or FY 2021-22 not declared in FORM GSTR-1 and FORM GSTR-3B may be declared in this return

Outward Supplies- GST Payable

In respect of Table 5D, 5E, 5F Separately Reporting to be done

1. Non GST Supply
2. Exempt Supply and Nil Rated Supply can be disclosed separately or consolidated

Relaxation Ommitted- he registered person shall have an option to fill Table 4B to Table 4E net of credit notes in case there is any difficulty in reporting such details separately in this table

Relaxation Ommitted- he registered person shall have an option to fill Table 4B to Table 4E net of debit notes in case there is any difficulty in reporting such details separately in this Table

Relaxation Ommitted- Registered person shall have an option to fill Table 4B to Table 4E net of amendments in case there is any difficulty in reporting such details separately in this table

Outward Supplies- Without Effect of GST

The registered person shall have an option to fill Table 5A to Table 5F net of credit notes in case there is any difficulty in reporting such details separately in this Table

Input Tax Credit- Registered, RCM, Imports, Reversal

Input Tax Credit from Registered Persons other than Reverse Charge -Reporting of Input Tax Credit on Inputs and Services from Registered Persons- The amount can be clubbed and reported. ITC on Capital Goods to be reported separately

Input Tax Credit under Reverse Charge from Unregistered Persons- registered person shall report the breakup of input tax credit as capital goods and have an option to either report the breakup of the remaining amount as inputs and input services or report the entire remaining amount under the “inputs” row only.

Relaxation Omitted- Input Tax Credit under Reverse Charge from Registered Persons- registered person shall have an option to either report Table 6C and Table 6D separately or report the consolidated details of Table 6C and 6D in Table 6D only

Input Tax Credit on Import of Goods including SEZ-  registered person shall report the breakup of input tax credit as capital goods and have an option to either report the breakup of the remaining amount as inputs and input services or report the entire remaining amount under the “inputs” row only

Reversal of Input Tax Credit- Registered person shall have an option to either fill his information on reversals separately in Table 7A to 7E or report the entire amount of reversal under Table 7H only

Reporting of refunds claimed, sanctioned, rejected and pending - the registered person shall have an option to not fill this Table

 value of demands of taxes for which an order confirming the demand has been issued by the adjudicating authority shall be declared here- the registered person shall have an option to not fill this Table

Relaxation Retained- Aggregate value of supplies received from composition taxpayers- registered person shall have an option to not fill this Table

Relaxation Retained- Aggregate value of all deemed supplies from the principal to the job-worker in terms of sub-section (3) and sub-section (4) of Section 143 of the CGST Act shall be declared here- registered person shall have an option to not fill this table

Relaxation Retained- Aggregate value of all deemed supplies for goods which were sent on approval basis but were not returned to the principal supplier within one eighty days- registered person shall have an option to not fill this table.

Relaxation Omitted- HSN of Outward Supplies

1. Optional for taxpayers having annual turnover upto ₹ 1.50 Cr.
2. HSN Code at Four digits level for all B2B supplies for taxpayers having annual turnover in the preceding year upto ₹ 5.00 Cr
3. HSN code at six digits level for taxpayers having annual turnover in the preceding year above ₹ 5.00 Cr

Relaxation Retained- HSN of Inward Supplies-  registered person shall have an option to not fill Table 18