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AMENDMENTS TO GST LAW APPLICABLE FROM 1st JANUARY 2022
1. From 1st January 2022, The ITC in respect of invoices/ debit notes, cannot be availed unless the details of such invoices/ debit notes are furnished by the supplier in FORM GSTR-1/ IFF and are communicated to the registered person in FORM GSTR-2B. (Section 16(2) (aa) and Rule 36(4) Substituted by Notification 40/2021 -CT dated Dec 29th 2021).
● This implies that the ITC cannot be availed even if all the 4 conditions as prescribed in the CGST act are satisfied by the recipient, if these are not being furnished by the supplier in details of his outward supplies and appears in GSTR 2B. So, if the supplier is not filing the details on or before 10th of the subsequent month, credit cannot be availed by the recipient. If he furnishes these details after 10th then those entries will be reflected only in the next month GSTR 2B. Currently the limit for provisional credit is 105% of the eligible ITC appearing in the GSTR 2B.
● In case of IGST on imports and tax paid on RCM basis this would not be reflected in the GSTR 3B. Though it can be interpreted that since these items are not charged on the outward supply by the supplier and hence GSTR 2B need not be considered for availing credit, a clarification from the CBIC is awaited by the Trade for avoidance of future disputes.
2. A registered person shall not be allowed to furnish FORM GSTR-1, if he has not furnished the return in FORM GSTR-3B for the preceding month.(Rule 59 amended by Notification No.35/2021 – CT dt.24th Sep 2021).
● This provision has been introduced as a compliance measure to enforce the remittance of taxes and timely submission of GSTR by the supplier. Previously the time granted was 2 months.
● For quarterly return filers, this continues to be the non-filing of GSTR 3B of previous quarter as per the already existing provisions.
3. The tax on outward supplies declared in GSTR 1 but has not been paid through GSTR 3B shall be considered as self-assessed liability (Inserted through explanation to Section 75(12) of the CGST Act).
● Though this provision has been brought in as a deterrent to the practice of certain fraudulent tax payers who show outward supplies in GSTR 1 and claim the ITC elsewhere without paying the tax liability, it may act against genuine tax payers.
● Considering that recovery proceedings can be initiated under section 79 in case of the CGST Act even without issuing a show cause notice for recovering self-assessed tax liability, and hence expected to be used by the authorities only on fraudulent tax availment cases.
4. Provisional attachment of property and bank accounts of taxable person or a person causing to commit and retaining the benefit of the specified offences -(Section 83(1) Substituted- Vide notification 39/2021 dated 21st Dec 2021).
● This has been cited as one of the very ruthless provisions introduced in the Act. The commissioner if he is of the opinion that it is necessary to protect the interests of revenue, may provisionally attach the property including bank account through an order in writing, where the proceedings are pending under specified sections.
● The Scope of this section has been widened and made applicable to whole of the Chapters dealing with Assessment, Inspection, search and seizure and demands and recovery.
5. Penalty u/s 129 increased and tofile an appeal against the demand, minimum pre- deposit of 25%to be made.
6. Power to call for Information (Amendment to Section 150 and 151 of the CGST Act).
● Power given to the Jurisdictional Commissioner to call for Information from any Person in connection with this Act but to be used for further proceeding only after providing the concerned person with opportunity of being heard.
7. Aadhaar Authentication made mandatory (Rule 10B to CGST Rules-Notification 38/2021 dated 21st Dec 2021)).
New rule 10B is being inserted to make Aadhaar authentication mandatory in the following cases.
● For filing of application for revocation of cancellation of registration in FORM GST REG-21 under Rule 23.
● For filing of refund application in FORM RFD-01 under rule 89.
● For refund under rule 96 of the integrated tax paid on goods exported out of India.
8. Change in GST rate for textile industry from 5% to 12% which was earlier notified to be effective from 1st Jan 2022 has been deferred by the GST Council in its meeting held on 31st December 2021.
9. Activities or transactions by registered / unregistered club or association to its members or vice versa shall be considered as a deemed supply– Chargeable retrospectively from July 1st (Section 7(1) (aa) notified vide Notification 39/2021 dated 21st December 2021).
● The principle of mutuality has been disregarded through this amendment and the association and its members are considered as separate persons.
● The retrospective applicability is an issue that is expected would give rise to disputes and litigations.
10. Ecommerce operators like Swiggy and Zomato will be liable to pay GST on restaurant service supplied through them including by an un-registered person. Registered persons supplying restaurant services through ECOs under section 9(5) will report such supplies in Table 8 of GSTR-1 and Table 3.1 (c) of GSTR-3B.
We are a well-established GST Consultant in Kochi, with experience in accounting and taxation, and we can help you with the proper GST assistance.
Contact us at vbvassoc@gmail.com or call us at +91 980 901 2123 for further assistance.
