GST Changes by Budget 2022

Goods and Service Tax

Note: (a) CGST Act means Central Goods and Services Tax Act, 2017 (b) IGST Act means Integrated Goods and Services Tax Act, 2017

(c) UTGST Act means Union Territory Goods and Services Tax Act, 2017 Amendments carried out in the Finance Bill, 2022, vide clause 99 to 113 will come into effect from a date to be notified, as far as possible, concurrently with the corresponding amendments to the similar Acts passed by the States & Union territories with legislature. Amendments carried out in the Finance Bill, 2022, vide clause 114 to 123 will come into effect on the date of its enactment.

      I.           AMENDMENTS IN THE CGST ACT, 2017:

Amendments

1. A new clause (ba) to sub-section (2) of section 16 of the CGST Act is being inserted 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.

2. Further, sub-section ( 4) of section 16 of the CGST Act is being amended so as to provide for an extended time for availment of input tax credit by a registered person in respect of any invoice or debit note pertaining to a financial year upto thirtieth day of November of the following financial year.

3. Clause (b) and ( c) of sub-section (2) of section 29 of the CGST Act are being amended so as to provide that the registration of a person is liable for cancellation, where –

(i) a person paying tax under section 10 has not furnished the return for a financial year beyond three months from the due date of furnishing of the said return;

(ii) a person, other than those paying tax under section 10, has not furnished returns for such continuous tax period as may be prescribed.

4. Sub-section (2) of section 34 of the CGST Act is being amended so as to provide for an extended time for issuance of credit notes in respect of any supply made in a financial year upto thirtieth day of November of the following financial year.

5. Section 37 of the CGST Act is being amended so as to:

(i) provide for prescribing conditions and restrictions for furnishing the details of outward supply and for communication of the details of such outward supplies to concerned recipients;

(ii) do away with two-way communication process in return filing;

(iii) provide for an extended time upto thirtieth day of November of the following financial year for rectification of errors in respect of details of outward supplies furnished under sub-section (1);

(iv) provide for tax period-wise sequential filing of details of outward supplies under sub-section (1).

6. Section 38 of the CGST Act is being substituted for prescribing the manner as well as conditions and restrictions for communication of details of inward supplies and input tax credit to the recipient by means of an auto-generated statement and to do away with two-way communication process in return filing.

7. Section 39 of the CGST Act is being amended so as to:

(i) provide that the non-resident taxable person shall furnish the return for a month by thirteenth day of the following month;

(ii) provide an option to the persons furnishing return under proviso to sub-section (1 ), to pay either the self-assessed tax or an amount that may be prescribed;

(iii) provide for an extended time upto thirtieth day of November of the following financial year, for rectification of errors in the return furnished under section 39;

(iv) provide for furnishing of details of outward supplies of a tax period under sub-section ( 1) of section 3 7 as a condition for furnishing the return under section 39 for the said tax period.

8. Section 41 of the CGST Act is being substituted so as to do away with the concept of “claim” of eligible input tax credit on a “provisional” basis and to provide for availment of self­assessed input tax credit subject to such conditions and restrictions as may be prescribed.

9. Sections 42, 43 and 43A of the CGST Act are being omitted so as to do away with two-way communication process in return filing.

10. Section 47 of the CGST Act is being amended so as to provide for levy of late fee for delayed filing of return under section 52. Further, reference to section 38 is being removed consequent to the amendment in section 38 of the CGST Act.

11. Consequent to the amendment in section 38 of the CGST Act, sub-section (2) of section 48 of the CGST Act is being amended so as to remove reference to section 38 therefrom.

12. Section 49 of the CGST Act is being amended so as to:

(i) provide for prescribing restrictions for utilizing the amount available in the electronic credit ledger;

(ii) 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;

(iii) provide for prescribing the maximum proportion of output tax liability which may be discharged through the electronic credit ledger.

13.Sub-section (3) of section 50 of the CGST Act is being substituted retrospectively, with effect from the 1st July, 2017, so as to provide for levy of interest on input tax credit wrongly availed and utilized.

14. Sub-section (6) of section 52 of the CGST Act is being amended so as to provide for an extended time upto thirtieth day of November of the following financial year for rectification of errors in the statement furnished under sub­section (4).

15. Section 54 of the CGST Act is being amended so as to:

(i) explicitly provide that refund claim of any balance in the electronic cash ledger shall be made in such form and manner as may be prescribed;

(ii) provide the time limit for claiming refund of tax paid on inward supplies of goods or services or both under section 55 as two years from the last day of the quarter in which the said supply was received;

(iii) extend the scope of withholding of or recovery from refunds in respect of all types of refund;

(iv) provide clarity regarding the relevant date for filing refund claim in respect of supplies made to a Special Economic Zone

  II.         AMENDMENTS IN THE IGST ACT, 2017:

  III.       AMENDMENTS IN THE UTGST ACT, 2017:

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IV.        RETROSPECTIVE AMENDMENTS OF GST RATE NOTIFICATIONS:

  S.                                                Amendment                   Clause of the

   No.                                         Finance Bill, 2022

1. Central Tax, Union Territory Tax and Integrated Tax on supply [116,119,122] of unintended waste generated during the production of fish

meal (falling under heading 2301), except fish oil, is being

exempted during the period commencing from the 1st day of

July, 2017, and ending with the 30^th day of September, 2019

(both days inclusive), subject to the condition that if said tax

has been collected, the same would not be eligible for refund.

2.

Service by way of grant of alcoholic liquor license, against consideration in the form of license fee or application fee or by whatever name it is called by the State Governments, has been declared as an activity or transaction which shall be treated neither as a supply of goods nor a supply of service vide notification No. 25/2019- Central Tax (R) dated 30.09.2019, notification No. 24/2019- Integrated Tax (R) dated 30.09.2019 and notification No. 25/2019- Union Territory Tax (R) dated 30.09.2019. These notifications have been given retrospective effect from 01.07.2017. However, no refund shall be made of tax which has been collected, but which would not have been so collected, had the said notifications been in force at all material times. ******