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GST Notifications

CBIC has issued a number of notifications to amend the CGST rules in order to align with the latest GST council meetings held. Notifications are issued for the mandatory requirement of Aadaar Authentication, amendment related to penalties and procedures, an extension of due dates to file GST Annual Return and Reconciliation Statement, amendment in Rule 36(4) related to GSTR 2A mismatch, etc. An epitome of these is explained below: 

CBIC vide Notification No. 38/2021- Central Tax dated 21-12-2021, notified the date of provisions to come in force w.e.f. 1st January 2022. The highlights on effective new changes are as follows:

  • A new Rule 10B has been inserted, which prescribes that Aadhar authentication is mandatory for registered person who has been issued certificate of registration under Rule 10 of CGST Rules (Issue of Registration Certificate).

Person, who requires to Authentication his Aadhar: 

  • Proprietor, in case of Proprietorship Firm,
  • Any partner, in case of Partnership Firm,
  • Karta, in case of HUF
  • Managing Director or any whole time Director, in case of Company,
  • Any member of Managing Committee, in case of Association of Persons, Body of individuals or Society,
  • Trustee in the Board of Trustees, in case of Trust.

 

  • The registered person shall not be eligible to file following application, if fails to comply with the requirement of Aadhar authentication as per Rule 10B:
    • For filing of application for revocation of cancellation of registration in FORM GST REG-21 under Rule 23.
    • For refund under rule 96 of the integrated tax paid on goods exported out of India.
    • For filing of refund application in FORM RFD-01 under rule 89.

 

Notification No. 39/2021- Central Tax dated 21-12-2021 is issued to notify the effective date of provisions of Finance of Act,2021 (13 of 2021) to come in force w.e.f. 1st January 2022. The highlights on changes in provisions of CGST Act are as follow:

  • Amendment in Section 7 of CGST Act, 2017
    • The new clause (aa) has been inserted in the definition of Supply in Section 7(1) of CGST Act after clause (a).
    •   “(aa) activities or transactions by person, other than individual, to its members or constituents or vice-versa for cash, deferred payments or other valuable consideration.
    • Explanation–For the purposes of this clause, it is hereby clarified that, notwithstanding anything contained in any other law for the time being in force or any judgment, decree or order of any Court, tribunal or authority, the person and its members or constituents shall be deemed to be two separate persons and the supply of activities or transactions inter se shall be deemed to take place from one such person to another.”
    • The said section shall be inserted and deemed to be inserted retrospectively from the 1st July, 2017.
  • Amendment in Section 16 of the CGST Act 2017
    • Section 16(2) (aa) which prescribes that ITC would be available only if supplier have been communicated the details of invoices or debit notes has been furnished by the supplier, to the recipient u/s 37 (Furnishing details of outward supplies) of the CGST Act, 2017.
  • Amendment in Section 74 of the CGST Act, 2017
    • Clause (ii) of Explanation 1 has been amendment in the manner and eliminate the adjoining requirement to conclude the penalty proceedings under Section 129 and 130 under the proceedings of Section 73 and 74.
  • Amendment in Section 75 of the CGST Act, 2017
    • In sub section (12), the following Explanation shall be inserted- “For the purpose of this section self-assessed tax shall include tax payable in respect of details of outward supplies furnished under section 37, but not included in the return furnished under section 39.” 
  • Amendment in Section 83 of the CGST Act, 2017
    • The ambit of scope of provisional attachment of property has been extended for the taxpayers who supplies any goods or services or both without issue of any invoice or issues an incorrect or false invoice in violation of the provisions of this Act or distributes input tax credit in contravention of section 20, or utilizes input tax credit without actual receipt of goods or services, in contravention of the provisions of this Act.
  • Amendment in Section 107 of the CGST Act, 2017
    • A new provison added in the section 107 of CGST Act, 2017 which prescribes that “No appeal can be filed against order under Section 129(3) of the CGST Act, 2017, unless a sum equal to 25% of the penalty paid by the applicant. 
  • Amendment in Section 129 of the CGST Act, 2017.

The provision of Section 129 has been revised as follows:

Where any person transports goods or stores any goods while in transit in contravention of the provision shall be liable for detention or seizure and be released only:

  • When owner of goods pays penalty equal to two hundred per cent of the tax payable on such goods and, in case of exempted goods, on payment of an amount equal to two per cent of the value of goods or twenty-five thousand rupees, whichever is less.
  • In the other case where owner doesn’t pay then on payment of penalty equal to fifty per cent of the value of the goods or two hundred per cent of the tax payable on such goods, whichever is higher, and in case of exempted goods, on payment of an amount equal to five per cent of the value of goods or twenty-five thousand rupees, whichever is less
  • On the other hand, the proper officer detaining the goods shall issue a notice within seven days of such seizure, specifying the penalty payable, pass an order within a period of seven days from the date of service of such notice, for payment of penalty under clause (a) or clause (b) of sub-section (1) and no penalty can be imposed without given opportunity of being heard.
  • Where the person fails to pay the amount within fifteen days from the date of receipt of the copy of the order passed under sub-section (3), the goods or conveyance so detained shall be liable to be sold or disposed provided that conveyance shall be released on payment of penalty by transporter under sub-section (3) or one lakh rupees, whichever is less.
  • Amendment in Section 130 of the CGST Act, 2017
    • Whenever confiscation of any goods or conveyance is authorised by this Act, the officer adjudging it shall give to the owner of the goods an option to pay in lieu of confiscation. It is notified that the fine and penalty leviable shall not be less than the penalty equal to hundred per cent of the tax payable on such goods.
  • Substitution in Section 151 of the CGST Act,2017:
    • Post notification the Section 151 shall be read as follows:

“The Commissioner or an officer authorised by him may, by an order, direct any person to furnish information relating to any matter dealt with in connection with this Act, within such time, in such form, and in such manner, as may be specified therein.” 

  • Amendment in Section 152 of CGST Act,2017:
    • The changes are notified to grant the opportunity of being heard to the concerned person before the publishing of personal information or the use of available information to initiate any proceedings under the Act.

 

  • Schedule II of the CGST Act, 2017:
    • Paragraph 7 has been omitted and shall be deemed to be omitted w.e.f. 01-07-2017:

“Supply of goods by any unincorporated body of persons to a member there of  for cash, deferred payment or other valuable consideration to be treated as Supply of Goods.” 

 Vide Notification No. 40/2021 of Central Tax dated 29-12-2021 board has issued amendments which are effective w.e.f. 01-01-2022 related to the availment of ITC matching with the GSTR2B and relevant changes in GST forms along with the extension in due date for filing GSTR9 and 9C, a detailed summary is elaborated below:

  • With effect from 01 Jan,2022, Amendment is made in Rule 36(4) of CGST Rules, consequence to which, ITC will be eligible to availed only for invoices reporting in GSTR-1 or IFF by the supplier and benefit of claim of unmatched ITC upto 5% with GSTR 2B has been lifted.
  • The due date for filing GSTR-9 and GSTR-9C for the financial year 2020-21 has been extended till 28th Feb,2022.
  • A new proviso has been inserted in Rule 95 in sub rule (3) of CGST Rules, which states that where Unique Identity Number of the applicant is not mentioned in a tax invoice, the refund of tax paid by the applicant on such invoice shall be available only if the copy of the invoice, duly attested by the authorized representative of the applicant, is submitted along with the refund application.
  • In Rule 142 of CGST Rules, - Intimation of payment in DRC-03 in case of detention of goods reduced to seven days from issue of notice under section 129(3), prior to notification the said intimation was to made within fourteen days of detention or seizure of the goods and conveyance. Further, in sub-rule (5), for the words, ?tax, interest and penalty payable by the person chargeable with tax, the words, ?tax, interest and penalty, as the case may be, payable by the person concerned shall be substituted.
  • A new Rule 144A in CGST Rules has been introduced which describes the manner and process of Recovery of penalty by sale of goods or conveyance detained or seized in transit in case concerned person fails to pay the penalty amount.
  • As per revised rule 154, The manner of utilisation of proceeds realised by sale of property or conveyance against the recovery of dues and demands unpaid by the defaulter has been revised. The utilisation of amount against recovery of Penalty imposed under Section 129(3) of CGST Act is added and balance excess recovery is directed to refund back in Electronic Cash ledger of registered person and to the bank account of unregistered person. The transfer of excess balance amount after recovery, if not refunded for any reason within six months, shall be deposited with Fund.
  • The changes in Rule 159 are made for the words taxable person replaced by ‘such person’, for the words place of order of attachment, replaced by ‘in Form GST DRC-22’. Further, time limit to file objection in Form DRC-22A has been eliminated.
  • Changes has also notified in Form GST DRC-10 for notice for auction under Section 79(1)(b) has been extended for Section 129(6) as well.
  • The requirement to issue notice to successful bidder for auction under Rule 144(5) and Rule 147(12) of CGST Rules in Form GST DRC-11 has been extended for new Rule 144A for sale of detained or seized goods or conveyance.
  • The requirement to issue sale certificate for auction under Rule 144(5) and Rule 147(12) of CGST Rules in Form GST DRC-12 has been extended for new Rule 144A for sale of detained or seized goods or conveyance.
  • The change in Form GST DRC-22 has been made and notified to provisionally attached the property of taxable person who supplies any goods or services or both without issue of any invoice or issues an incorrect or false invoice in violation of the provisions of this Act or distributes input tax credit in contravention of section 20, or utilizes input tax credit without actual receipt of goods or services, in contravention of the provisions of this Act.
  • The changes in Form GST DRC-23 has been made to issue release of provisional attachment order to the Regional Transport Authority/Other Relevant Authority and the format of order.
  • Changes in format of Form APL-01 is made by inserting the column for payment of pre deposit of penalty amount under section 129(3).
  • A New form has been notified for Application for filing objection against provisional attachment of property where, an order in FORM GST DRC-22 has been issued for provisional attachment of the following property under the provisions of section 83 of the Act.

Other Important Changes effective from 01-01-2022 are:

  • ECO will pay tax on supplies made by the restaurant through ECO platform.
  • The rate of GST on footwear and textile except for cotton products but including Readymade garments will get higher from 5% to attract 12%. However, the said change in rates for textile industry are deferred by the board as of now, and old rates would be applicable till a new notification is issued.
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