The Union Minister for Finance & Corporate Affairs, Smt Nirmala Sitharaman tabled the Union Budget 2022-23 in Parliament on 1st February, 2022
The highlights of the GST Proposals made under the Finance Bill, 2022 vide Clause 99 to 113 are as follows:
Clause 99: New condition to claim Input Tax Credit (ITC)
- 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 recipient under Section 38 of the CGST Act (GSTR-2B).
- Section 43A of the CGST Act, which was never made effective has been now proposed to be omitted.
- Further, an extended time has been proposed for availment of input tax credit by a registered person in respect of any invoice or debit note pertaining to a financial year up to 30th day of November of the following financial year or date of furnishing the relevant annual return, whichever is earlier.
Clause 100: Cancellation of Registration
- Clause (b) and (c) of sub-section (2) of section 29 of the CGST Act are being proposed to be amended so as to provide that the registration of a person is liable for cancellation, where -
- (i) a person paying tax under section 10 (composition scheme) 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
Clause 101: New time limit for issuance of Credit Note
- Section 34 of the CGST Act is proposed to be 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 30th November of the following financial year or date of furnishing the relevant annual return, whichever is earlier.
Clause 102: Amendment under Section 37
- Section 37 of the CGST Act is proposed to be 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 30th November of the following financial year (or date of furnishing the relevant annual return, whichever is earlier) for rectification of errors in respect of details of outward supplies furnished under sub-section (1) i.e: rectification in GSTR-1;
- (iv) provide for tax period-wise sequential filing of details of outward supplies under sub-section (1) i.e: GSTR-1 of current perod cannot be filed if previous periods GSTR-1 has not been filed.
Clause 103: Conditions and Restriction on Input Tax Credit
- 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.
- Form GSTR-2B would provide the details of inward supplies where ITC would be available and where ITC cannot be availed by the recipient where:
- supplier has defaulted in payment of tax
- output tax payable by him exceeds the output tax paid by him
- availed credit of input tax of an amount that exceeds the credit that can be availed by him
- he has defaulted in discharging his tax liability
Clause 104: Amendement under Section 39
- Section 39 of the CGST Act is proposed to be amended so as to:
- (i) Provide that the non-resident taxable person shall furnish the return for a month by 13th of the following month (GSTR-5)
- (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 up to 30th of November of the following financial year, for rectification of errors in the return furnished under Section 39 of the CGST Act
- (iv) Provide for furnishing of details of outward supplies of a tax period under sub-section (1) of Section 37 (GSTR-1) as a condition for furnishing the return under Section 39 for the said tax period
Clause 105: Removal of concept of Provisional ITC
- 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 self-assessed input tax credit subject to such conditions and restrictions as may be prescribed.
- Further, the proposed provision also provides that input tax availed would be required to be reversed where the supplier has not paid the tax along with the interest. However, input tax credit can be re-availed upon payment of tax by the supplier.
Clause 106: Do Away with Two-Way Communication Process in return filing
- Sections 42, 43 and 43A of the CGST Act are being proposed to be omitted so as to do away with two-way communication process in return filing.
Clause 107: Amendment under Section 47
- Section 47 of the CGST Act is proposed to be amended so as to provide for levy of late fee for delayed filing of return under section 52 (GSTR-8). Further, reference to section 38 is being removed consequent to the amendment in section 38 of the CGST Act.
Clause 108: Amendment under Section 48
- Consequent to the amendment in section 38 of the CGST Act, sub-section (2) of section 48 of the CGST Act is proposed to be amended so as to remove reference to section 38 therefrom.
Clause 109: Amendment under Section 48
- Section 49 of the CGST Act is being proposed to be 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.
- However, the said transfer would not be permitted where there is unpaid liability in electronic liability ledger of the transferor.
Clause 110: Levying Interest on Input Tax Credit wrongly availed and utilized
- 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 i.e.: Interest @ 24% would be charged only in the case where ITC has been wrongly availed as well as utilized.
Clause 111: Amendment under Section 52
- 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) i.e: GSTR-8.
Clause 112: Amendment under Section 54
- 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 developer or a Special Economic Zone unit by way of insertion of a new sub-clause (ba) in clause (2) of Explanation thereto.
Clause 113: Amendment under Section 168
- Consequent to the amendment in section 38 of the CGST Act, sub-section (2) of section 168 of the CGST Act is being amended so as to remove reference to section 38 therefrom.
