The CBIC has notified Central Goods and Services Tax (Fourteenth Amendment) Rules, 2020 which seeks to amend Central Goods and Services Tax Rules, 2017 vide Notification No. 94/2020 dated 22/12/2020.
Highlights of Fourteenth Amendment Rules, 2020 are:
- A new sub-rule 4A under Rule 8 has been substituted which stated that every application made under Rule 4 shall be followed by biometric-based Aadhaar authentication and taking photograph along with taking biometric information, photograph and verification of such other KYC documents, as notified, unless the applicant is exempted under sub-section (6D) of section 25, if he has opted not to get Aadhaar authentication done.
- Period under Rule 9 for grant of registration has been increased to 7 working days, and in case a person does not undergo Aadhar based authentication or where proper officer deems fit, registration shall be granted within 30 days after physical verification of place of business.
- Rule 36(4) on ITC (Input Tax Credit) limitation has been further restricted to 5% from earlier 10%. This will come into force w.e.f. from 1st Jan 2021.
- Rule 59 has been inserted to restrict the filing of GSTR-1 if GSTR-3B of two preceding months (preceding tax period for quarterly returns) has not been furnished.
- Rule 86 B : Rule 86B restricts the use of amounts available in electronic credit ledger. The taxpayer has to mandatorily pay at least 1% of his liability through cash ledger if monthly taxable supply (other than exempt supply and zero-rated supply) exceeds 50 Lakhs.
Read More about Rule 86B here : New Rule restricting the use of ITC for discharging the Output Tax liability
- The period of validity of e-way bills under Rule 138 has been amended (w.e.f January 2021) and e-way bill generation shall be restricted under Rule 138E during the period of suspension of registration under Rule 21A. Also, now for a distance up to 200 km (from earlier 100 km) the E-way bill generated is valid for one day.
- The officer can proceed for cancellation of GSTIN where a taxpayer avails Input Tax Credit (ITC) exceeding than that permissible in Section 16. Clause (e) has been inserted in Rule 21 of CGST Rules 2017. The department can also proceed for cancellation if the liability declared in GSTR 3B is less than that declared in GSTR 1 in a particular month.
- Where there are significant deviation/anomalies between details of outward supply between GSTR 3B and GSTR1 or inward supplies (ITC) between GSTR 3B and GSTR 2B indicating contravention of the provisions of the Act or the rules made thereunder, the department shall now serve a notice in FORM GST REG 31 as to call explanation as to why GSTIN should not be canceled. The taxpayer shall be required to submit his reply within 30 days of such notice being served to him.
- The words "opportunity of being heard" has been omitted from clause (2) of Rule 21A. It means that now registration can be suspended under Rule 21A without affording an opportunity of being heard if the proper officer has reasons to believe that that the registration of a person is liable to be cancelled under Section 29 or Rule 21.
- No refund u/s 54 of CGST Act 2017 can be availed by the taxpayer during the period of suspension of his registration.
