47^th GST Council meeting was held on 28^th and 29^th May 2022 at Chandigarh, in which lot of changes were made in GST Law and also effect was given to already enacted provisions. Accordingly, Government has issued Notification No 09/2022 CT to 14/2022 CT dated 5^th July 2022 and Circular No 170/02/2022 GST to 176/08/2022 dated 6^th July 2022 to give effect of changes recommended by GST Council. Some changes were also made in GST Rate of Goods and Services. However, notification for the same is yet to be issued. In this article, we will understand important changes effected by above mentioned Notification and Circular:

 

TRANSFER OF ELECTRONIC CASH LEDGER BALANCE UNDER SAME PAN FROM ONE GSTIN TO ANOTHER [ Sec 49(10)] [ Section 110 of Finance Act 2022] :

 

• A registered person may, on the common portal, transfer any amount of tax, interest, penalty, fee or any other amount available in the electronic cash ledger under the Act to the electronic cash ledger for central tax or integrated tax of a distinct person as specified in sub-section (4) or, as the case may be, sub-section (5) of section 25, in FORM GST PMT-09: Subject to condition that no such transfer is allowed if such registered person has unpaid liability in its liability register.

 

• Vide Finance Act 2022, Sec 49(10) was substituted to provide for transfer of balance in Electronic Cash ledger among same PAN GSTIN. Said provision is now made effective by Notification No 09/2022–Central Tax Dated 5th Jul 2022

 

• Also Rule 87(14) is inserted to prescribe the procedure for the same by Notification No 14/2022–Central Tax Dated 5th Jul 2022

 

INTEREST PAYABLE IN CASE OF ITC AVAILED WRONGLY, ONLY IF IT IS UTILSIED. [ Sec 50(3)]:

 

• Now, Section 50 (3) amended With Retrospective effect from 1^st July 2017, to provide that the Interest is payable if Input tax credit Wrongly availed and
• If taxpayer has availed wrong ITC but he has not utilised the same, then No Interest is payable
• This provision is amendment retrospectively w.e.f. 01.07.2017 to avoid disputes for the past period.

(Notification No 09/2022–Central Tax Dated 5th Jul 2022)

• Also, Rule 88B(3) is inserted to prescribe the manner for calculation of interest in such cases by Notification No 14/2022–Central Tax Dated 5th Jul 2022. Same is discussed in subsequent para in this document.

 

EXEMPTION FROM ANNUAL RETURN (GSTR9 and 9A):

 

• Registered person whose aggregate turnover in the financial year 2021-22 is up to two crore rupees, are exempt from filing annual return for the said financial year.

(Notification No 10/2022–Central Tax Dated 5th Jul 2022)

 

[ Note:  Already by Sec 44 of CGST Act 2017 read with Rule 80(3) of CGST Rules 2017, it is specified that Form GSTR 9C is required to be filed by taxpayer whose aggregate turnover is more than Rs 5 crore, on self-certification basis. Therefore, no separate notification is now required for Form GSTR 9C]

 

 

DUE DATE EXTENDED FOR Quarter 4 FORM GST CMO-08:

 

• Due date for filing FORM GST CMP-08 of the Central Goods and Services Tax Rules, 2017 for the quarter ending 30th June, 2022 till the 31st day of July, 2022.

(Notification No 11/2022–Central Tax Dated 5th Jul 2022)

 

LATE FEES WAIVED FOR DELAYED FILING OF FORM GSTR-4 of FY 2021-22:

 

• Late fees are waived for delayed filing of FORM GSTR 4 for FY 2021-22, if filed upto date of 28^th July 2022

 

(Notification No 12/2022–Central Tax Dated 5th Jul 2022)

 

PERIOD FROM 1^ST MARCH 2020 TO 28^TH FEBRUARY 2022 IS EXCLUDED FROM PERIOD OF LIMITATION FOR REFUND APPLICATION OR ISSUANCE OF ORDER:

 

Below extension is Show cause notice and refund time limit is provided due to covid pandemic and order of supreme court.

 

• Time limit for issuance of order under section 73 (9) of CGST ACT 2017, for recovery of tax not paid or short paid or of input tax credit wrongly availed or utilised for F.Y.2017-18 is extended upto 30^th Sep 2023
• Period From 1^st mar 2020 to 28^th Feb 2022 is to be excluded for computation of period of limitation, for recovery of erroneous refund;
• Period From 1^st mar 2020 to 28^th Feb 2022 is to be excluded for computation of period of limitation, for filing refund application under section 54 or section 55 of the CGST Act 2017.

 

(Notification No 13/2022–Central Tax Dated 5th Jul 2022 – into force with effect from the 1st day of March, 2020.)

 

CHANGES IN CGST RULES 2017

(Notification No 14/2022 -Central Tax, Dated 05/07/2022)

 

AUTOMATIC REVOCATION OF SUSPENDED REGISTRATION AFTER FILING ALL PENDING RETURN:

 

• Notified the rules that, in case of any registration is suspended but not cancelled by officer, then the same shall be revoked upon the filing of all pending GST Returns by the taxpayer.
• This benefit is application to case, where registration is suspended but not cancelled by officer and in between, all pending returns are filed.

 

NO ITC REVERSAL REQUIRED ON SALE OF DUTY CREDIT SCRIP:

 

• Clause (d) is inserted in Explanation 1 to Rule 43 CGST Rules 2017, to exclude the value of supply of Duty Credit Scrips specified in Notification No. 35/2017-Central Tax (Rate), dated the 13th October, 2017 from the aggregate value of exempt supply for the purpose of Rule 42 and Rule 43 of CGST Rules 2017.
• Accordingly, No ITC reversal will be required on Sale of Duty Credit Scrip

 

NEW DECLARATION FOR TAXPAYER EXEMPT FROM E-INVOICE WHOSE TURNOVER IS MORE THAN TURNOVER NOTIFIED AS PER RULE 48(4) OF CGST RULES 2017:

 

• Below declaration required to added on Tax Invoice for taxpayer mentioned next bullet

 

“I/We hereby declare that though our aggregate turnover in any preceding financial year from 2017-18 onwards is more than the aggregate turnover notified under sub-rule (4) of rule 48, we are not required to prepare an invoice in terms of the provisions of the said sub-rule”

 

 

• Above declaration is required to be mentioned by below persons whose aggregate turnover is more than Rs 20 core in any of the preceding year from 2017:

 

– Government Department, Local Authority, SEZ unit, Insurer, banking company, financial institution, Non-Banking Financial Company, Goods Transport Agency, Passenger Transport Service Provider, Person providing service of admission to exhibition of cinematograph films]

 

RE-CREDIT OF ERRONEOUS REFUND SANCTIONED IN CONTRAVENTION:

 

• In respect of the following categories of refund sanctioned erroneously, re-credit of amount in the electronic credit ledger can be done through FORM GST PMT-03A, on deposit of such erroneous refund along with interest and penalty, wherever applicable, by the taxpayer:

 

96. Refund of IGST obtained in contravention of sub-rule (10) of rule 96.
97. Refund of unutilised ITC on account of export of goods/services without payment of tax.
98. Refund of unutilised ITC on account of zero-rated supply of goods/services to SEZ developer/Unit without payment of tax.
99. Refund of unutilised ITC due to inverted tax structure.

 

• Vide Circular No 174/06/2022 GST dated 6^th July 2022, government has prescribed the procedure for the same. As per which
• First taxpayer is required to pay back refund received in cash [ Amount to be paid through Form DRC 03 by mentioning reason]
• Letter is to be written manually to the jurisdictional officer (as per format given in above mentioned circular) that – ‘we have paid back incorrect refund amount in cash and submitting required details as per given format. Therefore, kindly re-credit the amount equivalent to refund paid, in our electronic credit ledger’
• Then officer will check the same and pass the order in Form PMT 03A and will give credit in your electronic credit ledger within 30 days

 

GST PAYMENT CAN BE MADE BY UPI, IMPS FROM ANY BANK:

 

• Now Taxpayers can pay the GST through UPI mode or by IMPS mode from any bank.

 

 

RULES NOTIFIED FOR CALCULATION OF INTEREST ON DELAYED PAYMENT OF TAXES (WITH EFFECT FROM 1^ST JULY 2017):

 

• New Rule 88B Inserted in CGST Rules 2017, to prescribe the manner of calculation of interest in various cases.
• Below is summary of Interest calculation period, for the purpose of paying interest on late filing of the return, unpaid taxes and wrong ITC availed and utilised.

Particulars	Period for Calculation of Interest
In case of Late filing of Return è	On amount of Taxes paid through cash ledger, from due date of filing return to the date of filing the return
In Case of Tax Unpaid/Short Paid è	From the date on which such Tax was due To the date of payment of such Tax
In case of Wrongly ITC Availed and Utilised è	From the date of Utilisation of such ITC to the Date of Reversal of such ITC or Payment of such Tax.   Interest Tax Credit shall be treated as utilized the day when the balance in Electronic Credit Ledger falls below the input tax credit wrongly availed

 

 

 

EXPORT VALUE IS CASE OF REFUND OF ITC FOR ZERO RATED SUPPLY OF GOODS AND SERVICES WITHOUT PAYMENT OF TAX UNDER RULE 89(4):

 

• Following Explanation in added in Rule 98(4), in order to determine value of Export of Goods

Explanation. – For the purposes sub-rule 4 of Rule 89, the value of goods exported out of India shall be taken as

1. the Free on Board (FOB) value declared in the Shipping Bill or Bill of Export form, as the case may be, as per the Shipping Bill and Bill of Export (Forms) Regulations, 2017; or
2. the value declared in tax invoice or bill of supply

whichever is less

 

• It means, while calculating refund, in case of Export of goods under LUT, lower of below Export value to be considered:

1. FOB value as declared on shipping bill
2. Value as declared in Tax Invoice

 

• Due to this rule now, Refund amount will now be reduced.

 

CHANGE IN FORMULA OF REFUND OF INPUT TAX CREDIT ON INVERTED DUTY STRUCTURE:

 

• Refund calculation formula in case Inverted duty structure case is now amended. It is understood that said amendment is made pursuant to observation made by Supreme Court in Judgment of VKC Footsteps

 

• Below is comparison of changed refund formula

 

 

• Old Formula: Maximum Refund Amount = {(Turnover of inverted rated supply of goods and services) x Net ITC÷ Adjusted Total Turnover} – tax payable on such inverted rated supply of goods and services

 

• New Formula: Maximum Refund Amount = {(Turnover of inverted rated supply of goods and services) x Net ITC÷ Adjusted Total Turnover} – {tax payable on such inverted rated supply of goods and services x (Net ITC ÷ ITC availed on inputs and input services)}

 

• Also, government issued Circular no 173/05/2022 GST dated 6^th July 2022 to clarify on issue of claiming of refund under inverted duty structure where the supplier is supplying goods under some concessional notification.

 

 

IMPORTANT CHANGES IN GSTR 3B FORM:

 

• For disclosure of supply made from E-Commerce Operator under Sec 9(5) and ITC blocked under Sec 17(5), some changes are made in Form GSTR 3B.

 

• Now In GSTR3B, Taxable Supplies made through E-Commerce operator u/s9(5) is required to be reported separately. Accordingly, below table 3.1.1 is added in FORM GSTR3B:

Nature of Supplies	Total Taxable value	Integrated Tax	Central Tax	State/UT Tax	Cess
(i) Taxable supplies on which electronic commerce operator pays tax under sub-section (5) of section 9 [to be furnished by the electronic commerce operator]
(ii) Taxable supplies made by the registered person through electronic commerce operator, on which electronic commerce operator is required to pay tax under sub-section (5) of section 9 [to be furnished by the registered person making supplies through electronic commerce operator]

 

• Table 4 of GSTR 3B is also amended for ensuring Sec 17(5) ITC is disclosed separately.
• Now it is compulsory to report Blocked/Restricted ITC under Sec 17(5) (relating to food, motor vehicle, construction, gift, sample etc) SEPARATELY at Table 4(B)(1) of GSTR 3B.

 

• Some Taxpayer were disclosing net ITC in GSTR 3B and no disclosure was made blocked ITC. Now, it is compulsory to report Gross ITC at Table 4(A) of GSTR 3B. ITC Blocked/Restricted is required to be reported at Table 4(B)(1) of GSTR 3B

 

• Below is comparison of ITC Table 4 of GSTR 3B with earlier and new changes

Earlier ITC Detail Form	Amended ITC Detail Form	Remarks
Table 4 of GSTR 3B	Table 4 of GSTR 3B
(A) ITC Available (whether in full or part)	(A) ITC Available (whether in full or part)	This amount includes Ineligible ITC also
(1) Import of goods	(1) Import of goods
(2) Import of services	(2) Import of services
(3) Inward supplies liable to reverse charge (other than 1 & 2 above)	(3) Inward supplies liable to reverse charge (other than 1 & 2 above)
(4) Inward supplies from ISD	(4) Inward supplies from ISD
(5) All other ITC	(5) All other ITC	ITC Reclaimed to be show here and disclose the same below D(1)
(B) ITC Reversed	(B) ITC Reversed
(1) As per rules 42 & 43 of CGST Rules	(1) As per rules 38, 42 and 43 of CGST Rules and sub-section (5) of section 17	Now Ineligible ITC (relating to food, motor vehicle, construction, gift, sample etc) u/s 17(5) also Required to be reported separately
(2) Others	(2) Others
(C) Net ITC Available (A) – (B)	(C) Net ITC Available (A) – (B)
(D) Ineligible ITC	(D) OTHER DETAILS
(1) As per section 17(5)	(1) ITC reclaimed which was reversed under Table 4(B)(2) in earlier tax period	only disclosure purpose
(2) Others	(2) Ineligible ITC under section 16(4) and ITC restricted due to PoS provisions	only disclosed Time barred ITC and ITC Restricted due to POS provision, No need to disclose Ineligible ITC under Section 17(5)

 

 

• In this regards, Circular No 170/02/2022-GST dated 6th July 2022 was issued to clarify the position and disclosure requirement.

 

IMPORTANT CHANGES IN FORM GSTR 9:

 

• Below are the changes in Form GSTR 9 for FY 2021-2022
• It is now compulsory to report Credit Note/Debit note/Amendment separately for Taxable B2B supply, Zero rated supply/ SEZ supply on payment of Tax, separately in Table 4I to Table 4L.
• It is compulsory to declare Non-GST Supply Separately at Table Sr. No. 5F of Form GSTR 9
• With respect to reporting of Exempted and Nil Rate supply, there will be option to either separately reports exempt supply and Nil Rated supply separately in Table 5 or report consolidated information of two heads in the “Exempted supply” Row only.
• It is now compulsory to mention HSN wise Summary of Outward Supply from FY 2021-2022 for below class of persons
• IF Annual Turnover in preceding Year is more than 5 cr. Then Mandatory to report HSN code at six Digits level
• If Annual Turnover in Preceding year is up to 5 Cr. Then Mandatory to Report 4-digit HSN code for all B2B Supplies.

 

 

CIRCULAR ISSUED FROM 170/02/2022 TO 176/08/2022 GST dated 6^th July 2022

Below circular were issue to clarify on various things as listed below

Number	Date	Subject
170/02/2022-GST	06-Jul-2022	Mandatory furnishing of correct and proper information of inter-State supplies and amount of ineligible/blocked Input Tax Credit and reversal thereof in return in FORM GSTR-3B and statement in FORM GSTR-1
171/03/2022-GST	06-Jul-2022	Clarification on various issues relating to applicability of demand and penalty provisions under the Central Goods and Services Tax Act, 2017 in respect of transactions involving fake invoices.
172/04/2022-GST	06-Jul-2022	Clarification on various issue pertaining to GST
173/05/2022-GST	06-Jul-2022	Clarification on issue of claiming refund under inverted duty structure where the supplier is supplying goods under some concessional notification.
174/06/2022-GST	06-Jul-2022	Prescribing manner of re-credit in electronic credit ledger using FORM GST PMT-03A.
175/07/2022-GST	06-Jul-2022	Manner of filing refund of unutilized ITC on account of export of electricity.
176/08/2022-GST	06-Jul-2022	Withdrawal of Circular No. 106/25/2019-GST dated 29.06.2019.

 

For detailed understanding of changes, one should refer above mentioned Notification and Circular.

 

To read full Press Release of 47th GST council meeting CLICK HERE: Recommendations of 47th GST Council Meeting | Changes in GST rate as recommended by GST council – Taxontips

 

[ Disclaimer: This document contains information for general guidance only. For any clarification, you can reach on info@gst-at.com. This document is not intended to address the circumstances of any particular individual or entity. Although the best of endeavour has been made to provide the provisions in a simpler and accurate form, there is no substitute to detailed research with regard to the specific situation of a particular individual or entity. This document is only for guidance purpose. We do not accept any responsibility for loss incurred by any person for acting or refraining to act as a result of any matter in this publication.]

 

Author:

CA SWAPNIL MUNOT | CMA NIKHIL CHAVAN | CMA NANDA BARDE & Team

 

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