GST PROPOSALS IN BUDGET 2022 (PART-III)

[Dr. Sanjiv Agarwal]

The Finance Minister has introduced the Finance Bill, 2022 in Lok Sabha on 1st February, 2022. Changes in Customs, Central Excise, GST law and rates have been proposed through the Finance Bill, 2022.

Amendments in GST

Amendments carried out in the Finance Bill, 2022, vide clauses 99 to 113 will come into effect from the date when the same will be notified, as far as possible, concurrently with the corresponding amendments to the similar Acts passed by the States & Union territories with legislature, until stated otherwise.

Clause wise Proposals

Finance Bill, 2022 contains clauses from 99 to 123 in relation to changes proposed in GST laws. This concluding part contains summary of clauses 115 to 123 as follows:

Revised Rate of Interest with retrospective effect

• Clause 115 proposes to amend Notification No. 13/2017-CT dated 28.06.2017, Notification No. 6/2017-Integrated Tax dated 28.06.2017 and Notification No. 10/2017-UT dated 28.06.2017 with retrospective effect (i.e., from 1.7.2017). These Notifications was issued under section 50(1, 3), 54(12) and 56 of CGST Act, 2017.
• The amendment notifies the rate of interest to be 18% instead of 24% w.r.e.f. 1.7.2017 under section 50(3) of CGST Act, 2017.
• Also, clause 118 and 121 of Finance Bill it notifies the rate of interest to be 18% instead of 24% w.r.e.f. 1.7.2017 in relation to IGST and UTGST.
• This interest is levied for wrong availment and utilization of input tax credit.
• With retrospective amendment, the prevailing confusion and litigation shall get settled.

[Source: Clause 115 read with 118 and 121 of Finance Bill, 2022]

Retrospective exemption from GST on supply of fish meal related waste

• Clause 116 of Finance Bill, 2022 proposes a retrospective exemption to levy or collection of Central Tax (CGST) in respect of supply of unintended waste generated during the production of fish meal (except for fish oil).
• Clause 119 seeks to provide retrospective exemption from integrated tax (IGST) in respect of supply of unintended waste generated during the production of fish meal (falling under heading 2301), except for fish oil, during the period from the 1st day of July, 2017 upto the 30th day of September, 2019 (both days inclusive).
• Clause 122 seeks to provide retrospective exemption from Union territory tax (UTGST) in respect of supply of unintended waste generated during the production of fish meal (falling under heading 2301), except for fish oil, during the period from the 1st day of July, 2017 upto the 30th day of September, 2019 (both days inclusive).
• Clause 116 seeks to provide retrospective exemption from central tax in respect of supply of unintended waste generated during the production of fish meal (falling under heading 2301), except for fish oil, during the period from the 1st day of July, 2017 upto the 30th day of September, 2019 (both days inclusive).
• Thus, notwithstanding anything contained in Notification No. 01/2017-CT(Rate) dated 28.06.2017, no CGST should be levied or collected in respect of supply of unintended waste generated during the production of fish meal, for the period from 01.07.2017 to 30.09.2019.
• Similar retrospective amendment has been proposed in respect of Notification 1/2017-IT (Rate) dated 28.06.2017, vide clause 119 of the Finance Bill.
• Similar retrospective amendment has been proposed in respect of Notification 1/2017-UTT (Rate) dated 28.06.2017, vide clause 122 of the Finance Bill.
• However, no refunds shall made of such tax which has already been collected.

[Source: Clause 116, 119 and 122 of Finance Bill, 2022]

Retrospective exemption from GST on liquor license fee

• Clause 117 seeks to give retrospective effect to the notification of the Government of India in the Ministry of Finance (Department of Revenue) number G.S.R. 746(E), dated the 30th September, 2019 with effect from the 1st day of July, 2017.
• Clause 120 seeks to give retrospective effect to the notification of the Government of India in the Ministry of Finance (Department of Revenue) number G.S.R. 745(E), dated the 30th September,2019 with effect from the 1st day of July,2017.
• Clause 123 seeks to give retrospective effect to the notification of the Government of India in the Ministry of Finance (Department of Revenue) number G.S.R. 747(E), dated the 30th September, 2019 with effect from the 1st day of July, 2017.
• Thus, Notification No. 25/2019-CT (Rate) dated 30.09.2019 shall have retrospective effect from 01.07.2017. The said Notification No. 25/2019-CT (Rate) dated 30.09.2019 declares that “services 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” shall neither be treated as supply of goods or supply of services.
• Similar retrospective amendment has been proposed in respect of Notification 24/2019-IT(Rate) dated 30.09.2019, vide clause 120 of the Finance Bill.
• Similar retrospective amendment has been proposed in respect of Notification 25/2019-UTT (Rate) dated 30.09.2019, vide clause 123 of the Finance Bill.
• However, no refund shall be made of all such taxes which have been collected but which would not have been so collected, had the notification been in force during relevant period.
• It implies that tax collected / paid between 01.07.2017 and 30.09.2019 will not be refunded now, i.e., those who have paid will not get refund but those who did not paid till now need not pay such tax.

[Source: Clause 117, 120 and 123 of Finance Bill, 2022]

(Concluded….)