GST update on various notifications issued on 5th July 2022

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GST update on various notifications issued on 5th July 2022

				By: Nilesh Mahajan
				July 9, 2022
All Articles by: Nilesh Mahajan View Profile

Contents

NOTIFICATION NO. 9/2022 – CENTRAL TAX

Section 49 & Section 50(3) of the Central Goods and Services Act, 2017 (‘the CGST Act’) amended vide Section 110(c) & 111 of Finance Act, 2022 (FA), respectively

EFFECT OF CHANGES IN SECTION 49(10) OF THE CGST ACT

Sub-section (10) inserted in Section 49 of CGST Act vide clause (c) of Section 110 of FA to allow transfer of amount lying in cash ledger in form of tax, interest, penalty, fees, etc., from one GSTIN to another GSTIN having the same PAN number i.e., Distinct person
Such transfer of the amount is allowed only if there is no liability unpaid in that transferor GSTIN
Sub-rule (14) has been inserted in Rule 87 of Central Goods and Services Rules, 2017 (‘the CGST Rules’) vide Notification No. 14/2022 -Central Tax, dated 5^th July 2022, where FORM GST PMT – 09 is required to be filed on the GSTN portal to transfer the amount in cash ledger

EFFECT OF CHANGES IN SECTION 50(3) OF THE CGST ACT

Sub-section (3) of Section 50 of the CGST Act is amended retrospectively w.e.f. 01 July 2017 vide Section 111 of FA to levy interest on input tax credit wrongly availed and utilized
Further, Rule 88B has been inserted in the CGST Rules vide Notification No. 14/2022 – Central Tax, dated 5 July 2022, to provide the manner of calculating interest in terms of Section 50 of the CGST Act
Manner provided is explained as follows

MANNER OF INTEREST CALCULATION ON OUTPUT LIABILITY

Interest on net liability

Invoices issued during a tax period and declared in the return of the said tax period

[E.g.: Invoices of June 2022 declared in GSTR – 3B of June 2022]

Return of the said tax period is filed after the due date but before any proceedings under Sections 73 & 74 of the CGST Act [E.g.: GSTR – 3B of June 2022 filed after 20 July 2022]
Interest will be payable on net cash payment after adjustment of ITC

Interest on gross liability

In all other cases, interest will be payable on a gross liability without adjusting ITC against output liability

[E.g.: Invoice dated June 2022, declared in GSTR – 3B of Sept 2022, then interest would be payable on the gross liability of the said invoice even if there is sufficient ITC available to pay the said liability for Sept 2022]

MANNER OF INTEREST CALCULATION ON WRONG AVAILMENT & UTILIZATION OF ITC

Interest will be levied on wrongful availment and utilization of ITC and mere availment of ITC shall not attract interest liability.

When will the wrong availment of ITC be treated as ‘utilized’?

When the balance in the credit ledger falls below the amount of ITC wrongly availed at any given point of time after such availment
For example: In June 2022, if wrongly availed ITC is of ₹ 5,00,000 lacs and the balance in the credit ledger fall below ₹ 5,00,000 then it will be treated as utilized

How to calculate the amount of wrongly availed and utilized ITC?

It will be the difference between the amount wrongly availed and the balance in the credit ledger
For example: In June 2022, wrongly availed ITC is ₹ 5,00,000 lacs and if the credit ledger balance in Sept 2022 falls to ₹ 4,00,000 then ₹ 1,00,000 shall be treated as wrong availment and utilization of credit

What shall be the date of the utilization of the wrong availment of ITC?

The date would be the due date or date of actual filling of return whichever is earlier, of the tax period in which the credit balance of ITC falls below the amount of the wrong availment & utilization of ITC due to tax payment through said return or date of debit of electronic credit ledger in all other cases
For example: In June 2022, wrongly availed ITC is ₹ 5,00,000 lacs and if the credit ledger balance in Sept 2022 falls to ₹ 4,00,000 then for ₹ 1,00,000, the date of the utilization of availment would be the due date for Sept 2022 return i.e. 20 Oct 2022 or date of filing whichever is earlier

NOTIFICATION NO. 10/2022 – CENTRAL TAX

Exemption for filing of Annual Return for the Financial Year 2021 – 22 for taxpayers having Aggregate Turnover in the said Financial up to ₹ 2 Crores

NOTIFICATION NO. 11/2022 – CENTRAL TAX

Composition taxpayers are required to file a Quarterly return in form CMP – 08, before the 18^th of next month. The due date for the quarter ending 30 June 2022 is extended till 31 July 2022

NOTIFICATION NO. 12/2022 – CENTRAL TAX

Composition taxpayer is required to file GSTR – 04 return for every financial year till 30^th April of next financial year. Failing to do so will attract a penalty under Section 47 of the CGST Act. CBIC has waived off the said late fee till 28 July 2022

NOTIFICATION NO. 13/2022 – CENTRAL TAX

Extends the time limit under section 73 for issuance of an order for recovery of tax not paid or short paid or of input tax credit wrongly availed or utilized, in respect of a tax period for the financial year 2017-18, up to the 30 Sept 2023
Exclusion of the period from 1 March 2020 to 28 Feb 2022 for computation of the period of limitation for recovery of erroneous refund as per section 73

NOTIFICATION NO. 14/2022 – CENTRAL TAX

Suspension of registration due to non-filing of returns for the specified period by regular taxpayers and within three months of the due date by the composition dealer respectively shall be auto revoked on furnishing of all pending returns
The value of duty credit scripts shall be excluded from the aggregate value of exempt supply for arriving at ITC to be reversed
The taxpayers having an Aggregate Turnover of more than ₹ 20 Crores in any financial year from 2017 – 18 and onwards, but not liable to generate e-invoices e.g., Banks, GTA, SEZ units, etc., should mention the following declaration in their Tax Invoice

‘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,

On deposit of the amount erroneously sanctioned as refunds of accumulated ITC and IGST paid on export, along with interest and penalty, such amount (debited earlier) shall be re-credited to the electronic credit ledger vide PMT 03
UPI and IMPS have been added as options for making deposits into Electronic Cash Ledger
To endorse the invoices for receipt of goods, the special officer would also include an authorized officer
Special provision for export of electricity is provided
Explanation added to Sub-rule (4) of Rule 89, in case of a refund of ITC on account of zero-rated supplies the value of goods shall be taken as FOB value on the shipping bill or value declared in the tax invoice whichever is lower
In case of a mismatch in details of GSTR – 1 & in the shipping bill, the date of rectification of such mismatch will be considered for filing of refund claim
Department can withhold the refund claim in case of risky exporters. Even the refund claim can be transferred to the Jurisdictional GST officers for further verification
The format of GSTR – 3B has been revised for reporting the supply of services through aggregators/e-commerce operators, the tax on which shall be paid by such operators. Table 4 for ITC claims and reversals has also been revised
The Format for GSTR – 9 & 9C for FY 2021 – 22 and other forms have been amended/inserted in line with the changes in relevant provisions which will be shared separately