Latest GST Updates in July 2022 – Key Changes in Goods and Services Tax
August 22, 2022
Levy of interest on ITC wrongly availed & utilized retrospectively
CBIC vide Notification No. 9/ 2022-Central Tax dated 5th July 2022 has notified imposition of interest only where the ITC has been wrongly availed and utilized and not where the ITC has been reversed before utilization. This change is retrospectively effective from the appointed date.
Procedure for calculation of Interest (Rule 88A)
Central Board of Indirect Tax and Customs (CBIC) vide Notification No. 14/ 2022-Central Tax dated 5th July, 2022 has notified procedure for calculation of interest under the following scenarios:
(a) Interest liability on delayed payment under GST law shall be calculated at Net Cash Liability debited from electronic cash ledger, for the period of delay in filing of return beyond due date except for Section 73 or Section 74 (i.e. only in case of self-assessment tax);
(b) In all other cases (i.e. other than self-assessed liability) interest liability on delayed payment shall be calculated on the amount of tax that remains unpaid, for the period starting from the date on which such tax was due to be paid till the date such tax is paid without netting off ITC.
(c) In case, where interest is payable on the amount of ITC wrongly availed and utilized, the interest shall be calculated on such ITC, for the period starting from the date of the utilization till the date of actual reversal or payment of such credit.
Note: Further, an Explanation has been added to the said new Rule 88B to provide that ITC availed shall be construed to have been utilized, when the balance in the electronic credit ledger falls below the amount of the ITC wrongly availed.
Extension of timelines for GST Authorities or Taxpayers
The CBIC vide Notification No. 13/ 2022-Central Tax dated 5th July 27, 2022, has extended the following timelines:
(a) The time limit for issuance of order u/s 73(10) of the CGST Act, 2017 to recover tax not paid or short paid or of input tax credit wrongly availed or utilized by reason other than fraud, wilful misstatement, or suppression of facts for FY 2017-18 up to 30th September 2023;
(b) Time period from the 1st March 2020 to the 28th February 2022 to be excluded for computation of limitation for recovery of erroneous refund u/s 73(10) of the CGST Act, 2017;
(c) The time period from the 1st March 2020 to the 28th February 2022 to be excluded for computation of limitation for filing refund application u/s 54 or 55 of the CGST Act, 2017;
Transfer of balance available in the electronic cash ledger
CBIC vide Notification No. 09/ 2022-Central Tax read with Notification No. 14/ 2022-Central Tax dated 05th July, 2022 has notified Form-GST-PMT-09 and allowed the transfer of the balance available in the electronic cash ledger (under any type) from one head to any other head within the same registration or between the distinct person(s).
Exemption from the filing of the annual return
CBIC vide Notification No. 10/ 2022-Central Tax dated 05th July 2022 has notified to provide an exemption from filing the annual return for the FY 2021-22 for the registered person whose aggregate turnover in the said year is up to Rs. 2 Crores only.
Extension of filing FORM GST CMP-08
Notification No. 11/ 2022-Central Tax dated 05th July 2022 has been issued by CBIC to extend the due date for filing FORM GST CMP-08 (containing details of payment for composition taxpayers) for the quarter ending 30th June 2022 till the 31st July 2022.
Waiver of late fee for filing GSTR-4
Notification No. 12/ 2022-Central Tax dated 05th July 2022 has been issued by CBIC to waive the late fees for filing of GSTR 4 (annual return for composition taxpayers) for FY 2021-22 if the said return is filed till 28th July 2022.
Revocation of registration under suspension
CBIC vide Notification No. 14/2022-Central Tax dated 05th July 2022 has added a proviso to Rule 21A (4) of the CGST Rules, 2017 to the effect that the suspended registration (owing to non-filing of the returns) that has not been canceled shall be deemed to be revoked (i.e. registration shall be activated) on furnishing of all the pending returns.
No Reversal of ITC in case of a supply of Duty Credit Scrips
CBIC vide Notification No. 14/2022-Central Tax dated 05th July 2022 has notified that the aggregate value of exempt supplies for determination of restricted ITC shall exclude the value of Duty Credit Scrips. Hence the common ITC shall not be restricted on account of such exempt supplies.
Particulars on a tax invoice in specified cases
CBIC vide Notification No. 14/2022-Central Tax dated 05th July 2022 has notified, a declaration to be stated on the tax invoice indicating that the concerned taxpayer has not issued the invoice as per the manner specified u/s 48(4) (i.e. E-invoice) even though the aggregate turnover of the such taxpayer from FY2017-18 onwards exceeds the notified limit. This amendment applies to the taxpayers such as an insurer, banking companies, GTA, etc.
Re-credit of electronic credit ledger against erroneous refunds
CBIC vide Notification No. 14/2022-Central Tax dated 05th July 2022 has notified that where registered person deposits back the amount of erroneous refund sanctioned to him along with interest & penalty vide DRC-03, the proper officer shall re-credit the electronic credit ledger by the order made in Form-GST PMT-03A.
The authorized officer may endorse the invoice issued to SEZ units/developer
CBIC vide Notification No. 14/2022-Central Tax dated 05th July 2022 has notified that Authorized Officer as defined u/s 2(c) of the SEZ Rules, 2006 that includes Inspector or Preventive Officer or Appraiser or Superintendent of Customs posted in the SEZ and authorized by the Specified Officer to discharge any of his functions under these rules, may endorse invoice to SEZ / Developer regarding receipt of supply for authorized operations.
Determination of eligible refund as per Rule 89
CBIC vide Notification No. 14/2022-Central Tax dated 05th July 2022 has inserted an explanation to provide that the value of goods exported out of India shall be taken to be the Free on Board (FOB) value or the value declared in the tax invoice or bill of supply, whichever is less for the determination of the eligible refund amount as per the formula given under rule 89(4) of CGST Rules 2017 in case of Zero rated supplies without payment of tax.
Key changes in Form-GSTR-3B
CBIC vide Notification No. 14/2022– Central Tax dated 05th July 2022 following changes have been made in FORM GSTR 3B:
(a) A separate field (paragraph 3.1.1) has been inserted to report the details of supplies notified u/s 9(5) of the CGST Act, 2017 (i.e. supplies on which the tax shall be payable by the electronic commerce operator). A corresponding change has been made in paragraph 3.2.
(b) The ITC reversed and reported at paragraph 4(B)(1) that hitherto covered ITC reversed ‘As per rules 42 & 43 of CGST Rules’ shall now cover ITC reversed as per rules 38 (restricted ITC for banking company or financial institution), 42 and 43 of CGST Rules(restricted ITC on account of exempt supplies) and sub-section (5) of section 17 (blocked ITC).
(c) The details in paragraph 4(D) that hitherto included ‘Ineligible ITC’ shall now be renamed as ‘other details’ and shall cover under sub-item (1) “ITC reclaimed which was reversed under Table 4(B)(2) in earlier tax period” and under sub-item (2) “Ineligible ITC under section 16(4)and ITC restricted due to POS provisions”.
Key changes in Form-GSTR-9
The following key changes have been made in Form-GSTR-9 for FY 2021-22 (Notification No. 14/2022– Central Tax dated 05th July 2022)
(a) Registered person to separately report Non-GST Supply (Table 5F) and have an option to report Nil rated & exempted separately or combined under ‘exempted’ row only;
(b) From FY 2021-22 onwards, reporting of 6 digit HSN code will be mandatory for taxpayers with annual turnover > ₹ 5.00 Crore in the preceding year, and 4 digit HSN code will be required in case of all B2B supplies for taxpayers having annual turnover up to ₹ 5.00 Crore in the preceding year.
GST on services of renting of residential dwelling
CBIC vide Notification No. 05/2022-Central Tax (Rate) dated 13th July 2022 has notified that services by way of renting of a residential dwelling to a GST registered person for either residential or commercial purpose, shall attract GST w.e.f. 18th July 2022 and is to be paid under Reverse Charge Mechanism (RCM) in the hands of the GST Registered person who is the recipient of such services. It is irrelevant whether the supplier of rental service of such residential dwelling is registered in GST or not.
Forward Charge Mechanism under GTA
CBIC vide Notification No. 03/2022-Central Tax (Rate) dated 13th July 2022 has notified that GTA will have an option to charge GST @ 5% without ITC or 12% GST with ITC under forwarding charge mechanism w.e.f. 18th, July 2022. Earlier forward charge mechanism was applicable in case of GST @ 12% with ITC. Further, Reverse Charge Mechanism (RCM) was applicable @ 5% for providing services to specified category recipients only as per Notification No. 13/2017- Central Tax (Rate) dated 28th June 2017. In order to opt for the option of charging GST under the forwarding charge, GTA will be required to make a specified declaration on its invoices.
GST rate increase for Government projects (works contracts)
As per Notification No. 03/2022-Central Tax (Rate) dated 13th July 2022, in order to rationalize tax rates & avoid the accumulation of Input tax credit, works contracts involving construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of archaeological sites, canals, dams, pipelines, water or sewerage treatment, residential complex, road, bridge, tunnel, or terminal, railways, including monorail and metro, etc. for Center / State Government or Local authority or others, which were earlier taxed at 12% are now brought into the GST net of 18%. Further, the works involving pre-dominantly earthwork and sub-contract thereof is taxed at 5% hitherto and now increased to 12%.
GST @ 5% on Clinical Establishment
Vide Notification No. 03/2022-Central Tax (Rate) dated 13th July 2022, a new entry Sl. No.31A inserted in Notification No. 11/2017 – Central Tax to charge 5% tax on Services provided by a clinical establishment by way of providing room [other than Intensive Care Unit (ICU)/Critical Care Unit (CCU)/Intensive Cardiac Care Unit (ICCU)/Neonatal Intensive Care Unit (NICU)] having room charges exceeding Rs. 5000 per day to a person receiving health care services.
Levy of GST on pre-packaged & labeled goods
As per Notification No. 07/2022-Central Tax (Rate) dated 13th July 2022 GST will be applicable on the supply of pre-packaged & labeled goods only on which declaration is required under the Legal Metrology Act, 2009 and the concept of branded unbranded has been done away with.
Furnishing of Accurate information in GST Returns is Mandatory - CBIC
CBIC vide Circular No. 170/02/2022-GST dated 06th July 2022 mandates furnishing of correct and proper information of inter-State supplies and amount of ineligible/blocked Input Tax Credit ("ITC") and reversal thereof in return in FORM GSTR-3B and statement in FORM GSTR-1.
Clarification on availability of ITC on obligatory services
CBIC vide Circular No. 173/02/2022-GST dated 06th July 2022 has clarified that Proviso after clause (iii) of section 17(5)(b) is applicable to the entire section 17(5)(b) of CGST Act. i.e. wherein case it is obligatory for an employer under any law to provide food & beverage, health services, cosmetic and plastic surgery, leasing, renting, or hiring of motor vehicles, membership of the club, health and fitness center, insurance & health insurance, travel benefit, etc. to the employees, then ITC will be eligible to the employer.
Clarification on utilization of balance in E-Credit Ledger
CBIC vide Circular No. 173/02/2022-GST dated 06th July 2022 has clarified that the Balance of the electronic credit ledger can only be used for making payment of output tax on taxable supplies on self-assessment or otherwise. However, it cannot be utilized for making payments under RCM, or for interest, penalty, fees, or any other such amount(s).
The turnover limit for E-invoicing was reduced to INR 10 Crores w.e.f. 1st Oct 22
As per CBIC Notification No. 17/2022-Central Tax dated 01st August 2022, E-invoicing shall be required w.e.f 1st October 2022 by every registered taxable person whose aggregate annual turnover exceeds Rs.10 crore in any of the financial years since 2017-18. Earlier the limit was Rs. 20 crore.
To know more click here:- https://bit.ly/3dFopue
Last updated: 22/08/2022
Article contributed by:
MBG Corporate Services