|Major changes under GST Act to be effective from 1 October 2022
|To enthrone the efforts of ‘Make in India’ objective along with various changes towards GST procedures and compliances, the amendments to GST Act proposed vide Finance Act, 2022 have been notified and shall be effective from 1 October 2022. The key amendments are captured below:
- Section 16(2) has been amended to impose an additional condition for availing Input Tax Credit (ITC) on account of non-compliance by the supplier, the details of which will be communicated in auto-populated GSTR-2B.
- Section 16(4) has been amended to increase the time limit to avail ITC till 30 November* of the succeeding FY.
*Going forward, including for FY 2021-22, the ITC for a FY can be availed in any of the GSTR-3B returns for the months of April to October of the succeeding FY to be filed on or before 30 November 2022 (monthly as well as quarterly filers). However, quarterly taxpayers shall undertake necessary compliances in returns for July-September quarter since by the time returns for October-December quarter will be due, the extended time limit would have lapsed.
- Section 29, which warrants cancellation of GST registration of composition taxpayers on account of non-compliance in filing returns, has been amended to align with compliance timelines for composition taxpayers. Registration could be cancelled if the return is not filed within three months from the due date of filing the annual return.
- Section 34 has been amended to increase the time limit to furnish details of credit notes in respect of invoices pertaining to a financial year till 30 November of succeeding FY, i.e., in any of GSTR-1/GSTR-3B returns filed for the period April to October of the succeeding FY which could be filed upto 30 November.
- Section 37 has been amended to increase the time limit for filing amendments in GSTR-1 pertaining to outward supplies reported during the financial year till 30 November of the succeeding financial year, i.e., in any of GSTR-1 returns filed for the period April to October of the succeeding financial year which could be filed upto 30 November.
- In Section 37, sub-section (4) has been inserted to provide for tax period-wise sequential filing of details of outward supplies whereby the filing of GSTR-1 for a tax period is restricted if GSTR-1 for the previous tax period is not filed.
- Section 38 has been amended to restrict ITC in respect of inward supplies made from specified suppliers viz., who have defaulted in payment of the whole or part output liability, payment of any other liability, availed ITC in excess of the prescribed limit, etc. Such restriction shall be communicated in auto-populated GSTR-2B.
- Section 39 has been amended to increase the time limit for filing amendments in GSTR-3B pertaining to outward supplies reported during the financial year till 30 November of the succeeding financial year, i.e., in any of GSTR-3B returns filed for the period April to October of the succeeding financial year which could be filed upto 30 November.
- Further, Section 39 has also been amended to decrease the time-limit for furnishing the monthly return (GSTR 5), whereby the non-resident taxable person is now required to furnish the same by 13th day of the following month as against present due date of 20th day of the following month.
- Section 41 has been amended to cast the liability on the recipient of supply to reverse input tax along with interest in the event of non-payment of output tax liability by the supplier. Furthermore, it provides the facility for re-availment of such ITC only once the said liability is discharged by the supplier.
- Sections 42 and 43, which provided for matching, reversal and re-claim of ITC through the GSTN portal, have been omitted. Also, Section 43A, which provided for a simplified return scheme, has been omitted.
- Section 52(6) has been amended to increase the time limit for filing amendments/ corrections/ omissions by e-commerce operators pertaining to details furnished in monthly returns (GSTR 8) reported during the financial year till 30 November of the succeeding FY.
- Section 54(2) has been amended to increase the time limit to file a refund application from the existing six months to two years from the end of quarter in which the supply is received.
This provision covers specified agency of the United Nations Organizations, or any Multilateral Financial Institution or Organization notified under the United Nations (Privileges and Immunities) Act, 1947, Consulate or Embassy of foreign countries or persons notified under Section 55 of the CGST Act, 2017.
- Sub-clause (ba) has been inserted in Explanation (2) to Section 54 to provide the relevant date for filing refund application in respect of supplies to SEZ or SEZ developer, which shall be the due date of filing return in Form GSTR-3B in respect of such supplies.
A slew of welcome changes has been introduced to the GST compliance and its timelines to align with other acts and regulations. These will enable the taxpayers to bring uniformity in the reporting under various laws and the appropriate accuracy to the extent possible.
Major changes are introduced in the ITC availment mechanism. These amendments point towards some checkpoints that would be communicated to the taxpayer (maybe through Form GSTR 2B). Thus, the taxpayers would now be required to re-visit the present ITC availment process and introduce additional checks in their systems before finalizing the monthly ITC availment.