C.A. Vipul Khandhar
Author is a well known chartered accountant practicing at Ahmedabad.
1. Budget amendment in GST & excise & Custom tax:
- Now ITC can be availed as per GSTR-2B: ITC u/s 16(2)- ITC can be availed only if the same is not restricted under Section 38 – as per the details communicated to the purchaser in GSTR-2B.
- Now after the year end ITC can be avail up to 30th November in the place of earlier limit of the 30th September of the subsequent year.
- Composition dealer registration can be cancel by the department if they have not filed their GSTR-4 return beyond 3 months from the due date.
- Other then composit dealer registration cancellation on non-filing of gst returns can be cancelled if has not furnished returns for such continuous 2 months tax period as may be prescribed.
- Extension in time limit to issue credit notes in respect of supply made in a financial year can be issued by 30th November of next financial year (currently allowed till 30th September).
- GST 1/ Gst 3B rectification allowed till 30th November Any rectification of error in GSTR-1/ GSTR-3B is now permitted till 30th November of next financial year (currently allowed till 30th September).
- GST Outward Supply process to be amended
- The two-way communication process in filing GST returns is scrapped.
- Section 38 of the CGST Act is being substituted for prescribing the manner as well as conditions and restrictions for communication of details of inward supplies and input tax credit to the recipient by means of an auto-generated statement and to do away with two-way communication process in return filing.
- The due date for filing return by non-resident taxable person is prescribed as 13th day of next month.
- The concept of “claim” of ITC on a “provisional” basis has been done away and to provide for availment of self-assessed input tax credit.
- Sections 42, 43 and 43A of the CGST Act are being omitted so as to do away with two-way communication process in return filing.
- Section 47 of the CGST Act is being amended so as to provide for levy of late fee for delayed filing of TCS returns under section 52. So now ISD return has also been liable for the late fees.
- ITC availment on self-assessment basis:
- Section 49 of the CGST Act is being amended so as to provide for prescribing restrictions for utilizing the amount available in the electronic credit ledger.
- Section 49 of the CGST Act is being amended so as to allow transfer of amount available in electronic cash ledger under the CGST Act of a registered person to the electronic cash ledger under the said Act or the IGST Act of a distinct person.
- Section 49 of the CGST Act is being amended so as to provide for prescribing the maximum proportion of output tax liability which may be discharged through the electronic credit ledger.
- No interest if ITC availed but not utilize: Interest to be levied on ITC wrongly availed and utilized. If ITC not utilized, then interest will not be levied. Section 50(3) substituted retrospectively wef 01.07.2017.
- Section 54 dealing with refunds amended
- Explicit refund claim of any balance lying in Electronic Cash ledger under Section 54.
- Time limit of 2 years provided for claiming tax refund on inward supplies of both goods or services u/s 55, from last day of the quarter in which said supply was received.
- GST portal www.gst.gov.in notified Notified Retrospectively as the common portal for all the functions provided under CGST Rules 2017 except for E way bill generation and for generation of invoices under Rule 48(4) of CGST Rules.
- In case of enforcement, preventive, investigation & any other any case if ITC reversible then interest rate has been reduced from 24% to 18% u/s 50(3) prescribed.
All this amendment has been effective after enactment of finance act & date has been notified in future by the govt.
Custom tax changes:
- Concessional exemption in custom duty around 350 exemptions are being withdrawn.
- Clause (34) of section 2 contains definition of “proper officer”. This section is being modified to specifically state that assignment of functions to an officer of Customs by the Board or the Principal Commissioner of Customs or the Commissioner of Customs shall be done under the newly inserted sub-sections (1A) and (1B) of Section 5 in the Customs Act, 1962 (52 of 1962).
- Section 3 is being amended to specifically include the officers of DRI, Audit and Preventive formation in the class of Officers. This amendment has been made to remove any ambiguity as regards the class of officers of Customs.
- Sub-Section (1A) and 1(B) to Section 5 have been inserted in section 5 of the Customs Act to explicitly provide power of assignment of function to officers of customs by the Board or as the case may be by the Principal Commissioner of Customs or Commissioner of Customs. This amendment has been necessitated to correct the infirmity observed by the Courts in recent judgments that the Act required explicit provision conferring powers for assignment of function to officers of Customs as “proper officers” for the purposes of the Act, besides the definition clause (34) in section 2 of the Customs Act.
- Duty concessions on specified items when imported by bonafide exporters A scheme is being introduced for bonafide exporters on duty-free imports for the purpose of use in goods meant for export, based on end-use monitoring subject to the requirement of exporting value added products manufactured using inputs imported under specified exemptions, within a period of 6 months. Importer shall be required to follow the procedure under the IGCR Rules.Excise duty changes for the valuation of the RSP based goods:
Notification No. 49/2008-Central Excise (N.T.) dated December 24, 2008, provides for Retail Sale Price(RSP) based valuation for specified goods and prescribes an abatement as a percentage of retail sale price for such goods. This notification was issued under section 4A of the Central Excise Act, 1944. Since then statutory/legal position has changed. Accordingly, this notification has been superseded by Notification No. 01/2022- Central Excise (N.T.) dated February 1, 2022, in order to align the Notification No. 49/2008-Central Excise (N.T.) with the current legal position.
2. GSTN enables new Option of Search Tax Payer details in GST Portal:
The Goods and Service Tax Networks (GSTN) has added the new Option of Search Tax Payer details in the GST Portal. You can now search for Taxpayer details by entering the GSTIN OR UIN. The search will contain a percentage of Liability paid that represents the quantum of liability auto-populated from GSTR-1 that was declared/paid in GSTR-3B.
3. Valuation of tobacco and tobacco products for the purposes of payment of Basic Excise Duty and National Calamity Contingent Duty (NCCD) Vide Circular No. 1082/03/2022-CX:
- As per section 4A of the Central Excise Act, 1944, retail sale price based assessment has been prescribed for tobacco and tobacco products (like chewing tobacco, preparations containing chewing tobacco, Jarda scented tobacco, Pan masala containing tobacco) and an abatement of 55% on the retail sale price has been prescribed for such products.
- The valuation of the tobacco and tobacco products, as provided under the relevant notification(s), with reference to retail sale price declared on such goods less such amount of abatement as is notified, is done for the levy and collection of the basic excise duty and NCCD on such goods, as detailed
- The value for the purposes of GST computation will be the transaction value plus basic excise duty, NCCD and any other amount as prescribed in section 15 of GST Act, 2017 [i.e., in the above example, Value for computation of GST and Compensation Cess “V” = Transaction value as per the GST Act, 2017 + 11.475 (basic excise duty +NCCD)].
- Accordingly each manufacturer has to rework excise duty, Nccd & gst applicable of RSP base product.
4. DGFT extends last date of submitting applications for Scrip-based FTP Schemes:
The Director General of Foreign Trade (DGFT) has extended the last date of submitting applications for scrip-based FTP schemes. “Earlier, the DGFT vide Notification No. 48/2015-2020 dated December 31, 2021issued amendments by inserting Para 3.13A in the Foreign Trade Policy 2015-2020 (FTP), in order to specify the last date of submitting applications under Merchandise Exports from India Scheme (MEIS), Service Exports from India Scheme (SEIS), Rebate of State & Central Taxes and Levies (RoSCTL), Rebate of State Levies (ROSL) and 2% additional ad hoc incentive under para 3.25 of the FTP, for scrip based schemes as January 31, 2022,” the DGFT said. The DGFT, vide Notification No. 53/2015-2020 dated February 1, 2022 has amended Para 3.13A of the FTP in order to extend the last date of submitting applications for script-based schemes under MEIS, SEIS, ROSCTL, ROSL and 2% additional ad hoc incentive, to February 28, 2022.
5. Important Judgements & AARs:
(i) AAR On ITC available on GST paid under RCM on hiring of buses for transportation of employees
(Applicant – Maanicare System India Private Limited)
Section 17 (5) had clearly debarred Input Tax Credit on motor vehicles or conveyances used in transport of passengers till the date of the amendment i.e. 01.02.2019. However with effect from 01.02.2019, Input Tax Credit has been allowed on leasing, renting or hiring of motor vehicles, for transportation of persons, having approved seating capacity of more than thirteen persons (including the driver).
In the instant case, the bus service availed by the Applicant is 49-seater i.e. more than 13 seater. Accordingly, the same is not falling under the block credit as provided under section 17(5) of CGST Act 2017 and, therefore, in the instant case, (since the applicant is utilizing the services of renting of motor vehicle for business or furtherance of business), the input tax credit is not restricted to the applicant under the referred Section 17(5) of CGST Act 2017. Thus the applicant would be eligible for ITC but only with effect from 01/02/2019 only, as per above legal provisions.
(ii) AAR On GST is exempt on Comprehensive architectural services:
(Applicant- J J College of Architecture Consultancy Cell)
GST exemption vide Sr. No. 3 of Notification No. 12/2017 – Central Tax (Rate) dated 28th June 2017, is applicable on Comprehensive architectural services that includes architectural design, structural design, MEP design , HVAC services design, preparation of drawings etc for repairs/ restoration, reconstruction for development of recreation ground cum textile museum at United India Mills 2 & 3 at Kala chowky provided by the Applicant to Municipal Corporation of Greater Mumbai (‘MCGM’).
(ii) AAR On GST payable on membership/ subscription fee received from members of a club:
(Applicant – Poona Club Limited)
The Applicant contended that, the membership fee, annual subscription and annual games fee collected from members of club are not liable to tax under the Central Goods and Services Tax Act, 2017 (“the CGST Act”) as the club and the members are considered as same identity and hence the principle of mutuality is applicable and there cannot be any business or supply by one person with its own self. Further contended that, under Section 2(31) of the CGST Act i.e. the definition of consideration, there should be a recipient who receives the goods and services and the ordinary meaning of ‘business’ requires profit motive to be established.
the club and its members are distinct persons and the fees received by the Applicant, from its members are consideration received for supply of goods/services as a separate entity covered by the scope of the term ‘business’, and therefore, the Applicant has to pay GST on the said amounts received from its members.
This publication contains information for general guidance only. It 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. 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.