CBIC notifies new GST Rules on ITC reversals and GST returns

On Thursday, the Central Board of Indirect Taxes and Customs (CBIC) notified various decisions taken at the 48th GST Council meeting.

Majorly, a new rule on Input Tax Credit (ITC) reversal was issued. The CGST Rule 37A lays down the timeline for the recipients to reverse ITC earlier claimed where the supplier did not report such invoice or debit note in GSTR-3B or paid tax thereon within a defined timeline.

Suppliers should aim to report invoices and pay taxes on them in GSTR-3B by September following the financial year. Likewise, recipients can avail of such ITC by GSTR-3B of November of the following year.

Secondly, GSTR-1 of a period cannot be filed, or the invoice furnishing facility can only be used if taxpayers have acted upon form DRC-01B auto-intimation for unpaid tax liability observed through past GSTR-1 versus GSTR-3B, either by paying it or responding.

CGST notification 26/2022, released on 26th December 2022, further introduces PAN-linked mobile and email address verification for GST registration, revises the method of ITC reversal for payment beyond 180 days from the invoice date to the extent of a proportionately unpaid invoice, the procedure to apply and withdraw appeals before any appellate authority.

Further, new provisions are added in CGST Rule 89 to allow vendors and unregistered persons to claim a refund of GST paid on invoices whose contracts/agreements are cancelled or whose credit notes were not issued by the vendor. They must provide a statement with a list of such invoices and GST paid on the same.

Additionally, the vendor must submit a declaration of not having passed on tax incidence to an unregistered person and, hence, claim a refund himself by issuing a credit note to an unregistered person. Alternatively, an unregistered person can claim such a refund if he bears the tax outflow, which does not need any certificate from the vendor.

New tables 14 (original for sellers), 14A (amendments for sellers) and 15 (reporting sales under Section 9(5) by operator to GST-registered and unregistered recipients) are added to GSTR-1 format. The operator and seller need to report e-commerce sales separately under Sections 52 and 9(5) of the CGST Act.

On the other hand, CGST notification 27/2022, released on 26th December 2022, introduces biometric-based Aadhaar authentication starting with taxpayer applicants of Gujarat.

For any clarifications/feedback on the topic, please contact the writer at annapoorna.m@clear.in