Budget 2022: Time limit for ITC claims and GST changes for an FY is 30th November of next year

The Union FM tabled the Finance Bill, 2022, on 1st February 2022. It contains various amendments to taxation laws. The Central Goods and Services Tax Act also had some key amendments. 

One of the changes in the last date prescribed for GST amendments under Sections 16, 34, 37, 39 and 52. It is now altered to 30th November following a financial year. Earlier, this was the due date to file returns of September of the year following such a financial year. It could have been either 11th of October or 20th, 22nd or 24th of October.

For a better understanding, specific annual actions can be taken by taxpayers by the last date prescribed under the GST law. For instance, Section 16(4) provides that buyers can claim Input Tax Credit (ITC) on invoices or debit notes issued during a financial year within two dates, whichever falls earlier. 

Firstly, the due date to file Form GSTR-3B of September following the financial year. Secondly, the date of filing annual returns in Form GSTR-9 due by 31st December of the year following the financial year.

The first date has now been revised after Budget 2022. It is no longer the due date of September returns but is fixed as 30th November of the year following the financial year or date of filing the annual return, whichever is earlier. Likewise, similar changes are made to the provisions of Sections 34, 37 and 39. 

These include raising credit notes for a financial year, corrections or amendments, return revisions and reporting missed sales invoices or debit/credit notes of a financial year. The last date for such changes for a financial year is no longer the due date to file Form GSTR-1 of September of the following year. But it is fixed as 30th November of the following year.

Similarly, Section 52 also has undergone an amendment with this respect. The time limit to make corrections to Tax Collection at Source (TCS) return in Form GSTR-8 of a financial year can be made on or before 30th November of the subsequent year.

The Parliament must pass the Finance Bill, 2022 and receive the President’s assent. After that, the Central Board of Indirect Taxes and Customs (CBIC) must notify the changes made by issuing a Central Tax notification. Such notification will announce the effective date of implementing Sections 99, 101, 102, 104, and 111. 

The move provides additional time for taxpayers to make revisions to their GST returns and claim missed ITC. However, since the last date does not coincide with the return filing due date, clarity is needed if the government will introduce new forms for taxpayers to report changes or omitted information. 

More than the extension of the time limit, taxpayers need tech systems and tools to reconcile GST data and easy vendor communication effectively. The Budget 2022 did not address these aspects. We must await more information regarding the implementation of the latest changes.

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