CBIC notifies decisions from 47th GST Council meeting and provisions of Finance Act 2022

The Central Board of Indirect Taxes and Customs (CBIC) issued six new CGST notifications on 5th July 2022. Most of these are to implement the decisions taken at the 47th GST Council meeting. At the same time, one of the notifications implements some CGST Act amendments made by the Finance Act 2022.

These are referred to as the Central Tax Notifications 9/2022 to 14/2022 dated 5th July 2022, decoded as follows- 

Changes in the format of GSTR-3B

The Central Tax Notification number 14/2022 has altered some parts of the form GSTR-3B (monthly/quarterly summary return for regular taxpayers). The notification is based on decisions taken at the 47th GST Council meeting. 

The taxpayers can find new table 3.1.1 to separately report e-commerce sales classified under Section 9(5). E-commerce operators must furnish details in Clause (i) for sales made through them on which they pay taxes. At the same time, Clause (ii) must be reported by the e-commerce supplier or e-tailer. Corresponding changes are made in Table 3.2 and the instructions for accommodating the above new table.

In table 4, changes are made to parts (B) and (D). ITC reversed figure in Part (B) must be derived based on the CGST Rules 38, 42, and 43 as well as Section 17(5) against earlier CGST Rules 42 and 43. The heading in part (D) is changed to ‘Other Details’ from the earlier ‘Ineligible ITC’. Two rows are added under this part to report ‘ITC reclaimed which was reversed under Table 4(B)(2) in earlier tax period’ and ‘Ineligible ITC under section 16(4) and ITC restricted due to the place of supply provisions’.

Transfer of CGST cash balance to another GSTIN and interest on excess ITC

The first notification number 9/2022 implements Sections 110 and 111 of the Finance Act 2022, explained below. 

Section 110 of the Finance Act 2022 amended Section 49 of the CGST Act. It now allows one GSTIN to transfer the Central Goods and Services Tax (CGST) available in its electronic cash ledger to another GSTIN’s electronic cash ledger as CGST or IGST. It can be done in the capacity of a distinct person and subject to some conditions. There must be no pending tax payable in the transferor’s electronic liability ledger at the time of such transfer. 

A corresponding notification 14/2022 amending the CGST Rules directs businesses to use form PMT-09 to carry out such transfers online on the GST portal. However, the GST Network is yet to clarify if the GST system fully supports the functionality of PMT-09 for these changes.

Section 111 of the Finance Act 2022 makes a retrospective amendment to Section 50 of the CGST Act. Interest will be charged at 24% per annum on any excess Input Tax Credit (ITC) either wrongly claimed in returns or utilised from the ledger from 1st July 2017. The corresponding CGST Rule 88A is also amended vide the notification number 14/2022, which clarifies the first and the last day for interest computation for tax short paid, unpaid, and excess ITC.

Applicability of GSTR-9 or GST Annual Return for FY 2021-22 

 The next Central Tax Notification number 10/2022, dated 5th July 2022, defines the upper limit of turnover to be subject to annual return filing. Therefore, taxpayers with a yearly turnover of up to Rs.2 crore during the financial year 2021-22 need not compulsorily file GSTR-9 or annual returns.

Extension of timelines for composition taxpayers under GST

The due date to submit form CMP-08 containing the self-assessed tax for April-June 2022 is now pushed to 31st July 2022 from 18th July 2022. The Central Tax Notification number 11/2022 notifies the same as per the decision taken at the 47th GST Council meeting providing relief to the pandemic/flood-affected small taxpayers.

On the other hand, the filing of GSTR-4 for FY 2021-22 has found another extension by a late fee waiver for filing on or before 28th July 2022. The Central Tax Notification number 12/2022 notifies this extension, also in line with the Council’s recent decision. The previous deadline was earlier 30th June 2022.

Extension of the limitation period for various actions under the CGST Act

The tax officers get extended time up to 30th September 2023 to issue any demand orders to taxpayers (non-fraud cases) for unpaid or underpaid taxes, interest, fees, and penalties. Further, the pandemic period between 1st March 2020 and 28th February 2022 must be excluded for arriving at the limitation period to issue a demand order under this provision. 

These are outlined in the Central Tax Notification number 13/2022 to apply from 1st March 2020. The same notification excludes the above pandemic period for arriving at the limitation period for filing GST refund applications under Sections 54 or 55 of the CGST Act.

Notification 14/2022 amends several CGST Rules 

The following are some of the critical amendments to the CGST Rules passed on 5th July 2022-

• Rule 21A: Proviso added- Suspension of GSTIN for non-filing of returns (by composition and regular taxpayers) can be cancelled or revoked once the taxpayer files all the pending returns.
• Rule 46: clause (s) added- Suppose taxpayers’ total turnover exceeds the limit of Rs.20 crore in any year from FY 2017-18, notified for issuing e-invoices but also issues regular invoices for some non-e-invoicing cases. They must declare that although they are subject to e-invoicing, they need not raise e-invoices for such cases.
• Rule 86: sub-rule (4B) added- Re-credit back into the electronic credit ledger for any erroneous refund of accumulated ITC will be done using form PMT-03A.
• Rule 87: sub-rules (3) and (5) modified- Immediate Payment Services (IMPS) and Unified Payment Interface (UPI) are the newly added options for depositing GST.
• Removal of 95A rule on GST refund for tax-free sales by the retailers in the International Airport to outgoing international tourists.
• Modifications were carried out in GSTR-9 and GSTR-9C formats to cover FY 2021-22 in the instructions.
• Suitable modifications were made to the formats of PMT-09, RFD-01, PMT-07, PMT-06, and insertion of a new format for form PMT-03A (Order of re-credit of the amount to electronic credit ledger) for the above rules.

Notification on several other Council’s decisions, including the opening up the composition scheme to the intrastate e-commerce suppliers, is still awaited.

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