Goods and Service Tax came into effect from Jul 01, 2017, through Implementation of 101st Amendment of the constitution of India by the Indian Government. GST is meant to replace a slew of Indirect Taxes. But its implementation has faced criticism, and now it’s been more than two years since the implementation, but the Law is still not settled and notifications and circulars keep coming every other day to make changes in the Law. In this series, recently, a lot of notifications have come up to make changes in the Law to plug the loopholes and to make compliance easy for the taxpayer. Some of the changes are welcome, but some changes are facing criticism from the stakeholders.

In this blog, we will be sharing a summary of the Recent Changes in the GST Law, which we believe are Important and which our readers must be aware of.

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Recent Changes in GST Law

GSTR 9 AND GSTR 9C Related Changes

As we are aware that GSTR 9 is the Annual Return which all the taxable persons registered under GST excluding a few are required to file whereas GSTR 9C is the Reconciliation statement which is required to filed by all those who are required to get GST Audit done. The due date for both FY 2017-18 and 18-19 has been extended several times. GST Council has extended due date for FY 2017-18 to Jan 31, 2020, and for FY 2018-19 to Mar 31, 2020. GSTR 9 for those having Turnover up to 2 crores has been made optional. Government has made many fields optional in GSTR 9 and GSTR 9C. Further, CBIC has released an offline utility for GSTR 9C a few days back to enable the taxpayers to prepare Reconciliation offline.

Reduction in Late Fee for Filing Returns

Late Fee Payable u/s 47 has been waived off for the registered person who fails to furnish GSTR-1 for months/quarters from July 2017 to November 2019 by the due date but furnishes such returns between the periods from Dec 19, 2019, to Jan 10 2020.

Automated Refund

The refund process has been made fully electronic through FORM GST-RFD 01. You can refer the circular No. 125/44/2019- GST Dated Nov 18, 2019, for the procedure.

Wrongly Paid Tax Correction

Government has introduced Form PMT-09 wherein now a Taxpayer can shift the tax paid under the wrong head to right head. This means now a Taxpayer can shift Tax, Interest, penalty etc paid under wrong head in electronic cash ledger to a correct head under IGST, CGST and SGST in electronic cash ledger.

Denying Facility to Generate E-way Bill due to Non-Furnishing of Returns

CBIC has issued a notification no. 22/2019 dated Apr 23, 2019, notifying 21.06.2019 as the date of Applicability of Rule 138E.Rule 138E lays down the restriction on furnishing information in PART A of Form GST EWB-01 if supplier or recipient fails to furnish a return for two consecutive tax periods.

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Restriction on Availment of ITC

CBIC vide Notification No. 49/2019-Central Tax, dated Oct 09, 2019, has inserted Sub-rule (4) to rule 36 of the Central Goods and Services Tax Rules, 2017 (hereinafter referred to as the CGST Rules). This rule provides for restriction on the availment of ITC in respect of invoices or debit notes which have not been uploaded by the supplier.

Earlier the restriction on the availment of ITC in respect of invoices and debit notes which have not been uploaded by the supplier was 20% of the ITC of invoices/debit notes which have been uploaded by supplier Now, further, vide Notification No 75/2019 Dated Dec 26, 2019, the said limit of 20% has been further reduced to 10%.

Blocking of Input Tax Credit- Rule 86A introduced in CGST Rules

Rule 86A has been introduced vide notification 75/2019 Dated Dec 26 2019. As per plain reading of this rule, it has given Drastic powers to the Revenue to restrict ITC by imposing additional conditions for availing ITCFollowing points merit consideration as per newly introduced Rule 86A:

  1. a) Restrict ITC if ITC has been availed on the basis of documents prescribed under Rule 36, but the supplier is found non- existent or not conducting business on its registered place of business.
  2. b) Restrict ITC has been availed on the basis of prescribed documents, but Goods or Services has not been received.
  3. c) Restrict ITC availed on the basis of prescribed documents, but no tax has been paid to the Govt by the supplier.
  4. d) Restrict ITC if the registered person availing the credit is found non-existent or not conducting business from the registered place of business.
  5. e) Restrict ITC if the registered person availing the credit does not possess the documents

Standard Operating Procedures to be followed in case of Non- Filers of Returns

CBIC has recently issued a circular 129/48/2019 dated 24.12.2019 to clarify that in case of non-furnishing of GSTR 3B, GSTR 4, GSTR 7, GSTR 8 etc. notice in form GSTR-3A shall be issued and best judgement shall also be made.

Following Points summaries the main Intent of the Circular:-

a) In case of non-furnishing of return u/s 39 (GSTR 3B, GSTR 4, GSTR 6, GSTR 7 & GSTR 8), u/s 44 (GSTR 9 & GSTR 9C), u/s 45 (GSTR 10) notice shall issue in FORM GSTR 3A to a registered person.

  1. b) After the service of notice in Form GSTR-3A, the registered person will be required to furnish returns within 15 days of issuance of notice in Form GSTR-3A.
  2. c) The assessment shall be made u/s 62 if returns are not furnished even after service of notice in FORM GSTR-. However, no Best Judgement Assessment shall be made in case of non-furnishing of GSTR9/9C

Provisional Attachment of Property/ Bank Account in case of failure to Furnish Return

As per Standard Operating Procedure Circular issued on Dec 24 2019, in deserving cases, a proper officer in case of non-furnishing of returns may resort to provisional attachment before issuance of Form GST ASMT-13. The further proper officer may initiate proceedings under 29(2) for cancellation of registration.

Changes in the GST Rates for Various Services

Earlier Restaurant Services other than at specified premises, Outdoor catering, Outdoor catering at premises other than specified premises were subject to 2.5% without ITC/ 9% with ITC.W.E.F 01/10/2019 the above are subject to GST Rate 2.5% without ITC

Supply of hotel accommodation having a value of supply of a unit of accommodation above Rs 1,000/- but less than or equal to Rs 7,500/- per unit per day or equivalent the rate now is 6%.

Supply of hotel accommodation having a value of supply of a unit of accommodation above Rs. 7,500/- per unit per day or equivalent the rate now is 9%. 

As we mentioned at the start, the Law is still not settled, and we see notifications/circulars coming every other day. In this blog, we have tried to cover the major notifications/circulars. We have tried our level best to present the Law correctly. You can comment in case you find any error or if you wish to add something.

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