Changes related to GST Registration Application – Rule 8
• No requirement of mentioning Mobile No. and E-Mail address in the registration application.
• Mobile No. and E-Mail address will be directly fetched from CBDT Data base in GST Registration application and for conducting OTP based verification.
• In order to ensure the genuineness of the applicant, now the Application for registration requires biometric-based Aadhar authentication, along with verification of the original copy of other documents uploaded with the application for registration.
• Risk-based physical verification of the premises of the applicant will be carried out.
• This is a step toward stop the fraudulent registrations, however this may lead to hardship to the genuine tax payers.
• [Presently this provision is applicable only for the applicants in Gujarat State – Notification/ No. 27/2022 dated 26/12/2022)
Reversal of ITC for non-payment to Supplier within 180 days- Rule 37
- Rule 37 is amended substantially and accordingly It may be observed from the new sub-rule (1) reproduced above, that unlike the old provision, the period for which interest is payable is not specifically mentioned in the rule, but reference is made to Section 50 of the Act.
- In term of provision of Section 50 (3) read with Rule 88B (3), the liability to pay interest would arise only if the credit is wrongly availed & utilized and it shall be calculated for period starting from date of utilisation of said wrongly availed credit to date of reversal of such credit. So, if the taxpayer’s balance of credit is always more than the amount required to be reversed now, due to non-payment of consideration within 180 days, no interest liability would arise.
- Secondly, prior to this amendment, it had been explicitly provided in sub-rule (1) that taxpayer is liable to reverse only the proportionate credit attributable to the portion of the value, which is not paid within 180 days.
Relevant portion of Rule 37 as existed prior to amendment is reproduced below;
Reversal of input tax credit in the case of non-payment of consideration.-(1)A registered person, who has availed of input tax credit on any inward supply of goods or services or both, but fails to pay to the supplier thereof, the value of such supply along with the tax payable thereon, within the time limit specified in the second proviso to subsection (2) of section 16, shall furnish the details of such supply, the amount of value not paid and the amount of input tax credit availed of proportionate to such amount not paid to the supplier in FORM GSTR-2 for the month immediately following the period of one hundred and eighty days from the date of the issue of the invoice
- Amended Rule 37 (1) is silent about whether the taxpayers are liable to reverse the entire credit, even if only part of the value (and tax) is not paid within 180 days or it is sufficient if proportionate credit attributable to the value (and tax) which is not paid within 180 days is reversed.
- It is comprehended that in the absence of such clear stipulation in the amended rule, the department may demand reversal of entire credit, even if only part of the value (and tax) is not paid within 180 days.
- CBIC may like to issue a Circular and clarify the matter in the light of the recent amendments.
Reversal and re-availment of ITC where supplier has not paid GST – Rule 37A
The new provision has been inserted requiring the recipient to reverse the ITC before the 30th day of November following the end of such financial year, where the supplier has declared the details of outward supplies in FORM GSTR-1 or IFF, but has not been furnished the FORM GSTR-3B till the 30th day of September following the end of financial year.
This rule further states that where such ITC is not reversed by the recipient in FORM GSTR-3B on or before the 30th day of November of following financial year then such amount shall be payable along with interest thereon under section 50.
Here it is pertinent to note that interest liability will triggered if the reversal is not made before 30th day of November of the following FY, therefore if the reversal is made prior to that date then no interest shall be payable.
It is further stated that when subsequently the said supplier furnishes the return in FORM GSTR-3B The recipient may re-avail the amount of such credit in the return in FORM GSTR-3B for a tax period thereafter.
Amendments made in Invoice related Rules
Any taxable service is supplied by or through an Electronic Commerce Operator or by a supplier of OIDAR to an Unregistered Person, irrespective of value of supply, the Tax invoice shall contain following details:
- Name and address of the recipient
- PIN Code and the name of the State
Issuance of “Invoice-cum-bill of Supply” shall contain all the particulars, which are required to be mentioned on Invoice or Bill of supply under rule 46 or rule 54,
Updata ECL based on e-scroll of the RBI – Rule 87(8)
ECL can be updated on the basis of the e-scroll of the RBI, where the details as per e-scroll match with the details in challan in form PMT-06, even if the bank fails to communicate details of Challan Identification Number to the Common Portal.
Difference in liability reported in GSTR-1 & GSTR-3B – Rule 88C (New Rule)
BACKDROP FOR INSERTION OF RULE 88C
Section 75(12) of the CGST Act, 2017 allows for recovery of tax without the issuance of a Show Cause Notice under Section 73/74 of the CGST Act, 2017 where any amount of tax is self-assessed in accordance with the return furnished under Section 39 of the CGST Act, 2017. An explanation was added to the said sub-section by Finance Act, 2021 wherein the expression “self-assessed tax” included tax payable in respect of details of outward supplies furnished under section 37 (GSTR-1), but not included in the return furnished under section 39 (GSTR-3B). The said explanation was made effective from 01st January 2022.
There were many doubts raised by trade and the field formations about how the recovery on account of the mismatches between GSTR-1 and GSTR-3B would be dealt with by the Tax Authorities. On 7th January 2022, CBIC issued guidelines for recovery proceedings under the provisions of Section 79 of the CGST Act, 2017. It instructed for providing of opportunity to the affected taxpayer to explain the differences between GSTR-1 and GSTR-3B by sending a letter, before initiation of action under Section 79 of the CGST Act, 2017. To standardize the entire recovery proceedings, Rule 88C has been inserted in the CGST Rules, 2017.
PROVISION OF RULES 88(C)
• If Tax payable as per GSTR-1 exceeds Tax payable as per GSTR-3B, by specified percentage or amount as recommended by council, the taxpayer should be intimated of such difference in Part-A of Form DRC-01B, directing him to take any of the below action within 7 days:
Pay the differential liability along with interest u/s 50 through DRC-03; or
Explain the reason of differences on the common portal in Part-B of Form DRC-01B
• In case no action has been taken by taxpayer, such differential liability shall be treated as recoverable amount as per Sec: 79 of the CGST Act.
• Effective date of Rule 88C is not yet notified.
Restriction in filing GSTR-1 consequence to Rule 88C – Rule 59(6)(d)
Taxpayer to whom intimation in Part-A of Form DRC-01B has been issued for a tax period, shall not be allowed to file GSTR-1 for subsequent Tax period unless he has either paid differential Tax or submitted explanation for differences
List of Documents required for Refund applied by unregistered person – Rule 89(2)
HIGH COURT OF BOMBAY C.P. Ravindranath Menon v. Union of India [2022] 140 taxmann.com 466 (Bombay)
In the said case the refund application of the ultimate consumer has been rejected by the GST department on the ground that the said application has not been filed electronically hence not in compliance with the circular dated 18th November 2019. Wherein the Hon. Court has held that the ultimate consumer on whom incidence of tax has been passed on is eligible to refund of taxes paid, subsequent to cancellation of supply in respect of which said taxes were paid.
Therefore, in backdrop of the said decision enabling provisions has been inserted stating the document required for refund application by unregistered person
Application for refund must be filed along with following documents:
- Details of Statement 8 as notified u/r 89(2)(ka) of the CGST Rules;
- Copy of Invoices issued by supplier and payment proof related thereof;
- Copy of agreement or contract entered with the supplier;
- Letter issued by the supplier for cancellation or termination of agreement or contract;
- Details of payment received from the supplier against cancellation or termination along with proof
- Certificate issued by the supplier to the effect that he has paid tax, has not adjusted the tax amount
Note: Unregistered person who has borne the incidence of tax not required to submit a CA Certificate stating that he has borne the incidence of tax. [Introduction of proviso to Rule 89(2)(m)]
Appeal to Appellate Authority by Appellant being Registered Person – Rule 108
Prior to amendment, an appellant is required to filed certified copy of OIO physically, within 7 days of filing the appeal physically before the appellant authority failing which appeal could not be admitted. IN the era, where emphasis is placed to having all the communication in digital format over online portal. And as seem in above para refund application of unregistered person has been rejected on the ground that applicant has not made the application online.
Orrisa HC in Atlas PVC Pipes Ltd. v. State of Odisha [2022] 140 taxmann.com 162 stated that petitioner had enclosed copy of impugned order as made available to it in GST portal while filing memo of appeal, non-submission of certified copy, was to be treated as mere technical defect; therefore, its submission should be allowed.
In backdrop of the above following amendment has been made.
Appellate Authority or authorized officer shall issue final acknowledgement indicating appeal number in Form APL-02 when,
- Decision or order appealed against uploaded on common portal, or
- Decision or order appealed against not-uploaded on common portal and appellant submit a self-certified-copy of said decision/order within period of seven days.
| Whether decision or order appealed against uploaded on Common Portal? | Whether appellant submit a self-certified copy of said decision/order within period of seven days? | Date of filing Appeal |
| Yes | – | Date of issue of Provisional acknowledgement |
| No | Yes | Date of issue of Provisional acknowledgement |
| No | No | Date of Submission of Self-Certified-Copy of order |
Compulsory E-Way bill for movement of Imitation Jewellery – Rule 138
▪ E-Way bill required to be generated in case of movement of Imitation Jewellery w.e.f. 26.12.2022.
Facility of Withdrawal of Appeal- Rule 109C
- Appellant may file an application for withdrawal of appeal in Form APL-01/03W before issuance of the Order.
- Application for withdrawal after receipt of final acknowledgement in Form GST APL-02, would be subject to the approval of the Appellant Authority. And such approval shall be given within 7 days of filing application.
- Further any fresh appeal filed by the appellant pursuant to such withdrawal shall be filed within prescribed time limit.
