• Notification Date: 02.02.2022
• Notification No: N/A

Top Five GST Amendments

The new Budget 2022 has given several reasons to dream about a better economic condition for the country in the future. The Budget Speech as well as the economic survey of 2021 has assured that the economy of the country will be revived after overcoming the ill-effects of the Covid-19 pandemic. Several aspects such as the reduced deficits, improved foreign exchange reserves, and GDP growth have proven that the country’s economy is moving in the right direction.

The proposal of direct and indirect taxes was presented. There have been several amendments in the GST laws in the Budget 2022. The main five changes have been discussed here.

1. Conundrum of Electronic Ledgers

The new Budget has introduced a new change on the cash balance transfer from one person to another. The transfer can be made within the same registration. It can be done through CGST and IGST to the cash ledger of a distinct person. The term ‘distinct person’ is used to refer to a person with different GSTINs but the PAN number is the same. With the help of various GSTINs, the individual can transfer cash in other states as well. It helps to avoid situations where one GSTIN has excess balance and an output liability is paid in a different state. In case the taxpayer is transferring the balance to a different state to set off the liability, then the process of refund and granting are allowed to be omitted.

Some restrictions will be applicable while using an electronic credit ledger. Litigations have been made regarding the queries on pre-deposit required for filing appeals through debiting credit ledger.

2. The ITC Puzzle

The Input Tax Credit provisions under GST have faced several amendments. A new amendment has been introduced in the ITC provisions in 2022. According to one of the provisions, the claim of ITC reflected in GSTR 2B is eligible. The taxpayers have to stick to this additional compliance. The ITC of a financial year used to be available before the GSTR 3B of September of the upcoming year in the past.

3. Provisions on Interest

The GST laws have been amended in the Budget to highlight that interests will be charged in case of availing and utilizing ITC wrongly. The decision is brought into action from July 1, 2017.

4. Timelines for Various Compliances

The timeline for other compliances is November 30 of the next year, according to the new guidelines. This includes the rectifications that are necessary for outward supplies concerning that particular financial year. The credit notes are to be issued according to that year. These changes will help to provide some relief to the assessees.              

5. Make in India and SEZs

Finance Minister has introduced the ‘Make in India’ initiative in the Budget. The initiative has been taken with the intention to focus on custom-related changes. 350 exemptions that are allotted to imported goods will have perished and new exemptions will be introduced to import of inputs. This new initiative will merge hand-in-hand with the Make in India initiative and help to boost the domestic manufacturers.

The Special Economic Zones Act, 2005 has been altered to new legislation. The details are yet to be disclosed.

Apart from these five changes, other crucial changes have also been introduced related to GST in the Budget. Among the other changes, the important ones are the change in the date of filing the tax return for the non-resident taxpayers, the cancellation of GST registration in case of failure of return files for a continuous period, and the late fee charges applicable on delayed TCS file returns.