gst-related-changes-on-2022-union budget

Modifications to Input Tax Credit (ITC) provisions

  • A new clause (ba) was added in Sub-section (2) of section 16. It will define the ITC for any supply that can be used only if that is not denied through the communication, under section 38 or GSTR 2B to the person, who was registered.
  • It is impossible to use ITC on any invoice or debit note for registered taxpayers following the financial end after Nov 30th to which such invoice related to or filing of annual return whichever is before.

Before, the mentioned section denied claiming ITC on any invoice or debit note linking to a specific financial year, if it was taken earlier than the due date of return filing for the September month or filing of annual return, whichever is before.

Modifications on GST registration cancelation

Section 29 amendment by union budget 2022. This amendment defines that the GST registration will be canceled/ignored by the officer,

  • If composition taxable person unavailable/failed to file GSTR-4 for the FY by Apr 30th of the upcoming financial year(FY), who is paying the tax under Section 10. 
  • If an individual excluding composition taxable person has failed for return filing for the FY for some continuous period as specified from time to time.

Extended the credit note-issuing time limit 

They extended the credit note-issuing time limit until Nov, 30th following the FY end or the date of filing the annual return, whichever is before.

Modifications on outward supplier furnishing details

  • It announced the condition for furnishing details for GSTR 1 outward supply and transmission of such information to the recipients through GSTR-2B.
  • Due to the suspension of GSTR-2, the 2-way communication process was canceled during return filing. 
  • For GSTR 1, errors for outward supplies can be rectified, as the date was extended to November 30th of the following financial year
  • It offers, without missing tax periods, outward supplies can be filed sequentially.

Update Section 38 on ITC claims

Section 38(1) is updated by defining terms and conditions for detailing inward supplies and ITC to the recipient by way of an auto-generated statement. This two-way communication process while filing the return is done away with, thus simplifying the process.

Changes regarding GSTR return furnishing 

  • By the following 13th of the month, a non-resident taxable person should GSTR 5 monthly return.
  • An option is provided to the return filing individual, under proviso to Sub-section (1) – as they can pay either the amount specified or self-assessed tax.
  • To solve the errors on GSTR 3B, an extension time limits up to Nov 30th of the following financial year has been provided.
  • For the stated tax period, filing GSTR 1 was included as the condition for GSTR-3B filing.

Updated and removed sections

It updated section 41 and removed sections – 42, 43, and 43A.

  • Based on section 41, the ITC claiming was substituted. It is substituted to dissolve the “claim” concept of qualified ITC temporarily and issued for availing self-assessed ITC as per specified terms and conditions. 
  • Based on 
  1. Matching, reversal, and reclaim of ITC of section 42, 
  2. Matching, reversal, and reclaim of reduction in an output tax liability of section 43,
  3. Guideline for furnishing returns and benefiting ITC of the CGST Act,

are deleted.

Modifications to the balance utility holding in the electronic credit ledger

  • It recommended the essential conditions for acquiring the remaining electronic credit ledger.
  • It permits to transfer of electronic cash ledger amounts from one person to another.
  • It recommended the maximum rate of discharge tax liability to be discharged, through the electronic credit ledger.

Changes in arrangements claiming refund of unused ITC

  • It directly and frankly announced that the refund of any electronic cash ledger balance can be used, only as specified. 
  • Inward supplies refund claim of ITC can be created within only 2 years of duration. And, this duration is from the final day of the quarter from which the supply is obtained.
  • To expand the area of this sub-section for all sorts of refunds.

Other miscellaneous amendments

  • Changes in the rule of Director resignation: Reference of Section 38 was removed.
  • The penalty for late GSTR 8 filing has been modified.
  • Under section 50 of the CGST Act, no charge of interest on ITC claimed wrongly but not used. It will be executed retrospectively from July 1st, 2017.
  • For rectifying errors on GSTR 8 TCS value, the extension has been provided until November 30th of the following financial year.
  • Under sub-section (2) of section 48, section 38 was fired.
  • Amendment of Notification No. 9/2018 dated on Jan 23rd, 2018, the central portal and other GST electronic portals as “”. The mentioned portal will be utilized for functions as mentioned in the 2017 CGST Rules, except required for e-way bills and e-invoicing. 
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