Highlights of the Various GST Amendments

Dear Sir/Madam,

 

The CBIC has issued several notifications making various changes to the GST provisions and procedures. A brief summary of the changes made are given below for information:

 

Various provisions of the Finance Act 2020 have been notified to be effective from 1st January 2021. Few important changes are given below:

• Time limit for taking ITC on debit notes have been provided up to September return of next financial year if the debit note pertains to the current financial year. Earlier the date of original invoice corresponding to such debit note was the relevant document based on which the time limitation for availing ITC had to be calculated.
• Effective from 1st January 2021, a person opting for voluntary registration can also opt for cancellation of registration if he longer requires the registration. He was barred from doing so earlier.
• The period of revocation of cancellation of registration can be extended by further 30 days if allowed by the Additional Commissioner or Joint Commissioner. Also, the Commissioner has been empowered to grant a further extension of 30 days beyond the period allowed by the Joint/Additional Commissioner.
• Apart from the taxpayers involved in fake invoicing, even the beneficiaries of such fake invoicing have been made liable to penalty.
• Availment of input tax credit on the basis of invoice not accompanied by supply or without invoice has been declared one of the offences u/s 132 for prosecution.

 

Certain amendments made to the return filing process and other procedural requirements. Key highlights are given below:

Amendment to Rule 36(4)

• ITC under Rule 36(4) shall be restricted to an additional 5% of eligible credits appearing in the GSTR2A with effect from January 2021. Earlier, this limit was 10%.

Restriction on filing GSTR 1

• The taxpayers will not be allowed to furnish form GSTR 1 if they have not furnished their Form GSTR 3B for preceding two months.
• In case of registered person, required to furnish return for every quarter shall not be allowed to furnish the details of outward supplies of goods or services or both in FORM GSTR-1 or using the invoice furnishing facility, if he has not furnished the return in FORM GSTR-3B for preceding tax period.

Restrictions on use of amount available in electronic credit ledger.-

• The registered person shall not use the amount available in electronic credit ledger to discharge his liability towards output tax in excess of ninety-nine per cent. of such tax liability in the cases where the value of taxable supply other than exempt supply and zero-rated supply exceeds Rs.50 lakhs in a month.
• The above restriction shall not apply in the following cases:

• • Taxpayer who has paid Income Tax exceeding ₹1 lakh in two preceding financial years.
  • Taxpayer has received a refund under Section 54 exceeding ₹1 lakh in the preceding financial year.
  • Taxpayer has paid outward tax liability in cash which cumulatively exceeds 1% of total tax liability up to the said month in the current financial year. RCM paid or IGST paid on imports are not considered for computing 1%.
  • the registered person is –

(a) Government Department

(b) Public Sector Undertaking

(c) Local authority

(d) Statutory body

Amendments relating to E way Bill

• An E-Way Bill or a consolidated E-Way Bill generated under this rule shall be valid for the period as mentioned in column (3) of the Table below from the relevant date, for the distance the goods have to be transported, as mentioned in column (2) of the said Table

1	2	3
Type of Conveyance	Distance	Validity of E-Way Bill
Other than the over dimensional cargo	Less than 200 Kms	1 Day
Other than the over dimensional cargo	For every additional 200 kms or part thereof	Additional 1 day

• Earlier the validity of the e-waybill was 1 day for each 100 Km. Now this limit has been changed to 200 Km.
• As per Rule 138E in the CGST Rules which restricts generation of E-way bill by the taxpayer if the returns for a consecutive period of two months has not been furnished. For the words “two months”, the words “two tax periods” shall be substituted with effect from January 2021.
• Where the GST registration of a taxable person has been suspended neither the taxpayer/recipient nor the transporter will be able to generate E-way bill.

Kindly take note of the amendment. If you need any detailed clarification/explanation, feel free to reach to us.