Finance Act, 2022 introduced various amendments under GST Law.
An effect from 1st October 2022, the following amendments are made applicable. A brief summary of relevant changes/relaxations
ITC Restriction – Amendment of section 16: A new sub-section has been inserted i.e. Section 16(2)(ba) to restrict the ITC to the extent available in lines with Section 38 (i.e. auto generated statement or GSTR 2B).
That means if the Supplier has not filed his R1 i.e. 2B for you then You will not able to Claim ITC until he files the same.
Time Limit for Claiming ITC – Last date to claim ITC for the month of September has been extended till 30 day of November following the end of the FY to which such ITC pertains, after the Lapse of this time ITC will become ineligible.
Cancellation of registration – Amendment of section 29 : cancellation of registration for non filing of GST return for Composite dealer GSTR4
Earlier the wordings in the section “returns for three consecutive tax periods” were not clear that from which date the count for 3 years start now these words are substituted with “return for FY beyond three months from the due date of furnishing the said return”
So here it is cleared that from the date of furnishing GSTR4 if return not filed for # months than the officer has right to cancel GSTN.
Also , in the clause for normal tax payer the words “ Continuous period of six months” have been substituted with words “such continuous tax periods as may be prescribed” and this is yet to be prescribed now.
Time Limit to Issue Credit Note – Amendment of section 34: Last date to report & avail tax adjustment of credit note has been extended till 30 day of November following the end of the FY to which such credit note pertains.
Earlier it was time limit to avail ITC and time limit to issue credit note was same now since we can understand the time limit to avail ITC is changed and so is the time limit to issue credit note.
So For FY 2021-22 you can issue credit note till 30th November. This is effective from 1st October 2022 now.
Changes Related to R1– Important Amendment of section 37: Last date for rectification of error in respect of outward supplies can be made till 30 day of November following the end of the FY to which such invoice pertains.
Also the sequence of filing the return has to be followed, suppose if thr GSTR1 of previous period not filed then the current year return will not be allowed to furnish, actually this was in practice already but now put in the words of law also.
New section for section 38 :Only the eligible ITC which is available in the GSTR-2B (Auto generated statement) can be availed by the recipient. Now, GSTR-2B will become the main document relied upon by the tax authorities for verification of the accurate ITC claims.
Changes related to 3B for NRTP – Amendment of section 39 : Non-resident Tax payer due date is shifted from 20th to 13th of the following month.
Availment of Input Tax credit – Substitution of new section for section 41.
The amendment has put concept of availing input tax credit on a “provisional” basis” to an end. Now the ITC availment shall be restricted to the conditions provided under section 16 of the CGST Act read with Section 38. –sections 42, 43 and 43A stands omitted now:
Provisional claim of ITC gone away hence, the provisional ITC claim process, matching and reversal also gets eliminated.
New condition for availment inserted in this section : If supplier has not filed GSTR3B i.e. not paid taxes then You will not be allowed to claim tax credit. Whenever the supplier will file and pay taxes then you can reclaim the ITC after he has complied with the law.
Levy of late fee for TCS filers– Amendment of section 47 : It is amended to levy of late fee for delayed filing of return under Section 52 (TCS return GSTR-8 ) and now for this Section 38 reference stands removed.
Amendment of section 49: Clause C related to Inter transfer of GST liability from one branch to other is not applicable from 01 October 2022, this is not put in effect more clarity and notification is yet to be notified.
Rectification of return-Amendment in Section 52: If the Ecommerce operator has filed wrong return in this section then the time limit to rectify the same is now 30the November in contrast to earlier provision which was due date of September month 3B