Date of effect as 01.10.22 to the changes made in Finance Budget 2022 is notified

The Central Government has appointed 01.10.2022 as the date on which the provisions of sections 100 to 114, except clause (c) of section 110 and section 111, of the Finance Act, 2022 shall come into force vide Notification No. 18/2022-Central Tax dated 28.09.2022 & Notification 19/2022-Central Tax dated 28.09.2022.

Some amendments has been discussed below:

1. Section 16(1) is amended to insert new clause (ba). The new clause provides that the invoice details communicated by the supplier to recipient should not be restricted for claiming credit. This implies, the invoice appearing in GSTR-2B should not be restricted for claiming input tax credit.
2. Section 16(4) is amended to substitute the text “due date of filing of September month return” with the word “30th November. This implies that the input tax credit of previous year invoice or debit note is allowed to be claimed up to the compliance/return to be filed upto 30th November. Since the return for the month of October is filed in November, it is understood that upto 31st Oct. the benefit of claiming input tax credit is now available.
3. Section 34 is amended to extend the time limit for issuing credit note on previous year invoice till 30th November. Credit note for various reasons for previous year supplies can be issued up to due date of September month return of next financial year. Now, the word “September” is substituted with “30th day of November”. This implies that the supplier can raise credit note or debit note on previous year invoices up to the compliance to be done before 30th November of the next financial year. Since the return for the month of October is filed in November, it is understood that upto 31st Oct. the benefit of issuing credit /debit note is now available.
4. Section 37(1) is amended to add the word “subject to such conditions and restrictions, within such time and in such manner as may be prescribed” after the word “shall furnish (GSTR-1) electronically”. This implies GSTR-1 will be allowed to file subject to fulfilment of such conditions and restrictions and within such time and in such manner as may be prescribed by Govt.
5. Section 37 prescribes the time limit for amendment of previous year outward invoice, debit note or credit note furnished in GSTR-1. The said section is amended to substitute the word “till the due date of September month GSTR-1” by up to “30th November” of next year. Now, if there is any error or omission of the details furnished in GSTR-1 of previous year invoice/ debit note or credit note then rectification of the same can be done up to compliance to be filed upto 30th of November of next financial year.
6. Sub-section (4) is inserted to Section 37. The new sub-section (4) shall provide that if any tax payer has not filed GSTR-1 of the previous tax periods then he will not be allowed to file GSTR-1 of the current tax period.
7. Section 38 provides that the details of outward supply furnished by supplier in GSTR-1 is communicated to the recipient of such supplies thru GSTR-2A/2B. This section is amended to prescribe following conditions and restrictions in the manner that it shall consist of –
   1. a) details of inward supplies in respect of which input tax credit is available to the recipient
   2. b) details of inward supplies in respect of which input tax credit is not available to the recipient for the reason that –
      1. i) the supplier has uploaded invoices within such period of taking registration
      2. ii) by the supplier who has defaulted in payment of GST liability
      3. ii) by the supplier who has furnished outward supplies details in GSTR-1 in excess to the outward supplies shown in GSTR-3B
      4. iii) by the supplier who has claimed input tax credit more than the credit appearing in GSTR-2A/2B as available credit.
      5. iv) by the supplier who has defaulted in considering sec. 49(12) while making GST payment. sec. 49(12) states that Govt. may prescribe maximum input tax credit that can be utilised to pay GST liability. This means certain portion of GST liability to be paid by cash.
8. Section 39(9) provides for the time limit to make correction in the details furnished in GSTR-3B. The said section is amended. For the word “up to the due date of filing of Sept month’s GSTR-3B the word “30th November” has been substituted. This means that any correction in the details of previous year information furnished in GSTR-3B can be corrected upto the return to be filed on or before 30th November of next year.
9. Section 41 provides for claim of input tax credit on a self-assessed basis. The section is amended to add a condition that if GST is not paid by the supplier then the recipient shall reverse the input tax credit so claimed as self-assessed. Further, if the supplier makes payment of GST then the recipient can re-avail the credit. In line with this amendment Rule 37 is amended.
10. New sub-section (12) is inserted in sec. 49 to provide that the Govt. may specify such maximum proportion of output tax liability which may be discharged thru electronic credit ledger by all registered person or class of registered person. This means that certain portion of GST liability will have to be discharged thru electronic cash ledger.
11. Section 50(3) is amended to provide that the condition that if input tax credit is availed and also utilised then interest shall be applicable @ 24% p.a.
12. Rule 21 provides list of scenarios which can lead to cancellation of GST registration. In said rule, new clause (h) and (i) is added. The new clause (h) states that if GST returns are not filed by a monthly filer for a continuous period of six months then GST registration may be cancelled.
13. Rule 36(4) is amended to add the word “input tax credit in respect of” in the clause (b). The amended clause (b) reads as “no input tax credit shall be availed by the recipient unless “the details of input tax credit in respect of such invoices or debit notes is appearing in GSTR-2B. This implies that existence of the invoice details in GSTR-2B is the most important thing for claiming input tax credit. As aforesaid, the Govt. may add a column in GSTR-2B to indicate the input tax credit as available. If yes, then the input tax credit is allowed to be claimed. If not, then credit cannot be taken.
14. GSTR-1A, FORM GSTR-2 and FORM GSTR-3 as envisaged in 2017 is now omitted. These forms never came into implementation.
15. Press Release -Whether the above mentioned amendments are applicable for FY 2022-23 or for the compliance of FY 2021-22 to be filed before 30th November. It is hereby clarified that the above amendments are applicable to the compliance of FY 2021-22 onwards. It is further clarified that the above compliances (i.e. time limit for corrections/time lime to claim ITC etc.) for a financial year can be carried out in the relevant return or the statement filed upto 30th November of the next financial year.