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Indirect Tax Alert - Indirect Tax changes effective January 1, 2022

01 January 2022

Goods & Services Tax

  • Scope of supply under section 7(1) (aa) of GST Act has been amended to include supply to its members by a person, other than an individual as ‘Supply’;
  • Taxpayer can avail the ITC on the invoice or debit note only after the details of such invoice or debit note are furnished by the supplier in their statement of outward supplies and appearing in GSTR-2A/2B. i.e The taxpayers can no longer claim 5% provisional ITC under the CGST Rule 36(4) and ensure every ITC value claimed was reflected in GSTR-2A/2B.
  • Closure of proceedings under section 73/74 (Demand/Recovery) are made independent of proceedings under section 129/130(Detention /Seizure);
  • Any liability declared in GSTR-1 but not paid through GSTR-3B is liable to be demanded. Self-assessed tax shall be determined as furnished in return in Form GSTR-1 and not as furnished in Form GSTR-3B. The GST officers can initiate recovery proceedings without any show-cause notice against taxpayers who under-report sales in GSTR-3B compared to GSTR-1.;
  • Taxpayers cannot file GSTR-1 if GSTR-3B of the previous tax period was not filed.
  • The power for provisional attachment to protect revenue in certain cases has been widened;
  • Appeal to the First Appellate Authority against a notice for seizure goods can be filed after payment of 25% of penalty;
  • Delinked the proceedings relating to detention, seizure and release of goods and conveyances in transit under section 129(6) of GST Act from the proceedings under section 130 relating to confiscation of goods or conveyances and levy of penalty;
  • Empowered Jurisdictional Commissioner to call for information from any person relating to any matter dealt with in connection with the GST Act by way of an order;
  • GST rate changes proposed for footwear products are applicable from 1 January 2022. However, the implementation of changes proposed for textile sector has been put on hold;
  • E-Commerce Operators (ECOs) will be liable to pay GST on any restaurant service supplied through them including by an unregistered person. ECOS will no longer be required to collect TCS and file GSTR-8 in respect of ‘restaurant services’ on which it pays tax under section 9(5) of the CGST Act, 2017, but will continue to collect TCS and file GSTR-8 for other services.
  • Mandatory Aadhaar authentication for claiming GST refund
  • The due date for furnishing GST Annual return for the FY 2020-21 has been extended to 28 February 2022.

Customs & FTP