PGA & Co, the best GST consultants provides a key highlights of the proposed changes to GST laws in the Union budget 2021 in simple and easy language.
- Scope of term ‘supply’ enhanced to include transactions involving supply of goods or services by any person (other than individual) to its members or constituents and vice-versa for cash, deferred payment or other valuable consideration. Further, the person and its members shall be deemed to be separate entities and transactions between them shall be deemed to take place from one person to another. Similar provision specified under Paragraph 7 of Schedule II to the CGST Act has been omitted. Aforesaid provisions have been made effective retrospectively from 1 July 2017.
- Section 16 of CGST Act amended to provide that input tax credit shall be available to the recipient once the tax invoice or debit note has been reported and reflected on the GSTN portal by the supplier i.e. 100% matching of invoices with GSTR-2A will be made mandatory from the date when this becomes effective.
- Section 35(5) of CGST Act has been omitted thereby, removing the requirement for furnishing of GST audited annual accounts and reconciliation statement.
- Section 44 of CGST Act has been substituted to provide that every registered person shall furnish an annual return which may include a self-certified reconciliation statement, reconciling the value of supplies declared in the return furnished for the financial year with the audited annual financial statement for every financial year.
- Also, Section 44 of the CGST Act now provides that the Commissioner may exempt a class of registered person from filing annual return, by notification. Further, the provisions of annual return shall not be applicable to any department of Central Government, State Government or local authority, whose books of account are subject to audit by the Comptroller and Auditor General of India or an auditor appointed for auditing the accounts of local authorities under any law for the time being in force
- Section 74 of CGST Act amended to make seizure and confiscation of goods and conveyances in transit, a separate proceeding from the recovery of tax and the same to be adjudicated independently as per respective Section 129 and 130 of CGST Act
- The enabling amendment in Section 50 of CGST Act has been made, which provided for payment of interest only on tax liability paid in cash has been made applicable retrospectively w.e.f. 1 July 2017.
- Section 16(1)(b) of the IGST Act has been amended to provide that supply of goods or services to SEZ developer/ unit would be considered as zero-rated supply, only where the same is used for authorized operations of SEZ.
- Section 16(3) of IGST Act provides that in case of non-realisation of sale proceeds within nine months from the date of export, the registered person shall be liable to deposit the refund so received along with interest @ 18% within 30 days after the expiry of nine months
- Now, the refund with payment of tax in case of zero-rated supplies i.e. export will be restricted to a notified class of exporter/ notified supplies of goods and services.
- Section 83(1) of CGST Act has been amended to provide that in the interest of revenue, the Commissioner may, in the manner as may be prescribed, after the initiation of proceedings, attach provisionally, any property/ bank account belonging to the taxable person, pertaining to assessments, inspection, search, seizure, arrest, demand and recovery.
- A proviso to Section 107(6) of CGST Act has been inserted to provide that no appeal shall be filed against an order made under Section 129(3) in regard to detention or seizure of goods or conveyances unless a sum equal to 25 percent of penalty has been paid by the Appellant. It means, now for filing an appeal, the taxpayers need to mandatorily deposit a 25% penalty to the department.
- Section 129 related to detention and seizure of goods amended to increase the penalty for taxable goods to 200 percent of the tax payable on the goods detained, where the owner comes forward for the payment of the said penalty. In case the owner does not come forward, a higher of penalty equivalent to 50 percent of the value of goods or 200 percent of taxes, would be applicable to get the goods released. Further, tax officer is required to issue the order within 15 days from such detention. Also, the transporter has been given an option to get his conveyance released on the payment of penalty so computed or INR 1 Lakh, whichever is less.
- Section 130 of the CGST Act (dealing with confiscation of goods or conveyances and levy of penalty) has been amended to delink such proceedings from Section 129 of CGST Act (detention, seizure and release of goods and conveyances in transit).
- Accordingly, reference to penalty under Section 129 has been replaced with a penalty equal to 100 percent of the tax payable under second proviso to Section 130(2)
- Section 151 of CGST Act is being amended whereby the Commissioner or any other officer authorized by him is empowered to collect any information from any person in any matter by the issuance of an order.
- Section 152 of the CGST Act has been amended to provide an opportunity of being heard to the concerned person with respect to information sought under Section 150 (Obligation to furnish information return) and Section151 (Power to collect statistics).
Although, being the best GST consultants, we always try to provide the correct and best analysis of the GST laws, however, PGA & Co, Chartered accountants Chandigarh, India DOES not accept any liability for any decision taken based on the above articles and consequences, if any.