Revisiting the Finance Bill 2022’s 15 GST Proposals

Union Budget 2022 has brought multiple changes and modifications in income tax-related services. The recovery from a pandemic, financial challenges and opportunities all combined and bring us the ultimate Union Budget of the year 2022.

Let’s recall some of the most prominent GST proposals in Finance Bill 2022.

1. The deadline for claiming ITC under Section 16(4) has been extended from September 30 to November 30 of the following year.
2. Additional Condition for ITCUndero Section 16(2): ITC can only be claimed if it is not restricted in GSTR-2B.
3. Composure If a taxpayer has not filed their GSTR-4 return within 3 months of the required date, their registration may be terminated suo moto.
4. Credit Notes for supplies made during a fiscal year can be issued by November 30th of the following fiscal year (currently allowed till 30th September)
5. Any correction of an error in GSTR-1/ GSTR-3B is now allowed until November 30th of the following fiscal year (currently allowed till 30th September).
6. The two-way communication process for GST returns is no longer in use.
7. The due date for a non-resident taxable person to file a return is the 13th day of the following month.
8. Section 41 of the CGST Act is being replaced to eliminate the concept of a “provisional” ITC “claim.”
9. The CGST Act is being amended to allow for the imposition of late fees for late filing of TCS returns.
10. The CGST Act’s Section 49 will be amended to impose limitations on the use of the electronic credit ledger’s available funds.
11. The CGST Act is being amended to allow the transfer of funds from a registered person’s E-cash ledger to the E-cash ledger of a distinct person.
12. The CGST Act’s Section 49 will be amended to specify the maximum percentage of output tax liability that can be discharged through the electronic credit ledger.
13. Section 50(3) of the CGST Act is being retroactively amended, with effect from July 1, 2017, to provide for the levy of interest on incorrectly claimed and utilised input tax credits. (This means that if the ITC is not used, no interest will be charged.)
14. Any balance in the electronic cash ledger must be available for refund claims.
15. Under Section 50(3), the interest rate is set at 18 per cent in all cases.

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