The government has notified a host of procedural changes in the GST rules, including levy of interest for wrongful utilisation of ITC and turnover threshold for filing annual returns for the 2021-22 fiscal.
The changes were vetted by the Goods and Services Tax (GST) Council at its meeting last week.
With the amendments notified by the Central Board of Indirect Taxes and Customs (CBIC), businesses have also been allowed to make tax payments on the GSTN portal by using IMPS and UPI payment modes.
Businesses with aggregate annual turnover of up to Rs 2 crore in the fiscal ended March 31, 2022, are exempt from filing annual returns for 2021-22, as per the amended rules.
The amendment also clarified that interest on incorrect availment of input tax credit (ITC) would only apply in cases where such credit is utilised.
The Finance Act had brought in a provision related to levying of interest on ITC wrongly availed and utilised.
The provision would come into effect from July 5 and would apply retrospectively from July 1, 2017, -- the date of GST rollout.
Deloitte India Partner, Leader – Indirect Tax, Mahesh Jaising said the notification issued for retrospective amendment to Section 50(3), clarifying that interest on incorrect availment of credit would only apply in cases where such credit is utilised, is a welcome one.
KPMG Tax Partner Abhishek Jain said the GST law has been suitably amended to say that interest shall be payable only in respect of the ITC availed and utilised.
"This change is much appreciated, and puts a final close to this issue."
The amendments also provide for automatic revocation of GST registrations cancelled once the return filing is regularised.
"This will reduce the time and effort spent by taxpayers in getting registrations revoked even after regularisation of the return filings.
"It will reduce the interaction and improve the faceless compliances under GST,” Jaising said.
Jain said these changes in rules would also help the small players in undertaking compliances, and will lighten the burden for taxpayers with less than Rs 2 crore turnover to the extent of filing of annual returns under GST.
AMRG & Associates Senior Partner Rajat Mohan said other important changes include extension of time-limit specified under Section 73 (determination of tax) under the GST Act for issuance of an order for FY 2017-18 to September 30, 2023.
However, no extensions have been provided for any other financial year.
"In relation to the delayed filing of refund applications during the COVID period (March 1, 2020 to February 28, 2022), suitable extension has been granted that will enable numerous exporters to encash the refunds stuck in litigation," Mohan said.
Jain said that considering the COVID scenario of the last two years for India, the government has extended the limitation period under GST for issuance of notice to taxpayers who have not paid/ short paid the tax due.
Similarly, relaxation in limitation is granted for filing refunds.
"While the intention of the government is to curb revenue leakage, this change keeps the businesses exposed to departmental audits and assessments for some additional time.
"This being said, this change also ensures that genuine taxpayers are not denied their refund claims," Jain added.
According to Mohan, the manner of calculation of interest on delayed payment of tax has been notified and that would help taxpayers in making precise calculation of the tax dues.
As per the amended rules, every invoice issued by an MSME supplier will have a standard declaration printed on invoice regarding non-applicability of e-invoice.
Also, cash ledger balance can be transferred from one GST registered entity to another under the same PAN.