Major Amendments made in Finance Act 2022 notified w.e.f. 01 October 2022 - GST Update

Amendments made in Finance Act 2022 notified w.e.f 1st October 2022 vide Notification No. 18/2022 – Central Tax, F.No.CBIC-20013/1/2022-GST, Dated 28th September 2022

Finance Act 2022 made around fifteen amendments which include omissions, insertions, and substitutions made in the CGST Act 2017.  They were covered by section 100 to section 114 of the Finance Act, 2022 (6 of 2022). All the amendments made in the Finance Act, 2022 have been notified. 

The following notifications have been issued by the Ministry of Finance in order to notify the applicability and the effective date of the amended/introduced sections. Notify Date as 01-10-2022 of Section 16, 29, 34, 37, 38, 39, 41, 47, 48, 49, 52, 54, 168 and omitted 42, 43, 43A, of CGST Act 2017

Brief Summary of Major Amendments /Relaxations

1. Extension in the time limit to claim ITC under GST: It seeks to amend section 16(4) of the CGST Act, 2017 so as to provide that a registered person shall not be entitled to take the input tax credit in respect of any invoice or debit note after the thirtieth day of November (Earlier this date was 20th Oct i.e. due date for filing GSTR -3B for September) following the end of the financial year to which such invoice or debit note pertains, or furnishing of the relevant annual return, whichever is earlier. 

ASC Interpretation: As per the Notification No. 18/2022 of Central Tax, ITC in respect of invoices pertaining to a financial year can be claimed upto 30th November of the next financial year.

2. Amendment in sub-section (2) of section 34 of the CGST Act: To provide for the thirtieth day of November following the end of the financial year, or the date of furnishing of the relevant annual return, whichever is earlier, as the last date for issuance of credit notes in respect of any supply made in a financial year.

ASC Interpretation: As per Notification No. 18/2022 of Central Tax, the date of issuance of credit note in respect of invoices pertaining to a financial year has been extended till 30th November of the next financial year.

3. Amended sub-section (10) of section 49: To allow transfer of amount available in electronic cash ledger under the CGST Act of a registered person to the electronic cash ledger under the said Act or the IGST Act of a distinct person. It also seeks to insert sub-section (12) so as to provide for prescribing the maximum proportion of output tax liability which may be discharged through the electronic credit ledger.

ASC Interpretation: Further amount available in Electronic Cash Ledger of a registered person is now transferable to its deemed distinct person (Having same PAN with different GSTN) under the said amendment. (Facility will be available shortly at GSTN portal)

4. Section 16 of the CGST Act, 2017: By inserting a new clause (BA) in sub-section (2) thereof, so as to provide that input tax credit with respect to a supply may be availed only when such credit has not been restricted in the details communicated to the registered person under section 38. 

ASC Interpretation: A new clause has been inserted under section 16 (2) of CGST Act 2017 namely (ba) for providing restrictions in respect of details communicated to registered persons under section 38.

Further, the old section 38 has been replaced with the new one to prescribe the manner, time, conditions and restrictions for communicating details of ITC through an auto-generated system. Also providing for ITC that can be availed or can-not be availed by the recipient.

5.    For Section 38 of CGST Act, 2017 following section shall be substituted namely-

1. The details of outward supplies furnished by the registered persons under section 37 (1) and of such other supplies as may be prescribed, and an auto-generated statement (GSTR-2B) containing the details of the input tax credit shall be made available electronically to the recipients of such supplies in such form and manner, within such time, and subject to such conditions and restrictions as may be prescribed.
2. The auto-generated statement under sub-section (1) shall consist of–

• details of inward supplies in respect of which credit of input tax may be available to the recipient; and
• details of supplies in respect of which such credit cannot be availed, whether wholly or partly, by the recipient, on account of the details of the said supplies being furnished under sub-section (1) of section 37,–
  • by any registered person within such period of taking registration as may be prescribed*; or
  • by any registered person, who has defaulted in payment of tax and where such default has continued for such period as may be prescribed*; or
  • by any registered person, the output tax payable by whom in accordance with the statement of outward supplies furnished by him under the said subsection during such period, as may be prescribed, exceeds the output tax paid by him during the said period by such limit as may be prescribed*; (GSTR-1 VS GSTR-3B) or 
  • by any registered person who, during such period as may be prescribed, has availed credit of input tax of an amount that exceeds the credit that can be availed by him in accordance with clause (a), by such limit as may be prescribed*; (Supplier’s GSTR-3B VS GSTR -2B) or
  • by any registered person, who has defaulted in discharging his tax liability in accordance with the provisions of sub-section (12) of section 49 subject to such conditions and restrictions as may be prescribed*; (Restriction in Credit Ledger) or
  • by such other class of persons as may be prescribed

ASC Interpretation: A new section 38 has been introduced for the restriction of ITC to claim in GSTR-3B by the recipient. There are so many rules in this relationship which are not yet prescribed.

Following are the Key amendments made under made in Finance Act 2022 notified w.e.f. 01 October 2022. If you need any assistance or clarification with the GST, feel free to contact the ASC Group.
 

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