The Central Board of Indirect Taxes and Customs (CBIC) has announced a number of modifications to the GST Law, which will take effect on January 1, 2022.

E-commerce Operators Face a New GST Burden

Zomato, Swiggy, Ola, and Uber are some of the most popular food delivery services. The Goods and Services Tax Council concluded on September 17 that e-commerce operators should be held accountable for tax on services provided through them, such as passenger transportation by any form of motor vehicle, restaurant services, or restaurant services provided, with limited exclusions. According to a statement released by the Finance Ministry following the GST Council meeting, this will take effect on January 1, 2022.

Aadhaar authentication is required for GST refund and revocation applications.

The Central Board of Indirect Taxes and Customs (CBIC) has announced that mandatory Aadhaar authentication for GST refund and revocation applications will take effect on January 1, 2022.

In the footwear and textiles sector, the inverted duty structure has been corrected.

In order to remedy the inverted duty structure in the Footwear and Textile Sector, the GST Council decided to implement GST rate changes beginning in January 2022. All footwear, regardless of price, will be subject to a 12 percent GST, while all textile products, including premade clothing, would be subject to a 12 percent GST.

GSTR-1 will be blocked if GSTR 3B is not filed.

If you have not filed a GSTR-1 return in FORM GSTR-3B for the preceding two return periods, the GSTR-1 return filing capability will be disabled on January 1, 2022. If a taxpayer does not file GSTR-3B for October and November 2021, for example, the GSTR-1 filing capability will be unavailable beginning January 1, 2022.

GST Provision for communicating invoice or debit note details to the receiver

Section 109 of the Finance Act of 2021 seeks to amend section 16 of the CGST Act by inserting the clause “(aa) the details of the invoice or debit note referred to in clause (a) has been furnished by the supplier in the statement of outward supplies and such details have been communicated to the recipient of such invoice or debit note in the manner specified under section 37” after clause (a).

The tax payable on information of outward supplies is included in self-assessed tax.

“For the purposes of this paragraph, the word “self-assessed tax” shall include the tax payable in respect of details of outward supplies supplied under section 37, but not included in the return furnished under section 39,” says section 114 of the Finance Act of 2021.

Any property, including bank accounts, may be temporarily attached by the commissioner.

Section 115 of the Finance Act of 2021 seeks to amend section 83, namely “(1) Where, after the initiation of any proceeding under Chapter XII, Chapter XIV, or Chapter XV, the Commissioner is of the opinion that it is necessary to do so for the purpose of protecting the interest of the Government revenue, he may, by order in writing, attach provisionally any property, including bank accounts, belonging to the taxable person.”

Unless an amount equal to 25% of the penalty is paid, no appeal can be brought against a section 129(3) order.

Section 116 of the Finance Act of 2021 proposes to add a proviso to section 107, sub-section (6), stating: “Provided that no appeal shall be brought against an order made under sub-section (3) of section 129, unless the appellant has paid an amount equal to twenty-five percent of the penalty.”

The Commissioner’s authority to issue a request for information

Section 119 of the Finance Act of 2021 proposes to replace section 151 with a new section titled “Power to call for information: The Commissioner or an officer authorized by him may, by order, direct any person to furnish information relating to any matter dealt with in connection with this Act, within such time, in such form, and in such manner as may be specified therein.”

When a proper officer detains or seizes items or a conveyance, he or she must give notification within seven days of the detention or seizure.

The proper official detaining or seizing goods or conveyance shall publish a notice indicating the penalty payable within seven days of such detention or seizure, and then pass an order defining the penalty payable within seven days of the date of delivery of such notice.

Goods and conveyances in transit are detained, seized, and released.

  • The provisions of Sections 129(1)(a), 129(1)(b), and 129(4) have been changed to follow Section 129(1)(a) on payment of a penalty of $200. Where the owner of the goods comes forward for payment of such penalty, of the tax payable on such goods and, in the case of exempted goods, of an amount equal to 2% of the value of the goods or twenty-five thousand rupees, whichever is less;
  • 129(1) (b) on payment of a penalty equal to 50% of the value of the goods or 200 percent of the tax payable on such goods, whichever is higher, and in the case of exempted goods, on payment of a penalty equal to 5% of the value of the goods or twenty-five thousand rupees, whichever is less, where the owner of the goods fails to come forward for payment of such penalty.
  • 129(2) for the detention and seizure of goods and conveyances, the provisions of section 67, subsection (6), apply mutatis mutandis.
  • 129(3) A proper officer detaining or seizing goods or conveyance shall issue a notice specifying the penalty payable within seven days of such detention or seizure, and then pass an order for payment of the penalty under clause (a) or clause (b) of sub-section within seven days of the date of service of such notice (1).
  • 129(4) No punishment under subsection (3) shall be imposed without first giving the person concerned an opportunity to be heard.
  • 129(6) If the person transporting the goods or the owner of the goods fails to pay the penalty under sub-section (1) within fifteen days of receiving a copy of the order passed under sub-section (3), the goods or conveyance so detained or seized may be sold or disposed of in any manner and within any time prescribed to recover the penalty payable under sub-section (3):
  • The conveyance shall be freed upon payment of the penalty under sub-section (3) or one lakh rupees, whichever is less, by the transporter.
  • The duration of fifteen days may be decreased by the proper officer if the detained or confiscated commodities are perishable or hazardous in nature, or are expected to degrade in value with the passage of time.

Only the penalty amount must be paid in order to release the goods after the above-mentioned Amendment, whilst the tax amount will be paid through GSTR-3B. The penalty amount has been increased to 200 percent of the tax payable (from 100 percent previously) [in case owner comes forward for payment of penalty], and if the owner of the goods does not come forward for payment of such penalty, the penalty will be the greater of 50 percent of the goods’ value or 200 percent of the tax payable on such goods.

Sec. 129(6), as amended, now provides that if a penalty is not paid within 15 days of receiving the order, the confiscated goods/conveyance will be sold to recoup the penalty amount. However, a seized conveyance might be released after paying a penalty of Rs. 1 Lac or the lesser of the penalty and the penalty.

Confiscation of commodities or conveyances and imposition of a penalty (Section 118 of the Finance Act of 2021)

Section 130 has been changed such that it no longer overrides any other Act provision. The Amendment separates the confiscation proceedings from the punishment proceedings resulting from the detention of items. The Finance Act of 2021 now prescribes a minimum penalty equal to 100 percent of the tax payable on such commodities. Section 130(3) has been repealed, removing the necessity to pay a fine under section 130(2) in addition to the tax, penalty, and charges due under section 130. (1).

Section 151 – Commissioner’s power to gather statistics and information (Finance Act, 2021 – Section 119)

Previously, the Commissioner could only request statistics/information through the issuance of a notification, which has now been abolished in favor of allowing the jurisdictional commissioner to directly request information from any person relating to any matter dealt with in connection with the Act without the need for a notification.

Section 152 (Finance Act, 2021 – Section 120) prohibits the dissemination of information.

Sec 152(1) has been revised to state that any information gathered through a return or otherwise that must be disclosed for any proceeding under the Act must be done so after providing a personal hearing opportunity. The provision in Section 152(2) relating to access to data gathered in this manner has now been removed.

It was rationalized to exclude any unincorporated body from supplying goods to members.

As a result of the establishment of Section 7(1) (aa), which automatically covers the Provisions u/s 7 of the CGST Act (Supply of Goods), Section 121 Following Provisions u/s 7 of the CGST Act (Supply of Goods) has been repealed.

GST Notifications that will take effect on January 1, 2022

A registered taxpayer would not be able to file his GSTR-1 if his GSTR-3B has not been filed for the previous month (before, he would not be able to file his GSTR-1 if his GSTR-3B had not been filed for the previous two months).

For GST Refund Applications under Rule 89 or Rule 96, and for Filling of Revocation of Cancellation of Registration, every Proprietor / Karta / MD/ WTD / Member of Managing Committee/ AOP/ BOI/ Society or Trustee or Authorized Signatory must undergo Aadhar verification.

Exceptions to the preceding Any person who is not an Indian citizen; or a Central Government or State Government department or establishment; or a local authority; or a statutory body; or a PSU; or a person registered under Section 25 (9) of the CGST Act, 2017.

The methods of compliance for the supply of “Restaurant Service” through E-Commerce Operators have been clarified.

  • In respect of ‘restaurant services’ on which it pays tax under section 9(5), ECOS will no longer be required to collect TCS and file GSTR-8, but will continue to collect TCS.
  • ECOs will be responsible for paying GST on all restaurant services provided through them, including those provided by unregistered individuals, and will be required to pay the entire GST liability in cash (No ITC could be utilized for payment of GST on restaurant service supplied through ECO).
  • The aggregate turnover of a person delivering restaurant services through ECOs shall be estimated in accordance with section 2(6) of the CGST Act, 2017 and shall include the aggregate value of supplies made by the restaurant via ECOs.
  • In accordance with section 9(5) of the Act, ECO is not required to reverse ITC on restaurant services for which it pays GST.
  • For the time being, registered persons delivering restaurant services through ECOs will report such supplies in Table 8 of GSTR-1 and Table 3.1 (c) of GSTR-3B.

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