Quick Summary
The GST Council recommended inter alia i. To amend section 38 of CGST Act, 2017, and rule 60 of CGST Rules, 2017, to provide a legal framework in respect of the generation of FORM GSTR-2B based on the action taken by the taxpayers on the Invoice Management System (IMS). ii. To amend section 34(2)
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These amendments aim to establish a legal framework for generating FORM GSTR-2B based on the actions taxpayers take within the Invoice Management System (IMS).
FORM GSTR-3B for a tax period will only be allowed to be filed after FORM GSTR-2B for that same period has been made available on the GST portal.
Section 34(2) of the CGST Act will be amended to specifically require the reversal of input tax credit attributable to a credit note by the recipient, enabling the supplier to reduce their output tax liability. A new rule will also prescribe how a supplier's output tax liability is adjusted against a credit note.
If a recipient rejects a credit note, it appears the supplier may have to pay tax on their output tax liability, and interest could also apply.
Sponsorship services provided by entities registered as 'body corporates' will now be subject to the Forward Charge Mechanism instead of the Reverse Charge Mechanism.
Non-profit organisations (NPOs) that are registered as trusts or co-operative societies, and not as a Section 25 company, will likely remain under the Reverse Charge Mechanism for sponsorship services.
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