CBIC Issues 3 Important GST Notifications related to Penalty, Late Filing, and CGST Fourteenth Amendment Rules, 2020

1. CBIC appoints 1st January 2021 for provisions of sections 119, 120, 121, 122, 123, 124, 126, 127, and 131 of the CGST Act to come into force

Vide Notification No. 92/2020 - Central Tax, CBIC, in exercise of powers conferred by sub-section (2) of section 1 of the Finance Act, 2020 (12 of 2020), has appointed 1st January 2021 the date where provisions of sections 119, 120, 121, 122, 123, 124, 126, 127 and 131 will be applicable.

What are these sections about?

• Section 119 - Sums due to be paid notwithstanding appeal
• Section 120 - Appeal not to be filed in certain cases
• Section 121 - Non appealable decisions and orders
• Section 122 - Penalty for Certain Offences
• Section 123 - Penalty for failure to furnish information return
• Section 124 - Fine for failure to furnish statistics
• Section 126 - General disciplines related to penalty
• Section 127 - Power to impose a penalty in certain cases
• Section 131 - Confiscation or penalty not to interfere with other punishments

2. CBIC waives fee payable on late filing of GSTR-4 for businesses in Ladakh until 31st December 2020

Vide Notification No. 93/2020 – Central Tax, the Central Board of Indirect Taxes and Customs has waived the fee payable on late filing of GSTR-4 for the registered persons whose principal place of business is in the Union Territory of Ladakh, from 1st November 2020 to 31st December 2020.

In the said notification, after the third proviso, the following proviso shall be inserted, namely:

"Provided also that the late fee payable for delay in furnishing of FORM GSTR-4 for the Financial Year 2019-20 under section 47 of the said Act, from the 1st day of November 2020 till the 31st day of December 2020 shall stand waived for the registered person whose principal place of business is in the Union Territory of Ladakh."

3. CBIC releases the Central Goods and Services Tax (Fourteenth Amendment) Rules, 2020

Vide Notification No. 94/2020 – Central Tax, CBIC has released the Central Good and Services Tax (Fourteenth Amendment) Rules, 2020. To read about the provisions of the new rules in detail, click here. The key changes under these Rules are:

1. Under Rule 36(4), wherein the claim of ITC in respect of invoices not furnished by the corresponding vendors, the limit has been revised to 5% instead of the earlier 10%

2. A New Rule 86B has been inserted, wherein a mandatory payment of 1% from the cash ledger will have to be paid by the taxable supplies other than exempt supply and zero rated supply exceeds, if the taxable supply exceeds Rs. 50 lacs in a month.

3. The time for system-based registration has been enhanced from 3 days to 7 days. In case, the application does not require to do Aadhaar authentication, or where the department feels fit to carry out physical verification, the time limit for grant of registration shall be 30 days instead of 7 days.

4. If the liability declared in GSTR 3B is less than that declared in GSTR 1 in a particular month, the department may now proceed with the cancellation of GSTIN.

5. No opportunity of being heard shall be given to a taxpayer for suspension of GSTIN, where the proper officer (PO) has reasons to believe that the registration of person is liable to be canceled. Furthermore, in case a taxpayer’s GSTIN is suspended, the taxpayer shall not be eligible to avail refund u/s 54 of the CGST Act 2017.

6. If a taxpayer fails to file GSTR 3B for two subsequent months, the said taxpayer’s GSTR 1 shall now be blocked. Moreover, a taxpayer who is restricted to avail ITC as per rule 86B, shall also not be permitted to file GSTR 1.

7. The new rules have also narrowed the validity of the E-Way Bill. Earlier one day was permitted for a distance up to 100 km under the E-Way Bill provision. Now the same has been increased to 200 km. This means that only one day validity shall be granted to cover a distance up to 200 km which was earlier 100 km.

What do you think of these notifications released by CBIC? Do you think this will ease things for the taxpayers or prove to be problematic? Let us know in the comments section below.