CBIC notified the provisions of Finance (No. 2) Act, 2019 to amend CGST Act, 2017 - Part 3

Kusum Gandhi | Last updated: 16 March 2021

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This article details specific amendments to the CGST Act, 2017, introduced by the Finance (No. 2) Act, 2019, effective from 1 January 2020. It focuses on Sections 101, 102, and 112, which cover extensions for furnishing statements and annual returns, the transfer of funds between electronic cash ledgers, and penalties for profiteering due to unpassed tax rate reductions.

CBIC issued the Notification No. 01/2020- Central Tax on dt. 01 Jan 2020 regarding the implementation of provisions of Finance (No.2) Act, 2019 to amend the CGST Act, 2017.

Finance Act 2019 Amendments to CGST Act: Part 3

As per Notification provisions of sections 92 to 112, except section 92, section 97, section 100 and sections 103 to 110 of the Finance (No. 2) Act, 2019 (23 of 2019) will come into force from 01 Jan 2020.

Click here to read the 1st part of the article
Click here to read the 2nd part of the article

In this article we will discuss only Section- 101, 102 & 112 of Finance (No.2) Act, 2019. Earlier we have discussed Section-93, 94, 95, 96, 98 & 99 of Finance (No. 2) Act, 2019.

Section-101 of Finance (No. 2) Act, 2019 -

In Section 52 of CGST Act,-

in sub-section (4), the following provisos shall be inserted -

'Provided that the Commissioner may, for reasons to be recorded in writing, by notification, extend the time limit for furnishing the statement for such class of registered persons as may be specified therein:

Provided further that any extension of time limit notified by the Commissioner of State tax or the Commissioner of Union territory tax shall be deemed to be notified by the Commissioner.';

in sub-section (5), the following provisos shall be inserted, -
'Provided that the Commissioner may, on the recommendations of the Council and for reasons to be recorded in writing, by notification, extend the time limit for furnishing the annual statement for such class of registered persons as may be specified therein:

Provided further that any extension of time limit notified by the Commissioner of State tax or the Commissioner of Union territory tax shall be deemed to be notified by the Commissioner.'.

Section-102 of Finance (No. 2) Act, 2019 -

After section 53 of CGST Act, the following section 53A shall be inserted -

'53A. Where any amount has been transferred from the electronic cash ledger under this Act to the electronic cash ledger under the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act, the Government shall transfer to the State tax account or the Union territory tax account, an amount equal to the amount transferred from the electronic cash ledger, in such manner and within such time as may be prescribed.'.

Section-112 of Finance (No. 2) Act, 2019 -

In section 171 of CGST Act, after sub-section (3), following sub-section (3A) shall be inserted -

'(3A) Where the Authority referred to in sub-section (2), after holding the examination as required under the said sub-section comes to the conclusion that any registered person has profiteered under sub-section (1), such person shall be liable to pay penalty equivalent to ten percent. of the amount so profiteered:

Provided that no penalty shall be leviable if the profiteered amount is deposited within thirty days of the date of passing of the order by the Authority.

Explanation.- For the purposes of this section, the expression 'profiteered' shall mean the amount determined on account of not passing the benefit of reduction in rate of tax on supply of goods or services or both or the benefit of input tax credit to the recipient by way of commensurate reduction in the price of the goods or services or both.'.

Disclaimer: The contents of this article are solely for informational purpose. It does not constitute professional advice or a formal recommendation. No part of this article should be distributed or copied without express written permission of the author.

FAQ :

The provisions of the Finance (No. 2) Act, 2019, to amend the CGST Act, 2017, came into force from 1 January 2020, as notified by CBIC.

This article specifically discusses Section 101, Section 102, and Section 112 of the Finance (No. 2) Act, 2019.

Section 101 amends Section 52 of the CGST Act, allowing the Commissioner to extend the time limit for furnishing statements and annual returns for certain registered persons.

Section 102 inserts a new Section 53A into the CGST Act, which outlines the process for transferring amounts from the electronic cash ledger under the CGST Act to the SGST or UTGST Acts.

Section 112 inserts sub-section (3A) into Section 171 of the CGST Act, stating that a registered person found to have profiteered may be liable to pay a penalty equivalent to ten percent of the profiteered amount, provided it's deposited within thirty days of the order.