Important GST updates applicable w.e.f 1st January 2022

Last updated: 05 January 2022

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From 1st January 2022, significant changes to GST regulations came into effect. A key update requires input tax credit (ITC) to be reflected in GSTR-2A/2B for eligibility, strengthening supplier invoice reporting. The definition of 'self-assessed tax' has been clarified to include outward supplies filed in GSTR-1 but not GSTR-3B, enabling direct recovery actions. Penalties for e-way bill violations under Sections 129 and 130 are now distinct from general proceedings, and the pre-deposit for first appeals on these penalties has been set at 25% of the ordered penalty.

1) NO ITC UNLESS REFLECTED IN GSTR2A/2B

Section 16. Eligibility and conditions for taking an input tax credit

Till now there is no condition in the law that stipulates that ITC shall be admissible only if the invoice details have been furnished by the supplier in their GSTR 1. Rule 36(4) provides for the restriction in availment of ITC beyond 5% of the eligible ITC for which the invoice details have been furnished by the supplier in their GSTR 1.
Sec. 16(2) of the CGST Act, 2017 deals with the conditions to be fulfilled to be eligible for ITC. Now an amendment has been made in the law by way of inserting a new clause (aa) to the said Sec. 16(2). The new condition mandates that ITC shall be eligible only if the details of the invoice or debit note have been furnished by the supplier in their GSTR 1 and the same have been communicated to the recipient.

2) SELF ASSESSED TAX

For the purposes of the expression "self-assessed tax" shall include the tax payable in respect of details of outward supplies furnished under section 37(GSTR 1), but not included in the return furnished under section 39(GSTR3B).
self-assessed tax will include only detailed transactions furnished in GSTR-1 and therefore, it is important to file the correct return in GSTR-1.
The aforesaid amendment shall allow the department to directly initiate the recovery action as regards the said self-assessed liability

GST Updates Jan 2022: ITC, Penalties and More

3) Penalty imposed for E-way bill violations u/s 129 and 130

It shall not be deemed to be concluded under the proceedings initiated u/s 73 or 74.

4) Appeals

Filing of the first appeals (Commissioner), presently Sec. 107(6) of the CGST Act, 2017 provides-making a pre-deposit of 10% of the disputed tax amount for filing the appeal and staying the recovery.
Now an amendment has been made in the context of the orders passed levying penalty u/s 129(3) for E-way bill violations to provide that the quantum of the pre-deposit in such cases shall be equal to 25% of the penalty ordered to be paid.

5) Others Applicability w.e.f 01/01/2022

Calling for information - w.e.f section 151 provides a general power to the Commissioner to issue an order and direct any person to furnish information relating to any matter connected with GST within such time, in such form, and in such manner, as may be specified therein.
The Central Board of Indirect Taxes and Customs (CBIC) has notified that Rules related to Mandatory Aadhaar authentication for GST Refund and Revocation application are to be effective from 1 January 2022
Sub-section (5) of section 9(E. Commerce operator) of the Central Goods and Services Tax Act, 2017- In clause (i), for the words "and motor cycle;", the words ", motor cycle, omnibus or any other motor vehicle;" substituted.

After clause (iii), the following clause be inserted, namely: - "(iv) supply of restaurant service other than the services supplied by restaurant, eating joints etc. located at specified premises."