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Goods and Service Tax
Note:
(a) CGST Act, 2017 means Central Goods and Services Tax Act, 2017
(b) IGST Act, 2017 means Integrated Goods and Services Tax Act, 2017
Amendments carried out in the Finance Bill, 2021 will come into effect from the date when the same will be notified, as far as possible, concurrently with the corresponding amendments to the similar Acts passed by the States and Union territories with Legislature.
I. AMENDMENTS IN THE CGST ACT, 2017:
| S. No. | Amendment | Clause of the Finance Bill, 2021 |
| 1. | A new clause (aa) in sub-section (1) of Section 7 of the CGST Act is being inserted, retrospectively with effect from the 1st July, 2017, so as to ensure levy of tax on activities or transactions involving supply of goods or services by any person, other than an individual, to its members or constituents or vice-versa, for cash, deferred payment or other valuable consideration. | [99] |
| 2. | A new clause (aa) to sub-section (2) of the section 16 of the CGST Act is being inserted to provide that input tax credit on invoice or debit note may be availed only when the details of such invoice or debit note have 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. | [100] |
| 3. | Sub-section (5) of section 35 of the CGST Act is being omitted so as to remove the mandatory requirement of getting annual accounts audited and reconciliation statement submitted by specified professional. | [101] |
| 4. | Section 44 of the CGST Act is being substituted so as to remove the mandatory requirement of furnishing a reconciliation statement duly audited by specified professional and to provide for filing of the annual return on self- certification basis. It further provides for the Commissioner to exempt a class of taxpayers from the requirement of filing the annual return. | [102] |
| 5. | Section 50 of the CGST Act is being amended, retrospectively, to substitute the proviso to sub-section (1) so as to charge | [103] |
| interest on net cash liability with effect from the 1st July, 2017. | ||
| 6. | Section 74 of the CGST Act is being amended so as make seizure and confiscation of goods and conveyances in transit a separate proceeding from recovery of tax. | [104] |
| 7. | An explanation to sub-section (12) of section 75 of the CGST Act is being inserted to clarify that “self-assessed tax” shall include the tax payable in respect of outward supplies, the details of which have been furnished under section 37, but not included in the return furnished under section 39. | [105] |
| 8. | Section 83 of the CGST Act is being amended so as to provide that provisional attachment shall remain valid for the entire period starting from the initiation of any proceeding under Chapter XII, Chapter XIV or Chapter XV till the expiry of a period of one year from the date of order made thereunder. | [106] |
| 9. | A proviso to sub-section (6) of section 107 of the CGST Act is being inserted to provide that no appeal shall be filed against an order made under sub-section (3) of section 129, unless a sum equal to twenty-five per cent. of penalty has been paid by the appellant. | [107] |
| 10. | Section 129 of the CGST Act is being amended to delink the proceedings under that section relating to detention, seizure and release of goods and conveyances in transit, from the proceedings under section 130 relating to confiscation of goods or conveyances and levy of penalty. | [108] |
| 11. | Section 130 of the CGST Act is being amended to delink the proceedings under that section relating to confiscation of goods or conveyances and levy of penalty from the proceedings under section 129 relating to detention, seizure and release of goods and conveyances in transit. | [109] |
| 12. | Section 151 of the CGST Act is being substituted to empower the jurisdictional commissioner to call for information from any person relating to any matter dealt with in connection with the Act. | [110] |
| 13. | Section 152 of the CGST Act is being amended so as to provide that no information obtained under sections 150 and 151 shall be used for the purposes of any proceedings under the Act without giving an opportunity of being heard to the person concerned. | [111] |
| 14. | Section 168 of the CGST Act is being amended to enable the jurisdictional commissioner to exercise powers under section | [112] |
| 151 to call for information. | ||
| 15. | Consequent to the amendment in section 7 of the CGST Act paragraph 7 of Schedule II to the CGST Act is being omitted retrospectively, with effect from the 1st July, 2017. | [113] |
AMENDMENTS IN THE IGST ACT, 2017:
| S. No. | Amendment | Clause of the Finance Bill, 2021 |
| 1. | Section 16 of the IGST Act is being amended so as to: (i) zero rate the supply of goods or services to a Special Economic Zone developer or a Special Economic Zone unit only when the said supply is for authorised operations; (ii) restrict the zero-rated supply on payment of integrated tax only to a notified class of taxpayers or notified supplies of goods or services; and (iii) link the foreign exchange remittance in case of export of goods with refund. | [114] |
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FAQ :
Amendments in the Finance Bill, 2021 will come into effect from the date they are notified, ideally coinciding with similar amendments by states and union territories.
Input tax credit can now only be availed if the supplier has furnished the invoice or debit note details and these have been communicated to the recipient.
Yes, the mandatory requirement for auditing annual accounts and submitting a reconciliation statement by a specified professional has been removed.
Interest on net cash liability will be charged retrospectively from July 1, 2017.
Proceedings for detention, seizure, and release of goods and conveyances in transit are now delinked from confiscation and penalty proceedings.
Zero-rating of supplies to SEZ developers or units is now restricted to authorised operations, and foreign exchange remittance is linked to refunds for exported goods.
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