Regulatory Updates_The PULSE_October 2022

Updates from the MCA

NOTIFICATION PERTAINING TO APPLICATION FOR FAST-TRACK CORPORATE INSOLVENCY RESOLUTION PROCESS

MCA notified amendment in Section 55(2) of Insolvency and Bankruptcy Code, 2016 on 30th August 2022.

As per the notification, an application for fast track corporate insolvency resolution process may be made in respect of the following corporate debtors, namely:

• a small company as defined under clause (85) of section 2 of the Companies Act, 2013; or
• a Startup (other than the partnership firm); or
• an unlisted company with total assets, as reported in the financial statement of the immediately preceding financial year, not exceeding rupees one crore.

In the amended notification, clause (b) referring to a startup has been substituted. A startup here refers to “An entity incorporated as a private limited or registered as a partnership firm or a Limited liability partnership up to 10 years from the date of Incorporation/ registration and whose turnover for any of the financial year since the date of incorporation/ registration does not exceed one hundred crore rupees, provided it is working towards innovation, development or improvement of products, processes or services or it is a scalable business model with a high potential of employment generation or wealth creation.”

Click here to access the Notification.

AMENDMENT IN THE DEFINITION OF SMALL COMPANY

The Ministry of Corporate Affairs (MCA) notified Companies (Specification of definition details) Amendment Rules, 2022 on 15th September 2022 to amend the definition of Small Company.

The definition of small companies is revised under the Companies Act, 2013 by increasing the following said limits:

• paid-up capital from “not exceeding Rs. 2 crores” to “not exceeding Rs. 4 crores” and
• turnover from “not exceeding Rs. 20 crores” to “not exceeding Rs. 40 crores”.

This significant move is part of the government’s proactive measures to facilitate Ease of Doing Business further and reduce the compliance burden on “small companies”.

Click here to access the Notification

AMENDMENTS IN THE CORPORATE SOCIAL RESPONSIBILITY RULES

The Ministry of Corporate Affairs notified the Companies (Corporate Social Responsibility Policy) Amendment Rules, 2022 on 20th September 2022.

The salient highlights of the amendments are mentioned in the table below:

Revised Format of Annual report on CSR activities:

• The new format of the Annual Report on the CSR Activities has to be annexed along with the Board’s report as available in the link below.
• The previous format was elaborative. The same has been now rationalized by omitting the requirement of mentioning the details of each project (ongoing and others) and has been aligned with the changes introduced in the Amended CSR Rules.

Click here to access the Notification

EXTENSION OF TIMELINE FOR FILING E-FORM DIR-3 KYC AND WEB-FORM DIR-3-KYC-WEB

The Ministry of Corporate Affairs has extended the due date for filing of Form DIR-3 KYC (including DIR 3 KYC Web) in respect of Financial Year 2021-22 from 30^th September 2022 to 15^th October 2022 without payment of a fee.

Click here to access the Notification

THE MINISTRY OF CORPORATE AFFAIRS (MCA) MANDATES COMPANIES TO ROUND OFF FIGURES APPEARING IN FINANCIAL STATEMENTS

The Ministry of Corporate Affairs issued a Clarification on 26th September 2022, mandating Companies to round off Figures appearing in Financial Statements.

• Amendment to Schedule III to the Companies Act, 2013 vide MCA Notification dated 24^th March 2021 mandates companies to round off the figures appearing in the Financial Statements depending upon their total income.

• However, if the Companies provide absolute figures in e-forms ie. AOC-4, the same shall not be treated as incorrect certification by the Professionals.

Updates from the SEBI

MASTER CIRCULAR ON SURVEILLANCE OF SECURITIES MARKET

In order to enable the users to have an access to all the applicable circulars in one place, the SEBI has issued a master circular on Surveillance of the Securities Market vide dated 13^th September 2022.

In its circular it,

1. Adopted measures to modulate sharp and destabilizing price movements in the shares of companies, to encourage better price discovery and to increase transparency in the securities market.
2. Provides directions to SEBI Registered Market Intermediaries to maintain internal code of conduct and exercise controls in respect of unauthenticated news.
3. Modifies the disclosures requirements, reporting of violations etc. under the SEBI (Prohibition of Insider Trading) Regulations 2015 and the formats are annexed to the master circular.

This clearly establishes a code of conduct which safeguards the rights and reduces the malpractices in the economy which leads to a healthy relationship and smooth capital flow in the market. The detailed master circular can be accessed by clicking the link mentioned below:

Click here to access the Master Circular

Updates from the RBI

RBI BRINGS UNIFORMITY IN LATE SUBMISSION FEES FOR DELAYED REPORTING UNDER FEMA

The Reserve Bank of India (RBI) on September 30, 2022, announced that it has now been decided to bring uniformity in the imposition of LSF for reporting delays in Foreign Investment (FI), External Commercial Borrowings (ECBs) and Overseas Investment related transactions. The following matrix shall be used henceforth for the calculation of LSF, wherever applicable:

• The LSF amount is to be calculated per Return. However, for any number of Form ECB-2 returns, delayed submission for each LRN will be treated as one return
• The Maximum LSF amount for each return will be limited to 100 per cent of the amount involved and will be rounded upwards to the nearest hundred

Click here to access the Circular

GUIDELINES ON DIGITAL LENDING

The RBI on September 2, 2022, issued guidelines on digital lending with the aim to protect borrowers from unethical lending practices in the digital platform.

Some key highlights of the new guidelines are as under:

• The Regulated Entities (REs) shall ensure that all loan servicing, repayment, loan disbursals etc., are executed between the bank account of the borrowers and the Regulated Entity directly, without any pass-through account/ pool account of the Lending Service Provider (LSP) or any third party.
• Any fees, charges etc. payable to lending service providers must be paid by the regulated entities and borrowers must not be charged for this.
• The Regulated Entities shall ensure that any lending made through their Digital Lending Apps and/or Digital Lending Apps of Lending Service Providers is reported to the Credit Information Companies (CICs) irrespective of its nature/ tenor. The Lending done through Buy Now and Pay Later are also to be reported to the Credit Information Companies.

Click here to access the Circular

“ALERT LIST” OF ENTITIES NOT AUTHORISED TO DEAL IN FOREX AND TO OPERATE ELECTRONIC TRADING PLATFORMS FOR FOREX TRANSACTIONS

The RBI, in its press release dated September 7, 2022, has released an “Alert List” of entities which are neither authorised to deal in forex under the Foreign Exchange Management Act, 1999 (FEMA) nor authorised to operate electronic trading platforms for forex transactions and had cautioned the public, not to undertake forex transactions on unauthorised Electronic Trading Platforms (ETPs) or remit/deposit money for unauthorised forex transactions.

It is to be noted that an entity not appearing in the Alert List should not be assumed to be authorised by the RBI. The authorisation status of any person / ETP can be ascertained from the list of authorised persons and authorised ETPs, which are already made available on the RBI website.

Click here to access the Press release

Click here to access the Alert List

BHARAT BILL PAYMENT SYSTEM (BBPS) TO PROCESS CROSS-BORDER INBOUND BILL PAYMENTS

The Reserve Bank of India (RBI) issued a notification on September 15, 2022, allowing foreign inward remittances received under the Rupee Drawing Arrangement (RDA), to be transferred to the KYC-compliant bank account of the biller (beneficiary) through the Bharat Bill Payment System (BBPS), subject to certain conditions.

Click here to access the Circular

INTRODUCTION OF MULTI-LINGUAL AUDIO NOTIFICATION- MOBILE-AIDED NOTE IDENTIFIER (MANI APP)

RBI in its press release made on September 21, 2022, introduced a new feature in the MANI App which was launched on January 01, 2020, for aiding visually impaired persons to identify the denomination of Indian Banknotes.

This App, which identifies the denomination of banknotes through an audio notification in Hindi and English, is now capable of notifying the banknote denomination in 11 other languages (Assamese, Bengali, Gujarati, Kannada, Malayalam, Marathi, Odia, Punjabi, Tamil, Telugu, Urdu).

The MANI application is free and can be downloaded from the Android Play Store and iOS App Store without any charges/payment. Existing users may update their apps to integrate the new features.

Click here to access the Press release

RBI NOTIFIED CHANGE IN BANK RATE & REPO RATE

The Reserve Bank of India (RBI) on September 30 2022 announced the following changes in the key rates:

Click here to access the Circular on the change in the rate of LAF

Click here to access the Circular on change in SLF

Click here to access the Circular on the change in Bank rate

Income Tax Updates

CBDT RELAXES QUOTING OF PAN-AADHAAR NO. IN CERTAIN TRANSACTIONS

Central Board of Direct Taxes (CBDT) relaxes quoting of PAN – Aadhaar No. in certain transactions vide Notification No. 105/2022 – Income Tax dated 1st September 2022.

In exercise of the powers conferred by section 139A read with section 295 of the Income-tax Act, 1961, the CBDT hereby amends rule 114BB (1) of the Income-tax Rules, 1962 by adding a proviso to that rule.

Rule 114BB (1) – Every person shall, at the time of entering into a transaction specified in column (2) of the Table below, quote his permanent account number or Aadhaar number, as the case may be, in documents pertaining to such transaction, and every person specified in column (3) of the said Table, who receives the such document, shall ensure that the said number has been duly quoted and authenticated-

Provided that the provisions of this sub-rule shall not apply in a case where the person, depositing the money as per Sl. No. 1 of column (2) or withdrawing money as per Sl. No. 2 of column (2) or opening a current account or cash credit account as per Sl. No. 3 of column (2) of the Table above, is the Central Government, the State Government or the Consular Office.

This notification shall be effective from 9^th July 2022.

Click here to access the circular

CBDT NOTIFIES CERSAI UNDER SECTION 10(46) OF THE INCOME-TAX ACT, 1961

CBDT notifies ‘Central Registry of Securitisation Asset Reconstruction and Security Interest of India (CERSAI)’ under Section 10(46) of the Income Tax Act, 1961 vide Notification No. 107/2022 – Income Tax dated 5th September 2022.

Section 10 – provides the list of income not forming part of the Total Income.

Section 10(46) – “any specified income arising to a body or authority or Board or Trust or Commission (by whatever name called), or a class thereof which—

1. has been established or constituted by or under a Central, State or Provincial Act, or constituted by the Central Government or a State Government, with the object of regulating or administering any activity for the benefit of the general public;
2. is not engaged in any commercial activity; and
3. is notified by the Central Government in the Official Gazette for the purposes of this clause.”

1.In exercise of the powers conferred under section 10(46) of the Act, the Central Government hereby notifies for the purposes of the said clause, ‘Central Registry of Securitisation Asset Reconstruction and Security Interest of India’, a body set up under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002 in respect of the following specified income arising to that body, namely:-

1. fee income from Security Interest transactions;
2. fee income from transactions on Central KYC (CKYC) Records Registry;
3. RTI application fee; and
4. interest income earned on fixed deposits and on (a) to (c) above.

2.However, this notification shall be effective subject to the conditions that CERSAI, –

1. shall not engage in any commercial activity;
2. activities and the nature of the specified income shall remain unchanged throughout the financial years; and
3. shall file a return of income in accordance with the provision of section 139(4C)(g) of the Income-tax Act, 1961

3.This notification shall be deemed to have been applied for the financial years 2018-2019, 2019-2020, 2020-2021 and 2021-2022 and shall be applicable with respect to the financial year 2022-2023.

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ADDITIONAL GUIDELINES FOR REMOVAL OF DIFFICULTIES UNDER SECTION 194R(2) OF THE INCOME-TAX ACT, 1961

1. The Finance Act 2022 inserted a new section 194R in the Income-tax Act, 1961 with effect from 1^st July 2022.
2. The new section mandates a person, who is responsible for providing any benefit or perquisite to a resident, to deduct tax at source @ 10% of the value or aggregate of the value of such benefit or perquisite, before providing such benefit or perquisite. The benefit or perquisite may or may not be convertible into money but should arise either from carrying out of business or from exercising a profession, by such resident.
3. This deduction is not required to be made if the value or aggregate value of the benefit or perquisite provided or likely to be provided to the resident during the financial year does not exceed twenty thousand rupees.
4. The responsibility of tax deduction applies to a person, being an individual/Hindu Undivided Family (HUF) deductor, whose total sales / gross receipts / gross turnover from business exceeds one crore rupees, or from profession exceeds fifty lakh rupees, during the financial year immediately preceding the financial year in which such benefit or perquisite is provided by him.
5. Accordingly, in the exercise of the power conferred by section 194R(2) of the Act, CBDT had issued guidelines vide Circular no 12 of 2022 dated 16^th June 2022. Subsequently, some more clarifications are requested by stakeholders on various issues.
6. Accordingly, this Circular is also issued under section 194R(2) to provide clarification only for removing implementation of provisions of section 194R of the Act and it does not impact the taxability of income in the hands of the recipient which shall be governed by the relevant provisions of the Act.
7. Please refer to the below circular providing clarification to the respective issues raised w.r.t. section 194R.

Click here to access the circular

CBDT NOTIFIES FORM ITR-A & RULES FOR MODIFIED RETURN BY SUCCESSOR ENTITY

The Finance Act, 2022 had inserted a new section 170A w.e.f. 1^st April 2022 to enable entities going through business reorganization to file modified returns for the period between the date of effectivity of the order and the date of issuance of the final order of the competent authority. The modified return shall be furnished in the prescribed form and manner within 6 months from the end of the month in which the said order was issued.

To implement the changes, the Central Board of Direct Taxes has notified new Rule 12AD prescribing norms for filing of returns under section 170A. Rule 12AD provides that the modified return of income shall be furnished electronically, by a successor entity to a business reorganisation, in Form ITR-A vide Notification No. 110/2022-Income Tax dated 19^th September, 2022.

The Assessing Officer shall pass an order modifying the total income or proceed to complete the assessment or reassessment proceedings in accordance with the order of the business reorganization and the modified return so furnished.

In the principal rules, in Appendix-II,––

1.in Form ITR-6, for every assessment year commencing on the 1st day of April, 2022 or any earlier assessment year, in the Part A-GEN, for entries of serial number (A19)(a)(i), the following shall be substituted, namely:—

2. after the ITR – Ack, the Form ITR-A (ITR under section 170A) shall be inserted – Please refer to the notification for the entire Form ITR-A.

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RULE 132 – APPLICATION FOR RECOMPUTATION OF INCOME UNDER SECTION 155(18)

The Central Board of Direct Taxes (CBDT) notifies new Income Tax Application Form No. 69 – Application for recomputation of income under sub-section (18) of section 155 and Form No. 70 – Intimation to the Assessing Officer of the payment of tax on income recomputed under sub-section (18) of section 155 vide Notification No. 111/2022 – Income Tax dated 28th September 2022.

The Finance Act, 2022 inserted an Explanation 3 with retrospective effect from the Assessment Year (A.Y.) 2005-06 providing that for Section 40(a)(ii), the term ‘tax’ shall include and be deemed to have always included ‘surcharge’ or ‘cess’. Accordingly, even for the past period, the deduction for ‘cess’ or ‘surcharge’ shall not be available.

Section 155 contains provisions for the amendments in the assessment order. The provision provides that the assessment of a person shall be modified if, due to change in certain circumstances, his income is required to be re-computed.

Consequent to the amendment made in Section 40(a)(ii), the Finance Act 2022 also inserted a new sub-section (18) to section 155 empowering the Assessing Officer to re-compute the total income for such previous year in which the assessee claimed deduction of surcharge or cess.

The income so computed shall be treated as under-reported income, and the assessee shall be liable to pay tax on it along with a penalty of 50% of the amount of tax payable on under-reported income.

However, if the assessee makes an application to AO, requesting him for recomputation of total income without allowing the claim for deduction of surcharge or cess and pays the tax amount, such claim shall not be deemed to be under-reported income.

To implement this, the Central Board of Direct Taxes (CBDT) has inserted a new Rule 132 to the Income-tax Rules, 1962 prescribing the manner for making applications before AO. Said rule provides as follows:

(a) The assessee shall make an application, in Form No. 69, requesting AO for recomputation of total income of the previous year without allowing the claim for deduction of surcharge or cess.

(b) The application shall be furnished electronically on or before 31-03-2023 to PDGIT (Systems) or other prescribed tax authorities.

(c) PDGIT (Systems) or the DGIT (Systems) shall lay down the procedures and standards for furnishing and verification of Form No. 69 and forward the application to AO.

(d) On receipt of the application, the AO shall recompute the total income by amending the relevant order. He shall issue a notice under section 156 specifying the time within which amount of tax payable (if any) is to be paid:

• For AY in which assessee had claimed the deduction; and
• For the AYs subsequent to AY referred in (i), if the order of such AY results in variation in carry forward of loss or allowance for unabsorbed depreciation or credit for tax under sections 115JAA or 115JD.

(e) The assessee shall furnish the details of payment of tax in Form No. 70 to AO within 30 days from the date of making the payment.

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CBDT EXTENDS DUE DATE FOR FILING VARIOUS INCOME TAX AUDIT REPORTS FOR THE ASSESSMENT YEAR 2022-23

The Central Board of Direct Taxes extends the due date for filing of various reports of audit for Assessment Year 2022-23 from 30^th September, 2022 to 7^th October, 2022 for certain categories of assessees. 

On consideration of difficulties faced by the taxpayers and other stakeholders in electronic filing of various reports of audit under the provisions of the Income-tax Act, 1961, the CBDT, in exercise of its powers under Section 119 of the Act, extends the due date of furnishing of report of audit under any provision of the Act for the Previous Year 2021­-22, which was 30^th September 2022 in the case of assessees referred in clause (a) of Explanation 2 to section 139(1) of the Act, to 7^th October, 2022.

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GST Updates

CHANGES IN TABLE 4 OF GSTR 3B – REPORTING OF ITC AVAILMENT, REVERSAL & INELIGIBLE ITC

The Government vide Notification No. 14/2022 – Central Tax dated 5th July, 2022 has notified few changes in Table 4 of Form GSTR-3B for enabling taxpayers to correctly report information regarding ITC availed, ITC reversal and ineligible ITC in Table 4 of GSTR-3B.

The Notified changes of Table 4 of GSTR-3B have been incorporated in GSTR-3B and are available on GST Portal since 1^st September, 2022. The taxpayers are advised to report their ITC availment, reversal of ITC and ineligible ITC correctly as per following format of Table 4 of GSTR-3B at GST Portal for the GSTR-3B to be filed for the period August 2022 onwards.

These changes in reporting in Table 4 are not applicable for period prior to August-2022. Changes introduced in the format of Table 4 of GSTR-3B at the GST Portal are depicted in Red font in the table below:

Table 4 – Eligible ITC

From the format of Table 4, following is noteworthy:

1. All non-reclaimable reversal of ITC needs to be reported in table 4(B)(1)
2. All reclaimable ITC reversals may be reported in table 4(B)(2). It should be noted that ITC reversed under 4(B)(2) can be reclaimed in table 4(A)(5) at appropriate time and the break-up detail of such reclaimed ITC should be provided in 4(D)(1) in the same return.
3. The ITC not-available mentioned in GSTR-2B of the taxpayer has to be reported in 4(D)(2) of table
4. Any ITC availed inadvertently in Table 4(A) in previous tax periods due to clerical mistakes or some other inadvertent mistake maybe reversed in Table 4(B)2.

Corresponding changes in GSTR-2B and auto-population of GSTR-3B at present are under development and the taxpayer should reflect the changes required in GSTR-3B return by way of editing the pre-filled entries so as to correctly self-assess the GSTR-3B return. These changes would be available on GST Portal in due course of time.

Taxpayers may also refer to CBIC Circular No. 170/02/2022-GST dated 6th July, 2022 for detailed clarification on reporting of ITC availment, ITC reversal and Ineligible ITC in GSTR-3B.

Click here to access the circular

IMPORT OF SERVICES WITHOUT DISCHARGING GST UNDER RCM DETECTED

The Tamil Nadu GST Department vide Circular No. 11/2022-TNGST dated September 02, 2022 has issued procedure for re-credit of the amount in electronic credit ledger using FORM GST PMT-03A with the Reference to Circular No. 174/06/2022-GST, dated July 06, 2022 issued by Ministry of Finance, Department of Revenue, Government of India, CBIC, New Delhi.

In the reference cited, the CBIC, Department of Revenue, Ministry of Finance, Government of India, New Delhi, has issued Circular No. 174/06/2022-GST, dated July 06, 2022 on the recommendations of the GST Council. Hence, following parimateria circular is issued:

Difficulties were being faced by the taxpayers in taking re-credit of the amount in the electronic credit ledger in cases where any excess or erroneous refund sanctioned to them had been paid back by them either on their own or on being pointed by the tax officer. In order to resolve this issue, GSTN has recently developed a new functionality of FORM GST PMT-03A which allows proper officer to re-credit the amount in the electronic credit ledger of the taxpayer. Further, sub-rule (4B) in rule 86 of the Tamil Nadu Goods and Services Tax Rules, 2017 (hereinafter referred to as “TNGST Rules”) has been inserted vide Notification No SRO A-12 (a)/2022 issued in G.O (Ms) No.106, Commercial Tax & Registration Department, dated July 08, 2022 to provide for re-credit in the electronic credit ledger where the taxpayer deposits the erroneous refund sanctioned to him.

In order to ensure uniformity in the implementation of the above provisions of the law across field formations, the Commissioner, in exercise of powers conferred by section 168 of the Tamil Nadu Goods and Services Tax Act, 2017, hereby clarifies the following:

Categories of refunds where re-credit can be done using FORM GST PMT-03 A:

Reference is invited to sub-rule (4B) of rule 86 of the TNGST Rules, which is reproduced as under:

Rule 86(4B) –where a registered person deposits the amount of erroneous refund sanctioned to him-

1. under sub-section (3) of section 54 of the Act, or
2. under sub-rule (3) of rule 96, in contravention of sub-rule (10) of rule 96, along with interest and penalty, wherever applicable, through FORM GST DRC-03, in cash, on his own or on being pointed out, an amount equivalent to the amount of erroneous refund deposited by the registered person shall be re-credited to the electronic credit ledger by the proper officer by an order made in FORM GST PMT-03A.

From the above, it can be stated that in respect of the following categories of refund sanctioned erroneously, re-credit of amount in the electronic credit ledger can be done through FORM GST PMT-03A, on deposit of such erroneous refund along with interest and penalty, wherever applicable, by the taxpayer:

a. Refund of IGST obtained in contravention of sub-rule (10) of rule 96.

b. Refund of unutilised ITC on account of export of goods/services without payment of tax.

c. Refund of unutilised ITC on account of zero-rated supply of goods/services to SEZ developer/Unit without payment of tax.

d. Refund of unutilised ITC due to inverted tax structure.

Procedure for re-credit of amount in electronic credit ledger:

The taxpayer shall deposit the amount of erroneous refund along with applicable interest and penalty, wherever applicable, through FORM GST DRC-03 by debit of amount from electronic cash ledger. While making the payment through FORM GST DRC-03, the taxpayer shall clearly mention the reason for making payment in the text box as the deposit of erroneous refund of unutilised ITC, or the deposit of erroneous refund of IGST obtained in contravention of sub-rule (10) of rule 96 of the TNGST Rules.

Till the time an automated functionality for handling such cases is developed on the portal, the taxpayer shall make a written request, in format enclosed as Annexure-A, to jurisdictional proper officer to re-credit the amount equivalent to the amount of refund thus paid back through FORM GST DRC-03, to electronic credit ledger.

The proper officer, on being satisfied that the full amount of erroneous refund along with applicable interest, as per the provisions of section 50 of the TNGST Act, and penalty, wherever applicable, has been paid by the said registered person in FORM GST DRC-03 by way of debit in electronic cash ledger, he shall re-credit an amount in electronic credit ledger, equivalent to the amount of erroneous refund so deposited by the registered person, by passing an order in FORM GST PMT-03A, preferably within a period of 30 days from the date of receipt of request for re-credit of erroneous refund amount so deposited or from the date of payment of full amount of erroneous refund along with applicable interest, and penalty, wherever applicable, whichever is later.

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GUIDELINES FOR FILING/REVISING TRAN-1/TRAN-2 AS PER SUPREME COURT ORDER

As per the directions of Hon‘ble Supreme Court, the facility for filing TRAN-1/ TRAN-2 or revising the earlier filed TRAN-1/TRAN-2 on the common portal by an aggrieved registered assessee will be made available by GSTN during the period from 01.10.2022 to 30.11.2022. In order to ensure uniformity in implementation of the directions of Hon‘ble Supreme Court, the CBIC has issued guidelines for the applicants for filing TRAN-1/TRAN-2 or revising earlier filed TRAN-1/TRAN-2.

The applicant shall at the time of filing or revising the declaration in FORM GST TRAN-1/TRAN-2, also upload pdf copy of a declaration on the common portal which is provided in the Annexure-A to Circular 180/12/2022-GST dated 9th September, 2022. The applicant is also required to submit a self-certified copy to the jurisdictional tax officer within 7 days of filing of declaration in FORM TRAN-1/TRAN-2 on the common portal.

The Operative portion of the order reads as follow:

1. Goods and Service Tax Network (GSTN) is directed to open common portal for filing concerned forms for availing Transitional Credit through TRAN-1 and TRAN-2 for two months i.e. w.e.f. 01.09.2022 to 31.10.2022.
2. Considering the judgments of the High Courts on the then prevailing peculiar circumstances, any aggrieved registered assessee is directed to file the relevant form or revise the already filed form irrespective of whether the taxpayer has filed writ petition

In regard to this, “The time for opening the GST Common Portal is extended for a further period of four weeks from today.”

For the detailed guidelines to be followed by the applicant for filing TRAN-1/TRAN-2 or revising earlier filed TRAN-1/TRAN-2 please refer to the circular given below.

Click here to access the circular

CBIC NOTIFIES 14 SECTIONS OF FINANCE ACT, 2022 W.E.F. 1^ST OCTOBER, 2022

The Central Board of Indirect Taxes & Customs (CBIC) has notified the provisions of Finance Act, 2022 related to GST which shall be effective from 1st October, 2022.

The key changes include –

• extension in time limit of availment of ITC till 30th November of next financial year;
• credit notes can be issued till 30th November of next financial year;
• Form GSTR-2 has been done away with;
• extension in time-limit to rectify errors or omission in Form GSTR -1 or GSTR-3B;
• omission of sections 42, 43 and 43A etc.

Click here to access the circular

CENTRAL GOODS AND SERVICES TAX (SECOND AMENDMENT) RULES, 2022

The CBIC has issued Central Goods and Services Tax (Second Amendment) Rules, 2022 to give effect to the changes introduced by the Finance Act, 2022 which have been notified through Notification No. 19/2022–Central Tax dated September 28th, 2022. These changes shall be effective from 1st October, 2022.

In rule 21, after clause (g), the following clauses shall be inserted, namely:

“(h) being a registered person required to file return under section 39(1) for each month or part thereof, has not furnished returns for a continuous period of six months;

(i) being a registered person required to file return under proviso of section 39(1) for each quarter or part thereof, has not furnished returns for a continuous period of two tax periods.”;

In rule 36 of the said rules,–

• in sub-rule (2), the words, letters and figure,”, and the relevant information, as contained in the said document, is furnished in FORM GSTR-2 by such person shall be omitted;
• in sub-rule (4)(b), after the words, “the details of”, the words, “input tax credit in respect of” shall be inserted;

In rule 37 of the said rules,–

• for sub-rules (1) and (2), the following sub-rules shall be substituted, namely:- “(1) A registered person, who has availed of input tax credit on any inward supply of goods or services or both, other than the supplies on which tax is payable on reverse charge basis, but fails to pay to the supplier thereof, the amount towards the value of such supply along with the tax payable thereon, within the time limit specified in the second proviso to section 16(2), shall pay an amount equal to the input tax credit availed in respect of such supply along with interest payable thereon under section 50, while furnishing the return in FORM GSTR-3B for the tax period immediately following the period of 180 days from the date of the issue of the invoice.

Provided that the value of supplies made without consideration as specified in Schedule I of the said Act shall be deemed to have been paid for the purposes of the second proviso to sub-section (2) of section 16.

Provided further that the value of supplies on account of any amount added in accordance with the provisions of clause (b) of sub-section (2) of section 15 shall be deemed to have been paid for the purposes of the second proviso to sub-section (2) of section 16.;

• Where the said registered person subsequently makes the payment of the amount towards the value of such supply along with tax payable thereon to the supplier thereof, he shall be entitled to re-avail the input tax credit referred to in sub-rule (1).;
• sub-rule (3) shall be omitted;

In rule 38 of the said rules,–

• in clause (a), in sub-clause (ii), the word, letters and figure, “in FORM GSTR-2” shall be omitted;
• in clause (c), for the words, letters and figure, ‘and shall be furnished in FORM GSTR-2, the words’, letters and figure, “and the balance amount of input tax credit shall be reversed in FORM GSTR-3B” shall be substituted;
• clause (d) shall be omitted;

In rule 42 in sub-rule (1), in clause (g), the words, letters and figure, ‘at the invoice level in FORM GSTR-2 and’ shall be omitted;

In rule 43 of the said rules, in sub-rule (1), the words, letters and figure, “FORM GSTR-2 and” at both the places where they occur, shall be omitted;

In rule 60 of the said rules, in sub-rule (7), for the words ―auto-drafted’, the words ―auto-generated shall be substituted;

Rules 69, 70, 71, 72, 73, 74, 75, 76, 77 and 79 of the said rules shall be omitted;

In rule 83 of the said rules, in sub-rule (8), in clause (a), the words ―and inward shall be omitted;

In rule 85 of the said rules, in sub-rule (2), –

• in clause (b), for the words “said person;”, the words “said person; or” shall be substituted;
• clause (c) shall be omitted;

In rule 89, of the said rules, in sub-rule (1), –

• after the words “claiming refund of”, the words, brackets and figures ―any balance in the electronic cash ledger in accordance with the provisions of sub-section (6) of section 49 or shall be inserted;
• the first proviso shall be omitted;
• in the second proviso, for the words “Provided further that”, the words “Provided that shall be substituted;
• in the third proviso, for the words “Provided also that, the words “Provided further that shall be substituted;

In rule 96 of the said rules, in sub-rule (3), for the words, letters and figures, “FORM GSTR-3 or FORM GSTR- 3B, as the case may be”, the letters and figure, “FORM GSTR-3B” shall be substituted;

FORM GSTR-1A, FORM GSTR-2 and FORM GSTR-3 of the said rules shall be omitted;

In FORM GST PCT-05 of the said rules, in Part-A, in the table, against No.1, under the heading “List of Activities”, the words, “and inward”, shall be omitted.

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