Important Updates and Due Date Compliances under GST for December 2021

Please find below the important clarifications/ amendments issued by the Government on GST in November 2021 along with compliance timelines in December 2021:

Compliance timelines

Updates in the month of November 2021

1. Guidelines for disallowing debit of ECrL u/r 86A of CGST Rules, 2017

Rule 86A of the CGST Rules, 2017 provides that in certain circumstances, Commissioner or an officer authorised by him, on the basis of reasonable belief that credit of input tax available in the electronic credit ledger has been fraudulently availed or is ineligible, may not allow debit of an amount equivalent to such credit in electronic credit ledger. CBIC has issued detailed guidelines w.r.t. exercise of power u/r 86A of the Rules. In these guidelines, the CBIC has clarified grounds for disallowing debit of an amount from electronic credit ledger, proper authority for the purpose of Rule 86A, procedure for disallowing debit of electronic credit ledger or blocking credit under Rule 86A etc.
(CBEC-20/16/05/2021-GST/1552 dated November 2^nd, 2021)

2. Circular on clarification on certain refund related issues

Government of India has issued a Circular on clarification on certain refund related issues. These relate to clarification on (i) provisions of sub- section (1) of section 54 of the CGST Act regarding time period, within which an application for refund can be filed; (ii) certification/ declaration under Rule 89(2)(l) or 89(2)(m) of CGST Rules, 2017; (iii) refund of TDS/TCS; and (iv) relevant date for the refund of tax paid on supplies regarded as deemed export.

(Circular No. 166/22/2021-GST dt. 17th Nov, 2021)

3. Circular on clarification in respect of applicability of Dynamic Quick Response (QR) Code on B2C invoices

Government of India has issued a Circular on clarification in respect of applicability of Dynamic Quick Response (QR) Code on B2C invoices and compliance of notification 14/2020- Central Tax dated 21st March, 2020. It has clarified that in cases where the recipient is located outside India, for supply of services, for which the place of supply is in India, as per the provisions of IGST Act 2017, and the payment is received by the supplier, in convertible foreign exchange or in Indian Rupees wherever permitted by the RBI, such invoice may be issued without having a Dynamic QR Code, as such dynamic QR code cannot be used by the recipient located outside India for making payment to the supplier. The Circular No. 156/12/2021-GST, dated 21.06.2021 stands modified to this extent.

Circular No. 165/21/2021-GST dt. 17th Nov, 2021)

4. Circular on clarification for reliance on soft copies of documents in case of checking by GoTN

Government of Tamil Nadu has issued a Circular to its Roving Squad Officers that they shall not insist on physical copy of E-way bill and Invoice or bill of supply or delivery challan, if the person in-charge of a conveyance prefers to show them electronically.

(Circular no. Q1/17253/2019 dt. 15/11/2021, File No.GST-15/30/2021-P AND P-CTD)

5. CBIC notifies rate changes for apparel, footwear and textiles from Jan 1, 2022

CBIC has notified an increase in GST rate of various kinds of textiles, apparel and footwear to 12% from 5% earlier, which will be effective from January 1, 2022. However, GST rates for certain synthetic fibres and yarn have been lowered from 18% to 12%, according to the notification, bringing in uniformity of rates for the entire textiles sector as well as removing distortions due to the inverted duty structure. The GST Council in its meeting in September had decided to correct inverted duty structure on footwear and textiles, which it said will come into effect from January 1, 2022. CBIC has also notified the inclusion of restaurant services under scope of supply made through E-commerce Operators vide these Notifications.

(Notification No. 14/2021-Central Tax (Rate) dated November 18th, 2021)

6. Amendments in relation to Composite supply of works contract services provided for certain specific purposes

Composite supply of works contract services provided for certain specific purposes to Central Government, State Government, Union territory, a local authority, a governmental authority or a government entity is liable to CGST @ 6% (effective rate 12%) or 2.5% (effective rate 5%), as the case may be. With effect from January 1, 2022, such services when provided to a governmental authority or a government entity shall be charged to CGST @9% (effective rate 18%). Thus, the lower rate of tax viz., 12%/5% shall be applicable only when such services are provided to Central Government, State Government, Union territory or a local authority. (Notification No. 15/2021-CT (R) dt. 18.11.2021).

7. Amendments in relation to job work services of dyeing or printing of textile and textile products

With effect from January 1, 2022, job work services of dyeing or printing of textile and textile products shall not be liable to CGST @ 2.5% (effective rate 5%). The same shall be liable to CGST @ 6% (effective rate 12% when undertaken for registered principal) or 9% (effective rate 18%) when undertaken for un-registered principal. (Notification No. 15/2021-CT (R) dt. 18.11.2021).

8. Amendments in relation to exemption available on services

1. Exemption available on supply of pure services (excluding works contract service or other composite supplies involving supply of any goods) and composite supply of goods and services in which the value of supply of goods constitutes not more than 25% of the value of the said composite supply provided by way of any activity in relation to any function entrusted to a Panchayat under article 243G of the Constitution or in relation to any function entrusted to a Municipality under article 243W of the Constitution to a Governmental Authority or a Government Entity, has been withdrawn.

2. The exemption on services of transport of passengers, with or without accompanied belongings,

a. by non-air conditioned contract carriage other than radio taxi, for transportation of passengers, excluding tourism, conducted tour, charter or hire, or

b. stage carriage other than air conditioned stage carriage;

shall not be available if such services are supplied through an electronic commerce operator, and are notified under sub-section (5) of section 9 of the CGST Act, 2017.

3. The exemption on service of transportation of passengers, with or without accompanied belongings, by metered cabs or auto-rickshaws (including e-rickshaws) shall not be available if such services are supplied through an electronic commerce operator, and are notified under sub-section (5) of section 9 of the CGST Act, 2017.

(Notification No. 16/2021-CT (R) dt. 18.11.2021)

9. Amendments in relation to services notified under section 9(5) of the CGST Act, 2017, the tax on which is payable by the electronic commerce operator

1. Services by way of transportation of passengers by a radio-taxi, motorcab, maxicab and motor cycle were included in clause (i) of the notification. The said clause (i) has been amended to the effect that services by way of transportation of passengers by an omnibus or any other motor vehicle have also been included therein.

2. A new clause (iii) has been inserted in the notification to include supply of restaurant service other than the services supplied by restaurant, eating joints etc. located at specified premises, within the list of services, the tax on which is payable by the electronic commerce operator. Here, specified premises would mean premises providing hotel accommodation service having declared tariff of any unit of accommodation above Rs. 7,500 per unit per day or equivalent.

All the above amendments shall be effective from January 1, 2022.

(Notification No. 17/2021-CT (R) dt. 18.11.2021)

10. CBIC notified exchange rates effective from November 19th, 2021

Central Board of Indirect Taxes and Customs has notified the rate of exchange of conversion of the foreign currencies into Indian currency or vice versa, with effect from 19th November 2021, for import and export of goods. This notification has been issued in supersession of the Notification No. 90/2021-Customs (N.T.), dated November 3rd, 2021.

(Notification No.92/2021-Customs (N.T.) Dated November 18th, 2021)

11. Procedure for Physical Hearing of Appeals by CESTAT

Hon'ble CESTAT has come out with detailed procedure for any party(s) desirous of having physical hearing in a matter. CESTAT's Public Notice has mentioned that any party desirous of getting an appeal heard physically may send a request, as prescribed in Annexure II of the Public Notice, to the Registry by e-mail. The appeal should be ripe for hearing in its normal turn or early hearing already granted or as per the direction of higher courts. The Assistant Registrar, with the approval of the Senior Member available, will issue a cause list. The cause list will contain cases in the order of seniority The cause list will be uploaded on the website of the Tribunal every Thursday evening.

Detailed Public Notice can be accessed at https://cestatnew.gov.in/uploads/writereaddata/Delhi/docs/public_notice15112021.pdf

12.Improvements in GSTR-1

A revamped & enhanced version of GSTR-1/IFF is being made available on the GST Portal to improve the taxpayer experience. 

13.Withdrawal of Application for cancellation of registration

Taxpayers can now withdraw their application for cancellation of registration (filed in Form REG-16) unless the tax officer has initiated action on it.

14. Tenure of National Anti-profiteering Authority extended to 5 years from 4 years

Government has issued a Notification to amend Rule 137 of CGST Rules, 2017. Now, the tenure of National Anti-profiteering Authority is further extended by one more year to 5 years from existing 4 years (Notification No. 37/2021 - Central Tax Dated December 1st, 2021).

15. New Functionalities made available on GST Portal in November 2021

GSTN has issued an update to inform about the details of new functionalities made available on GST Portal in November 2021. These functionalities pertain to different modules such as Registration, Return, Refund, Appeal and other miscellaneous topics. The major functionalities which have been enabled are the facility of withdrawal of application of cancellation of registration, enabling EVC for all taxpayers, providing effective date of suspension in taxpayer's profile, etc.

16. Updation of Form DRC 03 - Intimation of payment made voluntarily or made against a Notice

Form GST DRC 03 has been updated to include payment in DRC 03 against inspection, scrutiny, intimation of tax ascertained through FORM GST DRC-01A, Mismatch (Form GSTR-1 and Form GSTR-3B) and Mismatch (Form GSTR-2B and Form GSTR-3B) (Notification No. 37/2021 - Central Tax Dated December 1st, 2021).