GST UPDATES IN UNION BUDGET 2021

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GST UPDATES IN UNION BUDGET 2021

The Finance Bill 2021, have proposed certain progressions in CGST Act, 2017 and IGST Act, 2017 to track input credit frauds and to secure Government incomes. Few amendments will be applicable from retrospective effect, while there are further clarifications on the some of the clauses or sections, also some of the sections are amended or added or deleted. The key updates about GST proposed changes in Union Budget’ 2021 are as under:

  1. The following clause or proviso are the new insertion in the CGST Act’2017:
    1. Section 7(1)(aa) is inserted in CGST Act with retrospectively effect from the 1s t 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.
    2. Section 16(2)(aa) is inserted in CGST Act to provide that input tax credit on invoice or debit note may be entitled 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.
    3. Section 107(6) is inserted in CGST Act to provide that no appeal shall be filed against an order made under sub-section (3) of sect ion 129, unless a sum equal to twenty-five percent of penalty has been paid by the appellant.
    4. Explanation inserted to sub-section 75(12) of the CGST Act 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.
  2. The following clause or proviso are amended in the CGST Act’2017:
    1. Section 50 of the CGST Act is being amended, retrospectively, to substitute the proviso to sub-section (1) so as to charge interest on net cash liability with effect from the 1s t July,2017.
    2. 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 (Assessments), Chapter XIV (Inspection, Search, Seizure and arrest) or Chapter XV (Demand and Recoveries) till the expiry of a period of one year from the date of order made thereunder.
  3. The following changes are proposed in the CGST Act’2017:
      1. Section 129 – Detention, seizure and release of goods
        1. When the owner comes forward for payment of such tax and penalty –He as to pay applicable tax and 200% penalty of the tax payable
        2. When the owner does not come forward for payment of such tax and penalty – He has to pay penalty equal to 50% of the value of goods or 200% of tax payable thereon whichever is higher
        3. Further proviso to sub sect ion (6) has been inserted which provides that the conveyance shall be released on payment by the transporter of penalty under sub-section 3 or Rs . 1 lac whichever is less.
      2. It is hereby proposed to include in zero rated supply
            1. export of goods or services or both or
            2. supply of goods or services or both for authorized operations to a Special Economic Zone developer or a Special Economic Zone Unit
      3. It is being proposed that option of ‘With payment of Duty” would be allowed only to a notified class of person or notified class of goods or service. Further registered person making supply of goods has to link the foreign remittance with the refund claimed and in case of non-realization of sales proceeds within 30 days from the end of the expiry of time limit prescribed under FEMA Act 1999 would be liable to deposit the refund so received along with the applicable interest.
  4. The following sub-section is omitted in the CGST Act’2017:
    1. It is hereby proposed to omit Sub section 35(5)
    2. And section 44 has been substituted so as to provide that Form 9 and Form 9C i.e. the reconciliation shall be self-certified by the registered person within such specified time as may be prescribed.

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