REGULATORY UPDATES
CIRCULAR NO. 167 / 23 /2021 – GST, DATED 17-12-2021
CBIC issued clarification on various issues relating to shift in GST liability from restaurant to Food aggregators
Editorial Note: From January 1st, 2022, the tax on supplies of restaurant services supplied through E-commerce operators (ECOs) shall be paid by ECOs. In this regard, the CBIC has clarified several points such as ITC reversal by ECOs, TCS requirement, compliance requirement etc.
CHANGES EFFECTIVE FROM 1-01-2022
- Registered persons can’t file GSTR-1 if not furnished GSTR-3B for the preceding month
- Changes in GST rate on textile, footwear, etc. from 5% to 12%
- Job work services w.r.t dyeing or printing of textile and textile products falling under Chapter 50 to 63 taxable @ 12% to registered persons and @ 18% to unregistered persons
- Composite supply of works contract services to Governmental Authority or Government Entity taxable @ 18%
- Food delivery apps like Zomato & Swiggy, and Cloud kitchens brought within the restaurant services, liable to pay GST @5% with no ITC
- Recovery of self-assessed tax without notices if there is difference between GSTR 1 and GSTR 3B
- GST leviable on services provided by Club or Association to its members retrospectively w.e.f. July 01, 2017
- GST ITC available only when supplier pays and files GSTR 1, which matches with GSTR 2A/ 2B
- Aadhaar authentication is compulsory under GST w.e.f. January 01, 2022 for filing refund claim and application for revocation of cancellation of registration
- Bar on disclosure information
The CBIC vide Notification No. 39/2021–Central Tax dated December 21, 2021 notified the amendment made vide Section 120 of the Finance Act, 2021 w.e.f. January 01, 2022 to amend Section 152(1) of the CGST Act, 2017 to clarify that no information obtained under Sections 150 and Section 151 of the CGST Act, 2017, shall be used by the commissioner or any officer authorized by him, for the purposes of any proceedings under CGST Act, 2017, without giving an opportunity of being heard to the person concerned.
- Commissioner can pass Order for Provisional Attachment of property/ bank account of taxable or any person to protect Govt. revenues
The CBIC vide Notification No. 39/2021–Central Tax dated December 21, 2021 notified the amendment made vide Section 115 of the Finance Act, 2021 w.e.f. January 01, 2022 in Section 83 of the CGST Act, 2017 to widen the scope of the power to provisionally attach any property by replacing specified Sections covered therein with complete Chapters of the CGST Act, 2017. Also, it is provided that provisional attachment shall remain valid for the entire period starting from the initiation of any proceeding under Chapter XII (assessment), Chapter XIV (inspection, search, seizure and arrest) or Chapter (Demands and Recovery) till the expiry of a period of one year from the date of order made thereunder.
In addition, the Commissioner is now empowered to provisionally attach, property belonging to any persons who retain the benefits arising out of an offence or at whose instance the offence is committed.
- Amendments proposed in Section 129 and 130 of the CGST Act, 2017 notified
The CBIC vide Notification No. 39/2021–Central Tax dated December 21, 2021 notified the amendments made vide Section117 and118 of the Finance Act, 2021 w.e.f. January01,2022inSection129and130oftheCGST Act,2017:
- Enhanced penalty (previously penalty and tax) under Section 129(1) (a) & (b) of the CGSTAct, 2017.
- Section129(2) has been omitted.
- Specified period of issuance of notice and passing of order under Section129 (3) of the CGSTAct, 2017.
- No penalty shall be determined without giving opportunity of hearing as per amended Section 129(4) of the CGST Act, 2017.
- Delinking Section 129 from Section130 of the CGSTAct, 2017
13.GST Dept can collect data from any person under GST
The CBIC vide Notification No. 39/2021–Central Tax dated December 21, 2021 notified the amendment made vide Section 119 and 121 of the Finance Act, 2021 w.e.f. January 01, 2022 to substitute Section 151 of the CGST Act, 2017, in a manner to empower the jurisdictional commissioners to call for information from any person relating to any matter dealt with in connection with the CGST Act, 2017, within such time, in such form, and in such manner, as may be specified therein.
Correspondingly, Section 168(2) of the CGST Act, 2017 has been amended to omit the power of the jurisdictional commissioner to exercise powers under Section151 (1) of the CGSTAct, 2017.
CLASSIFICATION OF GOODS
Papad of different shapes and sizes : ‘Papad of different shapes and sizes’ merits classification under Heading No. 19059040 under Entry No. 96 of Notification No. 02/2017-Central Tax (Rate), dated 28-6-2017 and, accordingly, chargeable to NIL rate of GST – Jayant Snacks and Beverages (P.) Ltd., In re – [2021] 129 taxmann.com 419 (AAAR-GUJARAT)
CLASSIFICATION OF SERVICES
Government Entity : Where applicant is an educational institution established under Indian Institute of Management Act, 2017 and it has been receiving more than 90 per cent of funds from Central Government, applicant is a Government Entity – Indian Institute of Management, In re – [2021] 129 taxmann.com 420 (AAR – TAMILNADU)
SECTION 9 OF THE CENTRAL GOODS AND SERVICES TAX ACT, 2017 – LEVY AND COLLECTION OF TAX
Where applicant is an educational institution established under Indian Institute of Management Act, 2017 and in course of discharging functions it has been receiving security services from a registered body corporate while legal services from an individual advocate, in respect of security services applicant is not liable under reverse charge mechanism to pay tax while it is liable to pay tax under reverse charge mechanism in respect of legal services received – Indian Institute of Management, In re – [2021] 129 taxmann.com 420 (AAR – TAMILNADU)
SECTION 11 OF THE CENTRAL EXCISE ACT, 1944 – RECOVERY OF SUMS DUE TO GOVERNMENT
Outstanding arrears of duty can be realized by adjustment against rebate claim sanctioned – Mangalam Cement Ltd. v. Commissioner of Central Goods and Service Tax, Jodhpur – [2021] 133 taxmann.com 187 (New Delhi – CESTAT)
SECTION 11B OF CENTRAL EXCISE ACT, 1944 – CLAIM FOR REFUND OF DUTY AND INTEREST, IF ANY, PAID ON SUCH DUTY
Service Tax paid under protest for prior to 18-4-2006 liable to be refunded with interest @ 12% per annum from date of payment of duty by appellant till date of refund – Raymond Ltd. v. Commissioner, Central Excise Customs & Service Tax, Raipur – [2021] 133 taxmann.com 186 (New Delhi – CESTAT)
SECTION 51 OF THE CENTRAL GOODS AND SERVICES TAX ACT, 2017 – TAX DEDUCTION AT SOURCE
Where applicant-educational institution being a body set up by an Act of Parliament with more than 51 per cent participation by way of funding is liable to deduct tax at source on account of CGST and SGST from payment made or credited to its suppliers – Indian Institute of Management, In re – [2021] 129 taxmann.com 420 (AAR – TAMILNADU)
SECTION 66A OF FINANCE ACT, 1994 – CHARGE OF SERVICE TAX ON SERVICES RECEIVED FROM OUTSIDE INDIA
Person receiving taxable service of goods transport operators (GTO) liable to tax only from 18-4-2006 after enactment of Section 66A of Finance Act, 1994 – Raymond Ltd. v. Commissioner, Central Excise Customs & Service Tax, Raipur – [2021] 133 taxmann.com 186 (New Delhi – CESTAT)
Service Tax demanded from service recipient of GTO Services prior to 18-4-2006 not warranted – Raymond Ltd. v. Commissioner, Central Excise Customs & Service Tax, Raipur – [2021] 133 taxmann.com 186 (New Delhi – CESTAT)
SECTION 97 OF THE CENTRAL GOODS AND SERVICES TAX ACT, 2017 – ADVANCE RULING – APPLICATION FOR
Application for : Advance ruling can be sought by recipient of a supply, who is made liable to pay tax under section 9(3) only, and such recipients cannot seek ruling on applicability of an exemption notification/preferential rates on such supplies received by them – Indian Institute of Management, In re – [2021] 129 taxmann.com 420 (AAR – TAMILNADU)
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