Key changes to the GST in Union Budget 2022

The Government keeps on updating and amending the tax-related provisions. Updating according to these provisions is not always easy for online businesses. And hence, the Woocommerce GST plugin is often helpful to make changes to the GST settings of your e-commerce website. But the government has recently put up a lot of work on our shoulders too. Want to know how?

Recently, what has caught everyone’s eye is the Union Budget 2022. The Union Budget stands as the most important event for the revival of the Indian Economy. There are many debates after the presentation on the Union Budget 2022 on the 1st of February. Along with that, a lot of confusion is observed about what would be taxed and what wouldn’t. 

We are here for the breakdown of the amendments in the Central Goods and Service Tax(GST) introduced in the Finance Bill, 2022 of the Union Budget 2022. This year, strong revenues have been observed. The record collection of Rs.1,40,986 crore gross GST revenues was achieved in January 2022. It is the highest since the GST outset. This assures the Indian Economy is on the right track post-pandemic. 

Check out the changes to be adapted in your GST transactions.

Note – These amendments in the GST law will apply once notified by the CBIC.

Amendments regarding GST registration by officers : 

Section 29 of the CGST Act is amended for the cancellation of GSTIN by the officer.

The officer will cancel the GST registration if:

• If a composition taxpayer has not filed the annual return of 3 months by 30th April of the following financial year.
• A person other than a composition taxpayer has not filed a return for a financial year for such a continuous period as prescribed from time to time.
  (The default consecutive duration of six months in return filing has now been changed to a consecutive tax period default as may be prescribed.)

Amendments regarding Inward supplies and Outward supplies :

Inward Supplies :

Section 38, which deals with furnishing the inward supplies, is substituted by prescribing terms and conditions for detailing the inward supplies. The section is amended completely to remove reference to earlier GSTR-2 and replace it with GSTR-2A and GSTR-2B with a new heading as ‘Communication of details of inward supplies and input tax credit’.

The section now prescribes the manner, conditions and restrictions for availing of the input tax credit. The motive behind this amendment is to set up a two-way communication process while filing the return.

Outward supplies :

The Finance bill stated conditions for providing details of an outward supply in GSTR-1 and communication of such details to the recipients via GSTR-2B. Whereas, in the outward supplies, due to the suspension of the GSTR-2 return, the two-way communication process while filing the return was cancelled.
As reported in GSTR-1, the deadline for rectifying the errors regarding outward supplies is now extended up to 30th November of the following financial year. It availed sequential filing of outward supplies without skipping the tax periods. The current time limit is up to the due date of furnishing GSTR-3B in September month of the next financial year.

Modification and removal of sections 

Section 41 of the CGST Act is being modified to –

• To abolish the concept of “claim” of the eligible input tax credit on a “provisional” basis. 
• To avail the self-assessed input tax credit subject to such conditions and restrictions as may be prescribed.

To eliminate the two-way communication process in the return filing the following sections have been removed:

• Section 42 about matching, reversal and reclaiming of ITC 
• Section 43 pertaining to matching, reversal and reduction in output tax liability
• Section 43A regarding the procedure for availing ITC of the CGST Act and furnishing returns

Amendments in the provisions regarding furnishing of the GST returns

The non-resident taxpayer shall furnish the return for a month by the 13th of the following month

Under proviso to sub-section (1), there’s given an option to the person filing the return to pay either the self-assessed tax or an amount that may be prescribed.

The furnishing of details of outward supplies (GSTR-1) was added as a condition for filing GSTR-3B for the said tax period.

Amendments governing the electronic credit ledger

An amendment has been made in section 49 of the CGST Act to prescribe the restrictions for utilising the amount in the electronic credit ledger. 

This amendment allows the transfer of the amount available in the electronic cash ledger under the CGST Act of a registered person to the electronic cash ledger under the CGST Act or the IGST Act of a distinct person for prescribing the maximum proportion of output tax liability which may be excluded through an electronic credit ledger.

This important amendment avails the taxpayers with multiple GSTINs to transfer excess cash balances from state to state.

The amended time limit for issuance of credit notes

The amendment in Section 34(2) is substituted to provide an extended time limit for the issuance of the credit note. The deadline is now extended up to the 30th of November following the end of the financial year or the annual return filing date, whichever is earlier; over the September following the end of the financial year

Amended provision of claiming refund of unutilised ITC

Sub-section (3) of section 50 of the CGST Act has been proposed to be backdated to 

• To avail the refund of any balance in the electronic cash ledger in the only prescribed manner
• To provide an option of refunding the claim of ITC on inward supplies within 2 years from the last day of the time the supply was received
• To provide for levy of interest on input tax credit wrongly availed and utilised
• To extend the scope for all types of refunds.

This amendment puts pressure on businesses to report the ITC accurately and every so often. The disorganization in such a case might cost a huge penalty to the business and lead to a major loss.

All these amendments and updates are to acquire ease in transactions and understanding of the concept and provisions under GST law. Online GST consultants, reference data, previous and new updates since the output of GST, GST invoice formats, GST invoice plugin, GST slab rates, all this is a click away. 

And Woocommerce GST plugin is one of those clicks. We bring ease to all the GST transactions of your WooCommerce website. We adapt the new updates with great efficiency and are working hard to provide better support to our consumers every day.  Also, our team worked to make the very familiar term ‘GST’ understandable. A good understanding of the concept of ‘One Nation, One Tax’ is very important for every tax-paying citizen, isn’t it? Let us know your thoughts in the comments below.