Apart from E-invoicing Threshold, Some Key Changes That Will Take Effect from 1st October 2022
The Central Government hereby appoints October 1, 2022, as the date on which the provisions of sections 100 to 114 of the said Act, except clauses (c) of sections 110 and 111, shall enter into force. The following are the changes that will take effect on October 1, 2022:
1. New limitations on Input Tax Credit claims:
A registered person who claims input tax credit on any inward supply of goods or services or both, other than supplies on which tax is payable on a reverse charge basis, but fails to pay the amount towards the value of such supply, as well as the tax payable thereon, to the supplier thereof within the time limit specified in the second proviso to sub-section (2) of section 16, shall pay an amount equal to the input tax credit claimed in respect of such supply.
while submitting the return in FORM GSTR-3B for the tax period immediately following the 180-day period from the date of invoice issuance:
Now, the government. can limit your ITC if your vendor:
- Failed to pay taxes for such period or underpaid taxes by a certain percentage
- Utilized ITC to pay taxes in excess of the maximum allowable limit.
- Registered within such time frame
- Any other cases that are prescribed
The period, limit, and percentage-age will be prescribed in due course. As a result, you must exercise extreme caution when selecting your vendor.
2. Time Limit Extension:
For any financial year, the following can be done until November 30th of the current financial year:
i. Take advantage of ITC for any invoice/debit note issued during the financial year.
ii. Credit notes are issued for supplies made during a fiscal year.
iii. Corrections to GSTR 1, GSTR 3B, and GSTR 8
3. Registration cancellation:
If an officer cancels registration on his own,
i. A composite taxpayer failed to file his or her tax return for a fiscal year after three months from the due date.
ii. A regular taxpayer did not file a return for the prescribed continuous tax period.
Note: According to Rule 21, registration can be canceled if a monthly return filler does not file a return for a continuous period of six months or a quarterly return filler does not file a return for a continuous period of two tax periods.
4. GSTR 1 has been updated:
The filing of outward supply returns in chronological order is now required. Furthermore, the government may impose conditions/restrictions on the completion of outward supply details and subsequent communication to recipients.
5. Some GST Return Changes:
i. QRMP dealers can pay taxes through self-assessment or another method that the government will prescribe later.
ii. Filling out GSTR 3B for the current period is restricted if GSTR 1 for the previous period is not completed.
iii. The deadline for completing GSTR 5 and GSTR 5A is now the 13th of the following month.
iv. A late fee for failure to complete the TCS Return is being implemented.
6. Using Self-Assessment to Claim Input Tax Credit:
Your ITC will be recorded in the electronic credit ledger. The concept of Provisional ITC has been dropped. Furthermore, if your supplier failed to pay taxes to the government. The ITC and interest will then be reversed.
i. If you want to claim a refund for an excess balance in Elec, you must fill out a refund application. Cash Book
ii. Refunds for supplies to SEZ Developers/Sez Units must be filed within two years of the due date of GSTR 3B for such supplies.
iii. A specialized agency of the United Nations, a Multilateral Financial Institution and Organization, a Consulate, or an Embassy, for example, can claim a refund of tax on inward supplies made within two years of the supply’s last day of the quarter in which it was made.
8. Repercussions of failing to pay your vendor on time:
If you received ITC but did not pay the supplier within 180 days of the invoice date, you must pay tax as well as interest.
9. The concept of two-way communication and matching is omitted:
Form GSTR 2, GSTR 3, matching concept, two-way communication process in return filing, and so on are no longer required.