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Important changes in GST Law effective from January 1st 2022

1. New GST Compliance obligation for providing restaurant Services on E-Commerce Operators:

All the E-Commerce Operators providing “Restaurant Services” will be liable to pay GST on such services instead of the hotel suppliers. The GST @ 5% will be paid by such eCommerce Operators like Zomato, Swiggy, etc.

 

2. Blocking of GSTR-1 for Non filing of GSTR 3B:-

GSTR-1 return filing facility will be blocked if a registered Taxpayer have not submitted the return in FORM GSTR-3B for the previous two return periods. For example, if a taxpayer has not filed GSTR-3B for October 2021 and November 2021, the GSTR-1 filing facility will be blocked from the 1st January 2022.

 

3. GST Provision related to communication of Details of invoice or debit note to the recipient:-

The provisions of Section 16 of the CGST Act has been amended wherein sub-section (2), after clause (a), the clause has been inserted, namely “(aa) the details of the invoice or debit note referred to in clause (a) has 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 in the manner specified under section 37. This will ensure validated credit by the recipient before availing the same.

 

4. Correction in Inverted Duty structure in Footwear and Textiles sector:-

The GST Council recommended to introduce GST rate changes from January 2022 in order to correct the inverted duty structure in the Footwear and Textile Sector. All footwear, irrespective of prices will attract GST at 12 percent, while barring cotton, all textile products including readymade garments will have GST at the rate of 12 percent.

 

5. Self-assessed tax shall include the tax payable in respect of details of outward supplies:

In the Provisions of section 75, in sub-section (12), a new Explanation has been inserted, namely “For the purposes of this subsection, the expression “self-assessed tax” shall include the tax payable in respect of details of outward supplies furnished under section 37, but not

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included in the return furnished under section 39.” So whatever is declared in the Statement of Outward supply i.e., GSTR-1 shall also be treated as a Self-Assessed liability

 

6. No appeal to be filed against section 129(3) order, unless a sum equal to 25% of the penalty is paid:-

Under Section 107, sub-section (6), has been amended with an insertion of new proviso, namely “Provided that no appeal shall be filed against an order under sub-section (3) of section 129, unless a sum equal to twenty-five percent of the penalty has been paid by the appellant.” This will add additional compliance burden in respect of penalties imposed in the Adjudicating Orders while filing appeals.

 

7. Rules related to Mandatory Aadhaar authentication for GST Refund & Revocation application:-

Aadhaar authentication with the GSTIN for claiming GST Refunds (all types of refunds and irrespective of the amount of claim involved) and Revocation application has been made Mandatory and are to be effective from 1 January 2022.

 

8. Proper officer detaining or seizing goods or conveyance to issue notice within 7 days of such detention or seizure:-

When the proper officer has detained or seized goods or conveyance, he shall issue a notice within seven days of such detention or seizure, specifying the penalty payable, and thereafter, pass an order within a period of seven days from the date of service of such notice, for payment of penalty. The time lines have been set clearly.

 

9. Correction in Inverted Duty structure in Footwear and Textiles sector:

The GST Council decided to introduce GST rate changes from January 2022 in order to correct the inverted duty structure in the Footwear and Textile Sector. All footwear, irrespective of prices will attract GST at 12 percent while barring cotton, all textile products including readymade garments will have GST at the rate of 12 percent.

 

RUSHABH SHAH

Chartered Accountants