Recent Important amendments in the CGST Rules (Notification No. 20/2024 – Central Tax dated October 08, 2024 )

  1. Rule 36 - Documentary requirements and conditions for claiming input tax credit

    • Effective from October 08, 2024.
    • Sub-rule (3) of Rule 36 of the CGST Rules states that no ITC shall be availed where tax has been paid due to fraud, willful misstatement, or suppression of facts.

“(3) No input tax credit shall be availed by a registered person in respect of any tax that has been paid in pursuance of any order where any demand has been confirmed on account of any fraud, willful misstatement or suppression of facts under section 74”.

    • The amendment clarifies that such an order must be under Section 74 of the CGST Act.

 

  1. Rule 46 - Tax invoice

    • Effective from November 01, 2024
    • The second proviso to Rule 46 allowed registered persons to issue a consolidated invoice at the end of a month if daily purchases exceeded Rs. 5,000.

“Provided further that where an invoice is required to be issued under clause (f) of sub-section (3) of section 31, a registered person may issue a consolidated invoice at the end of a month for supplies covered under sub-section (4) of section 9, the aggregate value of such supplies exceeds rupees five thousand in a day from any or all the suppliers:”.

    • This proviso has been omitted, meaning recipients under Section 9(4) can no longer issue a consolidated invoice.

 

  1. Insertion of Rule 47A - Time limit for issuing tax invoice where the recipient is required to issue invoice

    • Effective from November 01, 2024

“47A. Time limit for issuing tax invoice in cases where recipient is required to issue invoice.– Notwithstanding anything contained in rule 47, where an invoice referred to in rule 46 is required to be issued under clause (f) of sub-section (3) of section 31 by a registered person, who is liable to pay tax under sub-section (3) or sub-section (4) of section 9, he shall issue the said invoice within a period of thirty days from the date of receipt of the said supply of goods or services, or both, as the case may be.”

    • Recipients liable under RCM must issue invoices within 30 days from the date of supply.
    • This ensures compliance with Section 31(3)(f), reducing tax-related delays and potential penalties.

 

  1. Rule 66 - Submission of return by persons deducting tax at source

    • Effective from November 01, 2024, ensuring timely TDS returns
    • The new provision requires that the return in FORM GSTR-7, used for deducting TDS under Section 51 of the CGST Act, must be furnished on or before the 10th day of the month succeeding the relevant calendar month

“In the said rules, in rule 66, in sub-rule (1), after the word, letters and figure ‘FORM GSTR-7’, the words ‘, on or before the tenth day of the month succeeding the calendar month,’ shall be inserted with effect from the 1st day of November, 2024.”

 

  1. Rule 89 - Refund of tax, interest, penalty, fees, or other amounts

    • Effective from October 08, 2024 sub-rules (4A) and (4B) of Rule 89 of the CGST Act have been omitted.  Consequently, reference of these sub-rules in clauses (B), (C) and (E) of sub-rule (4) and in explanation to sub-rule (5) have also been omitted.

 

  1. Rule 96 - Refund of IGST on exports

    • Sub-rule (10) of Rule 96 omitted from October 08, 2024.
    • Restrictions on IGST refunds for exporters using concessional/exempted inputs removed.
    • Rule 86(4B)(b) amended accordingly.
    • These amendments streamline procedures and ensure that refunds on zero-rated exports are no longer considered contraventions of earlier provisions, provided the reassessment of the Bill of Entry is completed. The changes to the definitions of "Net ITC" and "Adjusted Total Turnover" further enhance transparency in refund calculations. This overall move is expected to foster a more business-friendly environment, encouraging exports and reducing procedural hurdles.

 

  1. Rule 164 - Closure of proceedings under Section 128A for demands under Section 73

    • Rule 164 inserted from November 01, 2024.
    • Provides electronic application process for waiver of interest and penalty.
    • Specific timelines and formats for application submission and officer response introduced. GST Amnesty Scheme 2024 ( Provide details in separate Article)

 

  1. Amendments due to insertion of Section 74A

    • Section 138 of Finance (No.2) Act, 2024, inserted vide Notification No. 17/2024–Central Tax dated September 27, 2024 the new Section 74A into the CGST Act, will come into force from 1st November 2024.
    • Changes made in Rules 88B, 88D, 96B, 121, and 142 to align with Section 74A.

 

  1. Amendments in various forms

    • FORM GST REG-20 replaced with a new form.
    • FORM GST REG-31 modified to include suspension provisions for Rule 10A/21 violations.
    • FORM GSTR-9 updated to reconcile ITC with GSTR-3B and GSTR-2B.
    • FORM GST APL-01 and APL-05 modified for reduced pre-deposit.
    • FORM INS-01 updated to align with Bharatiya Nyaya Sanhita, 2023.
    • FORM DRC-01A updated to reference Section 74A from November 01, 2024.
    • New forms GST SPL-01 to GST SPL-08 introduced for Section 128A compliance.

 

  1. Special procedure for rectification of orders under Section 16(4) violations

o  Notification No. 22/2024-CT outlines rectification process for ITC   denied under Section 16(4).

o   Registered persons must apply within six months from October 08,   2024.

 

Procedure to be followed by the Registered Person:

1.    File an application for rectification of an order electronically on the           common portal, within a period of six months from October 08, 2024.

2.  Along with the application, the Registered Person should upload the     information in the proforma in Annexure A as attached with Notification     No. 22/2024-Central Tax dated October 08, 2024.

 

Procedure to be followed by the Proper Officer:

1. The Authority who had issued the rectification of order, shall take a decision on the application made by the Registered Person and issue the rectified order, within a period of three months from the date of the said application.

2.  The Authority who has issued a rectified order, then he shall upload a summary of the rectified order electronically in –

FORM GST DRC-08 (Rectification of Order) - in cases where rectification of an order issued under Section 73 or Section 74 of the CGST Act; and

FORM GST APL-04 (Summary of the demand after issue of order by the Appellate Authority, Tribunal or Court) - in cases where rectification of an order issued under section 107 or section 108 of the CGST Act.

 

  1. Waiver of late fee for delayed filing of GSTR-7

o   Notification No. 23/2024-Central Tax supersedes earlier Notification   No. 22/2021.

o    No late fee if CGST deducted at source is Nil.

o    Late fee capped at Rs. 2,000 from June 2021 onwards.

o    Effective from November 01, 2024.

 

  1. Mandatory registration for metal scrap suppliers

o Earlier vide NN 5/2017-Central Tax dated June 19, 2017, Persons supplying taxable goods/services on a reverse charge basis under Section 9(3) were exempt from registration.

o  Aforesaid Notification amended to provide that the above exemption shall not be available to any person engaged in the supply of metal scrap, falling under Chapters 72 to 81 in the first schedule to the Customs Tariff Act, 1975.

o   So, now mandatory registration for suppliers of metal scrap.

 

  1. TDS on supply of metal scrap

Notification No. 50/2018-Central Tax dated September 13, 2018 has been amended to provide that any registered person receiving supplies of metal scrap from other registered person shall deduct tax at source, as required under Section 51 of the CGST Act.

The above amendment shall come into force w.e.f. October 10, 2024 vide Notification No. 25/2024-Central Tax dated October 09, 2024. 

o   From October 10, 2024 the Registered Person purchasing Metal Scrap to deduct 2% TDS from the payment made or credited to the Registered Supplier.

o  TDS is required to deduct where the value of goods supplied exceeds Rs. 2.5 lakhs.

o  TDS @2% is required to be deducted on the value of goods excluding CGST/SGST/UTGST/IGST.

o   Every person deducting TDS is required to file a return in FORM GSTR-7 on or before 10th of the next month.

o    A certificate for deduction of TDS is to be issued in FORM GSTR 7A.

o  Deductee can claim the TDS deducted, on the basis of information furnished by the Deductor in his return i.e. FORM GSTR-1.

o    No deduction shall be made if the location of the supplier and the place of supply is in a State or Union territory which is different from the State or as the case may be, Union territory of registration of the recipient.

 

CA Rupesh Uchhadiya on