Taxmann’s Analysis of the Amendments Introduced in the CGST Rules | 45th GST Council Meeting

Amendments introduced in CGST Rules based on

45th GST Council Meeting recommendations, and its implications

Taxmann’s Indirect Tax Research & Advisory’ Team September, 2021

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Contents Amendments introduced in CGST Rules based on 45th GST Council Meeting recommendations, and its implications

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1.

Aadhaar Authentication for already registered persons in specified cases

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1.1.

Scenarios where Aadhaar Authentication would be mandatory

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1.2.

Whose Aadhaar would be required to be authenticated

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1.3.

e-KYC where Aadhaar is not available

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1.4.

Notified category of persons who are not required to do Aadhaar Authentication 6

2.

Refund related amendments

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2.1.

Manner and time-limit for filing refund of tax paid under wrong head

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2.2.

Refund would be credited to PAN linked bank account

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3.

Furnishing PAN linked bank account details for registration

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4.

Compliance related amendments

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4.1.

Frequency of filing Form GST ITC-04 has been changed

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4.2.

Filing of Form GSTR 3B of last month is mandatory for filing Form GSTR 1

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In continuation to decisions taken by the GST Council in its 45th meeting, the Government on September 24, 2021, has notified Central Goods and Services Tax (Eighth Amendment) Rules 2021. These Rules introduced several amendments under the Central Goods and Services Tax (‘CGST’) Rules, 2017 to provide amendments in provisions relating to registration, refund etc. In this document, we have discussed these amendments and its implications.

Amendments introduced in CGST Rules based on 45th GST Council Meeting recommendations, and its implications 3

1. Aadhaar Authentication for already registered persons in specified cases (Effective Date: to be notified)

1.1. Scenarios where Aadhaar Authentication would be mandatory X

The existing registered persons in the following cases are required to do

Aadhaar Authentication of their registration: (a) (b) (c)

Revocation of cancellation of registration; IGST refund on the export of goods under Rule 96 of CGST Rules; or Refund under rule 89 of CGST Rules Consequent amendments have also been made in the above provisions (i.e. registration, refund etc.) to provide that Aadhaar Authentication would be a pre-requisite for filing applications

1.2. Whose Aadhaar would be required to be authenticated X

Following persons are notified whose Aadhaar would be required to be

authenticated: (a) (b)

SL. No.

Authorized Signatory of the registered person; and A specified individual as per below table Registered Person

Aadhaar Individual person is to be authenticated

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Proprietorship firm

Proprietor

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Partnership firm

Any partner

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HUF

Karta

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Company

Managing Director or any whole-time Director

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AOP/BOI /Society

Any of the Members of the Managing Committee

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Trust

Trustee

1.3. e-KYC where Aadhaar is not available X

Where Aadhaar number has not been assigned to an individual, e-KYC would be required to be done

X

Following documents are required to be submitted for e-KYC: (a) (b) (i) (ii) (iii) (iv)

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Aadhaar Enrolment ID slip, and Any document such as Bank passbook with photograph; or Voter identity card issued by the Election Commission of India; or Passport; or Driving license issued by the Licensing Authority under the Motor Vehicles Act, 1988

X

Further, Aadhaar authentication would be required to be done within 30 days from the date of allotment of Aadhaar number

1.4. Notified category of persons who are not required to do Aadhaar Authentication X

The following registered persons are exempted from the requirement of Aadhaar authentication: (a) (b) (c) (d) (e) (f)

A person who is not a citizen of India Department or establishment of the Central Government or State Government Local authority Statutory body Public Sector Undertaking Person to whom Unique Identification Number is granted.

TAXMANN’s Comments:

The Finance Act, 2019, had made amendments in the CGST Act and inserted the requirement for the Aadhaar authentication. The functionality in this regard had already been deployed on the GSTN portal w.e.f. January 06, 2021.

Now, the CGST Rules are amended to provide the manner and timelines in respect of such amendment in the CGST Act. Notably, the effective date for the applicability of the impugned requirement is yet to be notified.

2.

Refund related amendments

2.1. Manner and time-limit for filing refund of tax paid under wrong head (Effective Date: September 24, 2021) X

Specific Rule has been inserted in CGST Rules to provide the manner and time limit for claiming the refund of tax paid under the wrong head

X

It has been provided that a refund can be filed in Form GST RFD-01 within a period of 2 years from the date of payment of tax under the ‘correct head’

X

To dispose of the old applications, it has been provided that two years will commence from the effective date of the amendment, i.e. September 24, 2021

X

CBIC has also issued a clarification1 in this regard

2.2. Refund would be credited to PAN linked bank account (Effective Date: to be notified) X

The refund would be disbursed only in the Bank Account, which is in the name of the registered person and is obtained on the PAN of the registered person 5

X

3.

Further, in the case of the proprietor, the PAN should also be linked with his Aadhaar

Furnishing PAN linked bank account details for registration (Effective Date: to be notified)

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X

As per the existing provisions, a registered person who has been granted the registration is required to submit the bank account details within 45 to the authorities

X

Amendment has been made in the CGST Rules to provide that such bank account should be in the name of the registered person, and the same shall also be linked with its PAN

X

Further, in the case of the proprietor, the PAN should also be linked with his Aadhaar

Compliance related amendments

4.1. Frequency of filing Form GST ITC-04 has been changed (Effective Date: October 01, 2021) X

Frequency for filing Form GST ITC-04 has been reduced from quarterly basis to half-year/yearly basis as under:

SL. No.

Aggregate turnover in preceding financial year

Frequency (25th of the end of)

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More than 5 Crore rupees

Six months starting from • April 01 • October 01

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Up to 5 Crore rupees

A year

4.2. Filing of Form GSTR 3B of last month is mandatory for filing Form GSTR 1 (Effective Date: January 01, 2022) X

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Form GSTR – 1 would not be allowed to be filed/furnished where the registered person has not furnished Form GSTR – 3B for the immediately preceding month

Circular No 162/18/2021-GST Dated September 25, 2021

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