In continuation to the previous blog, there are certainly more important changes in CGST Act,2017 which commence on such date as the Central Government may, through a notification in the Official Gazette, appoint.
- Section 74 of CGST Act,2017
From Section 74, recovery of tax, overrunning and confiscation of conveyances and goods in transit are now made an independent proceeding.
Writer’s enlightenment: Earlier, section 74 explanation 1 (ii) provides that when notice under the same proceedings is issued to the main person liable to pay tax and some other persons, and aforesaid proceedings counters the main person has been finalized under Section 73 or 74, the proceedings in opposition to all persons liable to pay penalty within Section 122,125,129 and 130 are deemed to be concluded.
Now, Section 129 & 130 have been omitted from the above explanation which means seizure and confiscation of goods and conveyance in transit is now a separate proceeding from the recovery of tax under section 74.
- Section 75 of CGST Act, 2017
The self-assessed tax directed to under section 75 of the CGST Act should also include the outward sales/supplies as reported in the GSTR-1 within Section 37 of the CGST Act, but which has been skipped during reporting in the GSTR-3B under Section 39.
Writer’s enlightenment: Section 75 states where there is any self-assessed tax, then it can be recovered without issuing show cause notice and the recovery proceedings under section 79 can be directly invoked. Now, the scope of self-assessed tax has been widened.
- Section 130 of the CGST Act
Section 129 is delinked from Section 130. In consequence, proceedings regarding seizure/overrunning, release, and detention of goods and conveyances in transit will be distinct from the levy of penalty for the impounding of goods and conveyance.
Writer’s enlightenment: As earlier both section 129 and 130 provided for 200 percent of the tax payable on such goods but now these two sections are penalty provision which states 100 percent of the tax payable will be the penalty payable towards detention, seizure, or confiscation of goods or conveyance and the reference of tax and interest has been deleted.
- Section 152 of the CGST Act
The Jurisdictional Commissioner now connects with any person for information related to any matter dealt with in connection with the Act within Section 151, along with Section 168. Apart from this, Section 152 is revised to give an opportunity of listened before using information obtained within Section 150 or 151 of the Act.
Writer’s enlightenment: As this provision relates to the publishing of information, it is clarified that without giving an opportunity of being heard to the person concerned, no information produced for section 150 or 151 shall be used for any proceedings under this Act.
- Section 16 of the IGST Act
The IGST Act was also amended in Section 16, which defines a zero-rated supply. Three amendments were made – (1) To state that supply to SEZ units /developers will be zero-rated only if it is authorized operations. (2) Only notified persons or supplies of goods/services can avail the status of zero-rated when IGST is paid. (3) Foreign exchange remittance will be linked in case of export of goods with the refund.
Writer’s enlightenment: Earlier, there was no restriction for making the zero-rated supply of goods or services with payment of tax and the exporter was eligible for a refund of GST paid on paid on goods and services.
But now, the Government may notify such class of persons who may make zero-rated supply on payment of integrated tax and claim a refund of the tax so paid.
The payment route of IGST was beneficial for exporters as the refund of credit on capital goods was allowed which is not allowed under the LUT method.
It can be concluded that government officials are keeping a close eye on the provisions which may not be given high importance by the taxpayers. Thus, it is time to update ourselves with the upcoming changes and notifications.
This content is meant for information only and should not be considered as an advice or legal opinion, or otherwise. AKGVG & Associates does not intend to advertise its services through this.
CA Tarun Kapoor
AKGVG & Associates