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February 1, 2021

No GST Audit and 15 GST Changes in Budget 2021

by Rubina Dsouza in Budget, GST

No GST Audit and 15 GST Changes in Budget 2021

Introduction

Finance Minister Nirmala Sitharaman delivered the  paperless budget 2021 on a Tablet the first of its kind on 1st Feb 2021 at 11am. Six Pillared Budget is the view of Budget 2021, Covered in Part A  which included, Pillar 1: Healthcare Infra Bui Health and wellbeing  as the priority for which 137% increase in outlay for health sector i.e. Rs 2.23L Cr,  is proposed. Followed by its 2nd pillar stating Infrastructure. The 3rd Pillar is dedicated for the Inclusive development including Farmers and Agricultural Sector. The 4th pillar is Development of human capital. 5th pillar for Budget 2021  is for Research and development. The 6th and last pillar being “Minimum Government Maximum Governance”. 

Whereas Part B consisted of Changes in Direct and Indirect taxes in this article we will focus on changes relevant to GST carried out in the Finance Bill.

GST amendments in budget 2021 are as under

  1. One major change in GST in the Finance Bill 2021 is No GST Audit is required. Clause 101 of Finance bill states Sub-section (5) of section 35 of the CGST Act is being omitted so as to remove the mandatory requirement of getting annual accounts audited and reconciliation statement submitted by specified professional.

2. Further, in Clause 102 of Finance bill Section 44 of the CGST Act is being substituted so as to remove the mandatory requirement of furnishing a reconciliation statement duly audited by specified professional and to provide for filing of the annual return on self-certification basis. It also provides for the Commissioner to exempt a class of taxpayers from the requirement of filing the annual return.

3. Clause 99 of Finance Bill provides an additional new clause (aa) in sub-section (1) of Section 7 of the CGST Act which is being inserted, retrospectively with effect from the 1st July, 2017, so as to ensure levy of tax on activities or transactions involving supply of goods or services by any person, other than an individual, to its members or constituents or vice-versa, for cash, deferred payment or other valuable consideration.

4. Consequent to the amendment in section 7 of the CGST Act paragraph 7 of Schedule II to the CGST Act is being omitted retrospectively, with effect from the 1st July, 2017 under clause 113 of the Finance Bill.

5. Section 50 of the CGST Act is being amended under clause 130 of the finance bill. It is amended retrospectively, to substitute the proviso to sub section (1) so as to charge interest on net cash liability with effect from the 1st July, 2017.

6. Clause 100 of Finance bill introduces a new clause (aa) to sub-section (2) of the section 16 of the CGST Act to provide that input tax credit on invoice or debit note may be availed only when the details of such invoice or debit note have 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.

7. An explanation to sub-section (12) of section 75 of the CGST Act is being inserted under clause 105 of the finance bill to clarify that “self-assessed tax” shall include the tax payable in respect of outward supplies, the details of which have been furnished under section 37, but not included in the return furnished under section 39.

8. Section 83 of the CGST Act is being amended so as to provide that provisional attachment shall remain valid for the entire period starting from the initiation of any proceeding under Chapter XII, Chapter XIV or Chapter XV till the expiry of a period of one year from the date of order made thereunder as stated in clause 106.

9. Clause 104 of finance bill provides amendment in Section 74 of the CGST Act so as make seizure and confiscation of goods and conveyances in transit a separate proceeding from recovery of tax.

10. A proviso to sub-section (6) of section 107 of the CGST Act is being inserted under clause 107 to provide that no appeal shall be filed against an order made under sub-section (3) of section 129, unless a sum equal to 25% of penalty has been paid by the appellant.

11. Clause 111 of finance bill amends Section 168 of the CGST Act ito enable the jurisdictional commissioner to exercise powers under section 151 to call for information.

12. Section 129 of the CGST Act under Clause 108 of finance bill is being amended to delink the proceedings under that section relating to detention, seizure and release of goods and conveyances in transit, from the proceedings under section 130 relating to confiscation of goods or conveyances and levy of penalty.

13. Clause 109 of amends Section 130 of the CGST Act to delink the
proceedings under that section relating to confiscation of goods
or conveyances and levy of penalty from the proceedings under
section 129 relating to detention, seizure and release of goods
and conveyances in transit.

14. Section 151 of the CGST Act is being substituted to empower the jurisdictional commissioner to call for information from any person relating to any matter dealt with in connection with the Act as mentioned in Clause 110 of the Finance Bill.

15. Section 152 of the CGST Act under Clause 111 of Finance Bill is being amended so as to provide that no information obtained under sections 150 and 151 shall be used for the purposes of any proceedings under the Act without giving an opportunity of being heard to the person concerned.

16.  Further there is one more amendment even in the IGST tax under Section 16 which is being amended under Clause 114 so as to

a. zero rate the supply of goods or services to a Special
Economic Zone developer or a Special Economic Zone unit
only when the said supply is for authorised operations;

b. restrict the zero-rated supply on payment of integrated tax
only to a notified class of taxpayers or notified supplies of
goods or services; and

c. link the foreign exchange remittance in case of export of
goods with refund.

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