Severe changes in GST rules via CGST fourteenth amendment rules 2020

CGST fourteenth amendment rules 2020

These are CGST fourteenth amendment rules 2020. A lot has been amended via these rules Registration procedure and the input tax credit is made strictier. More conditions are imposed to get registration. The limit of ITC is also reduced to 5% only.

Registration

In the case of the registration rule, 8(4A) is substituted with the following provision.

Earlier Rule 8(4A)

[(4A)The applicant shall, while submitting an application under sub-rule (4), with effect from 01.04.2020, undergo authentication of Aadhaar number for grant of registration.] 

Amended rule 8(4A)

―(4A)Every application made under rule (4) shall be followed by—

(a) biometric-based Aadhaar authentication and taking photograph, unless exempted under subsection (6D) of section 25, if he has opted for authentication of Aadhaar number; or

(b) taking biometric information, photograph and verification of such other KYC documents, as notified, unless the applicant is exempted under sub-section (6D) of section 25, if he has opted not to get Aadhaar authentication done,

of the applicant where the applicant is an individual or of such individuals in relation to the applicant as notified under sub-section (6C) of section 25 where the applicant is not an individual, along with the verification of the original copy of the documents uploaded with the application in FORM GST REG-01 at one of the Facilitation Centres notified by the Commissioner for the purpose of this sub-rule and the application shall be deemed to be complete only after completion of the process laid down under this subrule.‖.

Summary-

Now the taxpayer will have the following two options-

1. Get Aadhar verified with the photograph
2. Get his documents and other details verified at the GST facilitation center

Only then a registration application will be deemed to be complete.

Please take note that these provisions will be applicable from the notified date.

In the said rules, in rule 9

Now 7 days time is given to the officer to make a reply to the registration application. Earlier it was 3 days only. In case of deficiency also, the proper officer can make a reply in 7 days in place of 3 days.

Deemed registration under Rule 9(c )

If the proper officer fails to take any action, –

(a) within a period of seven working days from the date of submission of the application in cases where the person is not covered under proviso to sub-rule (1); or

(b) within a period of thirty days from the date of submission of the application in cases where a person is covered under proviso to sub-rule (1); or

(c) within a period of seven working days from the date of the receipt of the clarification, information or documents furnished by the applicant under sub-rule (2), the application for grant of registration shall be deemed to have been approved.

Input tax credit

Changes in rule 36(4)

Now the limit to take ITC is reduced from 10% to 5%. There was a limit to claim ITC in GSTR 3b. The limit was auto-populated ITC +10%. But now even that limit is changed. You can take only 5% extra of what is auto-populated.

New rule 86B- Restriction on use of ITC

Provided that the said restriction shall not apply where –

(a) the said person or the proprietor or karta or the managing director or any of its two partners, whole-time Directors, Members of Managing Committee of Associations or Board of Trustees, as the case may be, have paid more than one lakh rupees as income tax under the Income-tax Act, 1961(43 of 1961) in each of the last two financial years for which the time limit to file return of income under subsection (1) of section 139 of the said Act has expired; or

(b) the registered person has received a refund amount of more than one lakh rupees in the preceding financial year on account of unutilised input tax credit under clause (i) of first proviso of subsection (3) of section 54; or

(c) the registered person has received a refund amount of more than one lakh rupees in the preceding financial year on account of unutilised input tax credit under clause (ii) of first proviso of subsection (3) of section 54; or

(d) the registered person has discharged his liability towards output tax through the electronic cash ledger for an amount which is in excess of 1% of the total output tax liability, applied cumulatively, upto the said month in the current financial year; or

(e) the registered person is –

(i) Government Department; or

(ii) a Public Sector Undertaking; or

(iii) a local authority;or

(iv) a statutory body: Provided further that the Commissioner or an officer authorised by him in this behalf may remove the said restriction after such verifications and such safeguards as he may deem fit.

Returns

Restriction on GSTR 1 if GSTR 3b is not filed.

(a) a registered person shall not be allowed to furnish the details of outward supplies of goods or services or both under section 37 in FORM GSTR-1, if he has not furnished the return in FORM GSTR-3B for preceding two months;

(b) a registered person, required to furnish return for every quarter under the proviso to sub-section (1) of section 39, shall not be allowed to furnish the details of outward supplies of goods or services or both under section 37 in FORM GSTR-1 or using the invoice furnishing facility, if he has not furnished the return in FORM GSTR-3B for preceding tax period;

(c) a registered person, who is restricted from using the amount available in electronic credit ledger to discharge his liability towards tax in excess of ninety-nine per cent. of such tax liability under rule 86B, shall not be allowed to furnish the details of outward supplies of goods or services or both under section 37 in FORM GSTR-1 or using the invoice furnishing facility, if he has not furnished the return in FORM GSTR-3B for preceding tax period.‖.

Download Original copy of CGST fourteenth amendment rules 2020

CGST (14th Amendment) Rules 22122020