Budget 2022 – Indirect Tax Changes

Budget 2022 has brought the following important changes in indirect tax:

1. Goods and Services Tax (GST)

• ITC can be availed only if it is not prohibited under section 38 – as per the details disclosed to the buyer in GSTR-2B.
• The deadline for availing ITC under section 16(4) has been extended from September 30 next year to November 30.
• The registration of a Composition Tax Payer can be automatically canceled if he has not filed his return for more than 3 months from the due date.
• Credit notes in respect of supplies made in one financial year can be issued up to 30th November of the next financial year. This has been extended as it was currently allowed till 30 September.
• The GST outward supply procedure is to be amended and accordingly section 38 of the CGST Act be substituted for prescribing the conditions and restrictions for communication of details of inward supplies and input tax credit to the recipient through an auto-generated statement. Used to be. and eliminating the two-way communication process in return filing.
• Correction of error in GSTR-1/GSTR-3B is allowed till November of the next financial year. This has been extended from 30 September for the time being.
• The due date for filing return by a non-resident taxable person is determined as the 13th day of the following month or within seven days of the last day of the period of registration, whichever is earlier.
• Section 41 of the CGST Act is being replaced so as to do away with the concept of availing ITC on provisional basis.
• Section 42, 43 and 43A of CGST have been amended to eliminate the two-way communication process in return filing.
• Amendment is being made in section 47 of the CGST Act for recovery of late fee for delay in TCS return and for the same.
• Section 49 of the CGST Act is being amended:

1. To provide restrictions for the utilization of the amount available in the electronic credit ledger
2. To allow transfer of amount available in electronic cash ledger under CGST Act of a registered person to electronic cash ledger under the said Act or IGST Act of a specified person.
3. To provide for determining the maximum proportion of output tax liability which can be discharged through electronic credit ledger.

• If ITC is not utilised, interest will not be charged and section 50(3) of the CGST Act is being substituted for the same with retrospective effect from 01.07.2017.
• Refund claim is available for any balance lying in the Electronic Cash Ledger under section 54.
• The rate of interest under section 50(3) has been fixed at 18% in all cases.
• Retrospective exemption from central tax in respect of supply of unintended waste generated during production of fish meal, excluding fish oil, during the period from 1st July 2017 to 30th day of September 2019 (both days inclusive). No refund will be made for the said tax which has already been collected.

2. special economic zone

The Customs Administration will be fully IT driven in the SEZ and will function on the Customs National Portal with high convenience focus and only risk-based investigation. 30 it. will be implemented till^th September 2022; Which in turn will support ease of doing business in India.

3. Project Imports and Capital Goods

It is proposed to phase out concessional rates in capital goods and project imports and introduce a moderate tariff of 7.5 per cent. Certain exemptions for advanced types of machinery which are not manufactured within the country will continue to ensure that growth and development are not used in any way.

4. gems and jewelery

To give a boost to the gems and jewelery sector, the customs duty on cut and polished diamonds and gems has been reduced to 5 per cent. Zero customs duty rates will be applicable only on plain diamonds. Also, a simplified regulatory framework will be implemented by June this year to facilitate export of jewelery through e-commerce. In addition, a customs duty of at least Rs 400 per kg will be required to be paid on import of counterfeit jewellery.

5. chemicals
   Customs duty is being reduced on some important chemicals like methanol, acetic acid and heavy feedstock for petroleum refining. Duty on sodium cyanide is being increased.

6. Review of Customs Rebate and Tariff Simplification

Many concessional rates are being included in the Customs Tariff Schedule itself instead of being prescribed through various notifications. This comprehensive review will simplify the customs rate and tariff structure and reduce disputes, especially for sectors such as chemicals, textiles and metals.

7. MSME

Duty on umbrellas is being increased to 20 percent. Exemptions are being withdrawn from certain parts of umbrellas. To give relief to MSME secondary steel producers, the customs duty exemption granted to steel scrap last year is being extended for one more year.

8. export

To encourage exports, exemptions are provided on certain items such as trimmings, lining materials, furniture fittings, specified leather and packaging boxes. In addition, duty is being reduced on certain inputs required for shrimp aquaculture to boost its exports.

9. customs

• Section 3 of the Customs Act is substituted so as to specify classes of customs officers, including officers of the Directorate of Revenue Intelligence, officers of Customs (Preventive) and audit officers for various purposes, as Board may specify.
• Section 28H of the Customs Act has been amended to also prescribe the fee for application for advance adjudication and to provide that an applicant for an advance adjudication may at any time before the adjudication of his application can take back.
• Section 28J(2) of the Customs Act is substituted to provide that the advance ruling shall be for a period of three years or till there is a change in the law or facts on the basis of which the advance ruling has been passed, whichever is , will remain valid. east. The said period of three years shall be reckoned from the date on which the said Finance Bill receives the assent of the President.
• New section 135AA has been inserted in the Customs Act, so that publication of information relating to the value or classification or quantity of goods entered into for export from India, or import into India, or the details of the exporter or importer of such can be made. goods, unless required to do so under any law.

Need more on taxes?

let’s know info@taxreturnwala.com