Simplified Explanation of Amendments in Central Goods and Services Tax Rules, 2022

Overview:

The Central Goods and Services Tax (Third Amendment) Rules, 2022, bring several changes to the GST rules, impacting various forms and procedures. These changes streamline and update the filing and reporting requirements for taxpayers. Below is a simplified explanation of these amendments.

1. Amendments in Rule 21:

New Clauses Added:

• (h) If a registered person does not file returns for six consecutive months (monthly filers).
• (i) If a registered person does not file returns for two consecutive quarters (quarterly filers).

Example:
A business that files monthly GST returns and fails to submit returns from April to September will be flagged under clause (h).

2. Changes in Rule 36:

• (a) Removes the requirement to provide details from documents in FORM GSTR-2.
• (b) Adds a requirement to specify the input tax credit details in FORM GSTR-3B.

Example:
Previously, details from purchase invoices had to be reported in FORM GSTR-2, but now, this requirement is removed, and the details will directly reflect in FORM GSTR-3B.

3. Updates in Rule 37:

• (a) New sub-rules on input tax credit:
  • (1) If input tax credit is claimed but not paid to the supplier within 180 days, it must be reversed and paid along with interest.
  • (2) If the payment is later made to the supplier, the credit can be re-claimed.

Example:
A business claims input credit in January but pays the supplier in June. The credit must be reversed if not paid within 180 days and can be reclaimed upon payment.

• (b) Old sub-rule (3) is removed.

4. Changes in Rule 38:

• (a) Removal of the requirement to furnish details in FORM GSTR-2.
• (b) The balance input tax credit should now be reversed in FORM GSTR-3B, not FORM GSTR-2.
• (c) Old clause (d) is removed.

Example:
Businesses now need to adjust the credit balance in FORM GSTR-3B, not in FORM GSTR-2.

5. Revision in Rule 42:

• (a) Omits details required to be reported at the invoice level in FORM GSTR-2.

Example:
The requirement to report specific details for input tax credit at the invoice level in FORM GSTR-2 has been removed.

6. Updates in Rule 43:

• (a) Removes references to FORM GSTR-2.

Example:
References to FORM GSTR-2 in the reporting process are now omitted.

7. Revision in Rule 60:

• (a) Replaces “auto-drafted” with “auto-generated”.

Example:
The term describing automatically created data in the system is updated from “auto-drafted” to “auto-generated”.

8. Removal of Rules:

• (a) Rules 69 to 79 are removed.

Example:
Several procedural rules have been eliminated as part of this amendment.

9. Changes in Rule 83:

• (a) Removes “and inward” from clause (a).

Example:
The reference to “inward” is removed, likely affecting how inward supplies are reported.

10. Updates in Rule 85:

• (a) Updates clause (b) to include “or”.
• (b) Removes clause (c).

Example:
Clause (b) is updated for clarity, and clause (c) is removed.

11. Modifications in Rule 89:

• (a) Adds provisions for claiming a refund of any balance in the electronic cash ledger.
• (b) Omits the first proviso.
• (c) Updates the second and third provisos.

Example:
Refund claims can now include any balance in the electronic cash ledger, with changes in proviso conditions.

12. Revision in Rule 96:

• (a) Substitutes “FORM GSTR-3 or FORM GSTR-3B” with “FORM GSTR-3B”.

Example:
All references to FORM GSTR-3 are replaced with FORM GSTR-3B.

13. Removal of Forms:

• (a) Omission of FORM GSTR-1A, FORM GSTR-2, and FORM GSTR-3.

Example:
These forms are now obsolete and no longer used for GST reporting.

14. Changes in FORM GST PCT-05:

• (a) Omits “and inward” from the list of activities.

Example:
The form will no longer list “and inward” in the activities section.