Taxpoint: Analysis of CGST (Fourteenth Amendment) Rules 2020

Analysis of CGST (Fourteenth Amendment) Rules 2020

GST Registration

Every application for GST registration shall be followed by Aadhar based authentication or biometric and KYC documents verification unless the applicant is exempted under Section 25(6D). (Amendment in Rule 8)
The period for grant of registration has been increased to 7 working days. In case a person does not undergo Aadhar based authentication or where the proper officer deems fit, registration shall be granted within 30 days after physical verification of place of business. (Amendment in Rule 9)
Registration may be canceled: (Amendment in Rule 21)
- if ITC is availed in violation of Section 16, or
- if the value of outward supplies furnished in GSTR-1 exceeds the value declared in GSTR-3B, or
- on violation of Rule 86B (inserted with effect from January 2021).
Registration can be suspended without affording an opportunity of being heard if the proper officer has reasons to believe that that the registration of a person is liable to be canceled under Section 29 or Rule 21. (Amendment in Rule 21A)
- In case of significant differences or anomalies indicating contravention of the provisions leading to the cancellation of registration, the registration shall be suspended under clause (2A) of Rule 21A and the person shall be given 30 days to explain the cause of differences.
- Clause (3A) has been inserted in Rule 21A to restrict the refund on unutilized ITC on account of zero-rated supplies without payment of tax or inverted duty structure under Section 54 during the period of suspension of registration.

ITC (Input Tax Credit) Restriction under Rule 36(4)

ITC under Rule 36(4) shall be restricted to an additional 5 percent of eligible credits with effect from January 2021 (down from the earlier limit of 10 percent) in respect of invoices or debit notes not furnished by the suppliers.

Restriction on Filing GSTR-1

Rule 59 has been amended to restrict the filing of GSTR-1 if GSTR-3B of two preceding months (preceding tax period for quarterly returns) has not been furnished
The person restricted from using the amount available in electronic credit ledger to discharge liability towards tax in excess of 99 percent of the liability under rule 86B shall also be restricted from filing GSTR-1 till GSTR-3B for the preceding period has been furnished. [Newly inserted rule 86B has been discussed further.]

Rule 86B [Restriction on use of ITC in Input Tax Credit Ledger

As per rule 86B, at least 1 percent of the tax liability will have to be discharged in cash where the value of taxable supply (other than exempt and zero-rated supplies) exceeds Rs. 50 lakh in a month.

The restriction shall not apply in the following cases:

a.Taxpayer has paid Income Tax exceeding ₹1 lakh in two preceding financial years.

b.Taxpayer has received a refund under Section 54 exceeding ₹1 lakh in the preceding financial year.

c.Taxpayer has paid outward tax liability in cash which cumulatively exceeds 1 per cent of total tax liability for the financial year till date. The restrictions shall not apply to the following categories of taxable person:

Government department,
Public Sector undertaking,
Local authority,
Statutory body

Eway Bill

The period of validity of e-way bills under Rule 138 has been amended (with effect from January 2021) and e-way bill generation shall be restricted under Rule 138E during the period of suspension of registration under Rule 21A.

क्या हम GST Rule 86B को सही Interpret कर रहे हैं?