LATEST CHANGES IN GST LAWS

Introduction

The Central Goods and Services Tax Act, 2017 and Central Goods and Services Tax Rules, 2017 has some changes with effect from 01.08.2021.  Sections 110 and 111 of the Finance Act, 2021 has been given effect from 01.08.2021.  The Central Government brings amendment to the Central Goods and Services Tax Rules, 2021 which will come into effect from 01.08.2021.

Finance Act, 2021

Section 110 of the Finance Act, 2021 omits sub section (5) of section 35 of Central Goods and Services Tax Act, 2017.  The said amendment is declared to take effect from 01.08.2021 vide Notification No. 29/2021-Central Tax, dated 30.07.2021.  The amendment dispensed with the audit and filing reconciliation certificate.  Section 35(5) of the Act, before omission provided that every registered person whose turnover during a financial year exceeds the prescribed limit shall get his accounts audited by a chartered accountant or a cost accountant and shall submit a copy of the audited annual accounts, the reconciliation statement under sub-section (2) of section 44 and such other documents in such form and manner as may be prescribed.   Nothing contained in this sub-section shall apply to any department of the Central Government or a State Government or a local authority, whose books of account are subject to audit by the Comptroller and Auditor-General of India or an auditor appointed for auditing the accounts of local authorities under any law for the time being in force.

Section 111 of the Finance Act, 2021 substitutes the existing section 44 dealing with the Annual return.  This amendment is declared to take effect from 01.08.2021 vide Notification No. 29/2021-Central Tax, dated 30.07.2021. 

The newly substituted section 44 provides that every registered person, other than an Input Service Distributor, a person paying tax under section 51 or section 52, a casual taxable person and a non-resident taxable person shall furnish an annual return which may include a self-certified reconciliation statement, reconciling the value of supplies declared in the return furnished for the financial year, with the audited annual financial statement for every financial year electronically, within such time and in such form and in such manner as may be prescribed. 

The Commissioner may, on the recommendations of the Council, by notification, exempt any class of registered persons from filing annual return under this section.

Nothing contained in this section shall apply to any department of the Central Government or a State Government or a local authority, whose books of account are subject to audit by the Comptroller and Auditor-General of India or an auditor appointed for auditing the accounts of local authorities under any law for the time being in force.

Amendment in Rules

The Government, vide Notification No.30/2021, dated 30.07.2021, amended Central Goods and Services Tax Rules, 2017.  These amendments will come into effect from 01.08.2021.

Annual Return

Rule 2 substituted a new Rule for Rule 80.  The newly substituted Rule 80 provides the Annual return shall be filed as detailed below-

• Every registered person, other than those-

• referred to in the second proviso to section 44;
• an Input Service Distributor;
• a person paying tax under section 51 or section 52;
• a casual taxable person; and 
• a non-resident taxable person, 

 shall furnish an annual return for every financial year in Form GSTR-9 on or before the thirty-first day of December following the end of such financial year;

• A person paying tax under section 10 shall furnish the annual return in Form GSTR-9A;
• Every electronic commerce operator required to collect tax at source under section 52 shall furnish annual statement referred to in sub-section (5) of the said section in Form GSTR -9B.
• Every registered person, other than those referred to in the second proviso to section 44, an Input Service Distributor, a person paying tax under section 51 or section 52, a casual taxable person and a non resident taxable person, whose aggregate turnover during a financial year exceeds ₹ 5 crores, shall also furnish a self-certified reconciliation statement as specified under section 44 in Form GSTR-9C along with the annual return on or before the thirty-first day of December following the end of such financial year.

Form GSTR – 9

The amendment brings changes in Form GSTR – 9, in the instructions-

• Paragraph – 4;
• Paragraph – 5;
• Paragraph – 7;
• Paragraph – 8.

Form GSTR – 9C

The amendment also brings changes in Form GSTR – 9C – in Part A and omitted Part B of the said form.

Exemption from filing Annual return

Vide Notification No. 31/2021-Central Tax, dated 30.07.2021 the Central Government exempted the registered person whose aggregate turnover in the financial year 2020-21 is up to ₹ 2 crore, from filing annual return for the said financial year.  The said notification comes into effect from 01.08.2021.

Conclusion

The changes brought in GST laws give relief to the registered persons from the obligations of tax audit and filing the reconciliation statement and also gives exemption to the registered persons whose aggregate turnover in FY 2020-2021 is up to ₹ 2 crore from filing the Annual return for 2020-2021.