Textile GST rate increase deferred; GoM to review inversion, report by February 2022, refunds debate ongoing.
The Council deferred the scheduled increase of GST on textiles from 5% to 12% (effective 1.1.2022) after representations highlighting adverse impacts on MSMEs, employment, handloom and natural fibre segments and fiscal concerns tied to cessation of compensation cess. The Fitment Committee and inter ministerial inputs had recommended correction of the inverted duty structure by aligning rates across fibre, yarn and fabric; Members asked for more data, stakeholder consultation and consideration of differentiated measures. The Group of Ministers on Rate Rationalization was tasked to report by late February/early March 2022.

Refund mechanism for pre-merger ITC claims: taxpayers may file from new GSTIN under 'Any other' to enable refund processing.
Taxpayers of the erstwhile UT of Daman & Diu who cannot file refunds for pre-merger periods due to GSTIN migration must file on the GST portal under the "Any other" category using the new GSTIN, state the intended refund category in Remarks, and attach supporting documents. No electronic credit ledger debit is required on filing. The proper officer will compute admissible refund, may request a FORM GST DRC-03 debit, and upon receipt of proof will issue FORM GST RFD-06 and FORM GST RFD-05. Refunds requiring debit or re-credit must not be filed using the old GSTIN.

GST liability on restaurant services through e-commerce operators shifts tax payment to the operator, changing TCS and ITC treatment.
ECOs are liable to pay GST on restaurant service supplied through their platforms and will not collect TCS or file GSTR-8 for those services; TCS continues for other non-notified supplies. No separate registration is required for ECOs already registered. ECOs must pay GST on services supplied through them even if the supplier is unregistered, and such supplies count towards the supplier's aggregate turnover. The ECO issues the invoice for restaurant services, may continue to claim ITC on its inputs, but cannot use ITC to discharge GST on restaurant services and must pay that GST in cash. Reporting may be done in GSTR-3B and relevant GSTR-1 tables.

Refund of excess electronic cash ledger clarified: time limits and unjust enrichment rules do not apply, TDS/TCS balances refundable.
The Board clarifies that the time limit in section 54(1) does not apply to refunds of excess balances in the electronic cash ledger and that Rule 89(2)(l)/(m) certifications are unnecessary as unjust enrichment does not apply. TDS/TCS amounts credited to the electronic cash ledger are equivalent to cash deposits and unutilized balances may be refunded under the proviso to section 54(1) read with section 49(6). For deemed exports, the relevant date for refund is the date of filing of the supplier's return.

Dynamic QR code exemption: invoices to nonresident service recipients with in India place of supply may omit QR when paid via RBI approved modes.
Where an invoice is issued to a recipient located outside India for services whose place of supply is in India, and payment is received by the supplier in convertible foreign exchange or in Indian rupees wherever permitted by the RBI, such invoice may be issued without a Dynamic QR Code; the entry at S. No. 4 of Circular No. 156/12/2021 GST is substituted and modified accordingly.

Disallowing debit of electronic credit ledger restricts use of suspect input tax credit pending objective verification and restoration.
Rule 86A authorises a Commissioner or an authorised officer to disallow debit of amounts from the electronic credit ledger where there are reasons to believe input tax credit has been fraudulently availed or is ineligible based on specified grounds (non existent suppliers, non receipt of goods or services, unpaid tax, claimant non existence, or absence of prescribed documents). The officer must record reasons in writing, ensure the withheld amount does not exceed the prima facie ineligible credit, notify the registered person on the portal, and may later restore debit if satisfied that disallowance conditions no longer exist; restrictions lapse after one year.

GST classification rules: cloud kitchens 5% restaurant service; ice cream parlors and alcohol job work taxed at standard rates.
Clarifies GST treatment for specified services: cloud/central kitchens are restaurant service at 5% without ITC; ice cream parlors selling manufactured ice cream are supplies of goods at 18%; government funded coaching under the Disabilities Scholarships scheme is exempt; NSIL satellite launches to non residents are export of service and zero rated; overloading charges at toll plazas receive toll treatment; "giving on hire" includes renting to STUs and local authorities for exemption; grant of mining rights classified under service code 997337 and taxable at 18% for 1.7.2017-31.12.2018; amusement park admissions and distinctions with casinos/sporting events clarified; job work for alcoholic liquor attracts 18%, not 5%.

GST classification clarifications confirm distinct tax treatment for fresh versus processed produce and reclassify several commodity entries.
Circular clarifies GST classification and applicable rates for specific goods: fresh fruits and nuts remain exempt while frozen or intentionally dried variants are taxable; tamarind seeds are classifiable as seeds under heading 1209 with concessional treatment only when not for sowing; copra is excluded from coconut exemption and attracts the concessional rate; pure henna and mehndi paste are covered under tariff item 1404 and specified entries; brewers' spent grains and similar residues fall under heading 2303; all goods under heading 3006 and heading 3822 attract the rates provided in their respective entries. Administrative clarifications include acceptance of original DGH Essentiality Certificates for inter state stock transfers and separate taxation where UPS and external batteries are invoiced individually.

Revocation of GST Registration: Special drive to expedite processing of pending applications and provide grievance redressal contacts.
Ahmedabad CGST Zone has initiated a focused administrative drive to expedite disposal of pending FORM REG-21 applications for revocation of cancelled GST registrations; jurisdictional Commissionerates must process pending applications on merits, communicate any deficiencies and a specific completion timeline to applicants, and follow the SOP and applicable law. Applicants may approach their CGST Division during the drive for status and deficiency information, and may escalate to designated Commissionerate-wise nodal officers and the Zonal Nodal Officer if grievances are not redressed.

Refund for wrongly classified intra State or inter State supplies: claim after correcting tax head and filing within prescribed period.
Clarification states that "subsequently held" covers taxpayer initiated and authority initiated reclassification of supplies; refund is available if the taxpayer pays tax under the correct head and files FORM GST RFD 01 within two years from payment under the correct head, with transitional rule providing a two year window from the sub rule's commencement for earlier correct head payments; refunds are barred where liability was adjusted by issuance of a credit note.

GST system reforms: ministerial group to recommend IT-based checks and data-driven measures to curb evasion and boost compliance.
Constitution of a Group of Ministers on GST System Reforms to consolidate earlier GoMs and guide IT-driven measures. The GoM will review IT tools and officer interfaces, recommend business-process and IT changes to improve efficiency, identify and plug revenue leakage, promote data analysis for compliance and revenue augmentation, propose mechanisms for central-state and inter-state tax administration coordination, suggest implementation timelines, submit recommendations to the Council periodically, and monitor implementation with GSTN providing secretarial support.

Proviso reference correction: Circular amended to read 'second proviso' instead of 'first proviso' in table entry.
In Circular No.160/16/2021 GST, in the opening paragraph's table against S. No. 3, all instances of 'first proviso' shall be read as 'second proviso', effecting a textual substitution of the proviso reference in that table entry as an administrative correction.

Time-bound issuance of show-cause notices required to protect limitation periods and ensure timely adjudication in GST investigations.
SCNs in GST evasion and fraudulent input tax credit matters must be issued sufficiently before statutory limitation cut-offs so orders can be completed within the three year or five year limitation periods tied to annual return filing; supervisory authorities must review pending investigations, prioritise issuance of SCNs, adopt action plans (avoiding investigations beyond one year) and ensure timely adjudication to protect limitation windows and adjudicatory quality.

Export of services: supplies from an Indian incorporated group company to foreign parent establishments may qualify as export.
Clause (v) excludes supplies between establishments of the same person treated as distinct under Explanation 1 to section 8; branches, agencies or representational offices are establishments per Explanation 2. A company incorporated in India and a foreign company incorporated outside India are separate persons. Therefore, services supplied by an Indian incorporated subsidiary/sister/group company to establishments of its foreign parent outside India are not barred by condition (v) and may qualify as export of services, subject to the other statutory export conditions.

Input tax credit timing clarified: debit note date determines relevant financial year and governs ITC availment.
The circular clarifies that the date of issuance of a debit note determines the financial year for claiming input tax credit, and the amended timing rule governs ITC availment for claims made on or after the amendment's effective date; e invoices may be verified by electronic production of the QR code with the Invoice Reference Number instead of a physical invoice during movement; and the refund prohibition on unutilized ITC applies only to exports actually subjected to export duty, excluding goods with nil or exempt export duty.

Intermediary services defined as facilitation between multiple parties; intermediary status depends on ancillary role and absence of principal supply.
Clarification defines intermediary as a person who arranges or facilitates a supply between other persons and does not supply the main goods, services or securities on his own account. Intermediary services require more-than-two parties, consist of two distinct supplies (main supply and ancillary facilitation), and exclude subcontractors or persons supplying the main service on a principal-to-principal basis. Place-of-supply rules for intermediary services under section 13 of the IGST Act apply only when either the supplier or recipient is located outside India.

Aadhaar authentication: mandatory for refund and revocation eligibility, alongside tighter ITC and e portal controls to curb fraud.
The Council approved Law Committee recommendations to require Aadhaar authentication for specific existing registrations (refund and revocation eligibility), designate www.gst.gov.in as the Common GST Electronic Portal retrospectively, tighten ITC availment by aligning claims with portal data (GSTR-2B and amended rule 36(4)), enforce sequential filing and auto-population of late fees for GSTR-1 via GSTR-3B, permit conditional transfer of CGST/IGST cash ledger balances between distinct persons, clarify interest applicability on ineligible ITC availed and utilised with retrospective effect, and adopt multiple refund, filing-frequency and fitment measures while deferring wide restriction of the IGST refund route to avoid exporter disruption.

GST offence reporting clarified by fixing the date of detection as the Incident Report date for DIGIT Module entries.
Centralised GST offence reporting in the DIGIT Module is clarified by treating the date of detection as the date of issuance of the Incident Report. The Incident Report should generally be issued within five working days of a search or visit, and in summons- or letter-based enquiries, when a prima facie case of evasion of tax or duty is reached. For audit-based detection, the date of the minutes of the Audit Monitoring Committee meeting is to be treated as the date of detection.

Extension of time for revocation of cancelled GST registration allows filing and reconsideration during the extended period.
The Circular clarifies that Notification No. 34/2021 extends the due date for filing applications for revocation of cancellation of registration to 30 September 2021 for cases whose original due date fell between 1 March 2020 and 31 August 2021, applies to cancellations under clause (b) or (c), covers unfiled, pending, rejected and appealed matters, and explains interaction with administrative proviso extensions by Additional/Joint Commissioners and Commissioners.

Information sharing protocol requires timely, complete reporting to CEIB across investigation stages and economic offence cases.
Timely and complete sharing of information with the Central Economic Intelligence Bureau is required under the Information Sharing Protocol, with stage-wise timelines for transmission of case data. All formations are to designate a nodal officer and share specified offence details, including identity particulars, relevant statute, date of action, seizure details and modus operandi. Information is to be shared even where an order is public, and inter-agency ramifications must also be communicated. The annexed schedule covers reporting at stages such as seizure, show cause notice, order-in-original, prosecution, adjudication and related enforcement action.