Input-tax credit reconciliation: limits excess ITC claims under rule 36 for specified 2019-2021 periods.
Clarification resolves ITC mismatches between Form GSTR-3B and Form GSTR-2A for April 1, 2019 to December 31, 2021 by applying Circular No.183/15 procedures where rule 36 was not in force, and by enforcing rule 36 ceilings and the payment-by-supplier condition for periods when rule 36 applied; cumulative adjustment provisions for specified month-blocks must be observed, certificates required under the prior circular remain necessary for admitted excess up to the rule specified cap, and from January 1, 2022 ITC is admissible only if reported by suppliers and communicated in the purchaser's automated statement.

Interest on wrongly availed IGST credit hinges on the total ITC pool, not the IGST head alone.
For interest calculations on wrongly availed IGST credit, the combined input-tax credit balance across IGST, CGST and SGST heads must be considered. If the combined ITC balance never falls below the wrongly availed amount between availment and reversal, no interest is attracted; if it does fall below, the shortfall equals the extent of utilisation and attracts interest. Compensation cess credit is excluded from this computation because it may only be used for compensation cess liabilities.

Reference Number requirement: communications must quote an RFN or be invalid; limited exceptions and post facto regularization allowed.
Officers must quote a computer generated Reference Number (RFN) on all communications to taxpayers under the Model 2 back office; RFNs are generated via the officer login and verifiable by taxpayers. Limited exceptions allow issuance without an RFN for technical failures or urgent field situations if reasons are recorded and the message declares lack of RFN. Non exempt communications without an electronic RFN are invalid and deemed never issued. Exempt communications must be regularized within fifteen working days by obtaining post facto supervisory approval, generating the RFN, printing the pro forma with RFN, and filing it.

Taxability of securities: holding shares in a subsidiary is not a taxable GST supply absent a statutory supply requirement.
The CBIC clarifies that securities, including shares, are neither goods nor services; mere purchase, sale or holding of shares by a holding company does not constitute a taxable supply. A SAC classification alone does not create a service-GST applies only where the transaction satisfies the statutory definition of supply under section 7. Accordingly, holding shares of a subsidiary by the parent company per se is not a supply of services and is not taxable under GST; the circular is applied mutatis mutandis to the Maharashtra SGST framework and field formations are to publicize the position.

Input tax credit on warranty replacements not reversed where replacements or repairs are provided without additional consideration.
Replacements of parts and repair services provided during the warranty period without separate consideration are covered by the value of the original taxable supply and attract no additional GST; manufacturers are not required to reverse ITC for such warranty work. Distributors providing warranty services without charging customers do not incur GST, but inter-party transactions vary: taxable invoiced supplies from distributor to manufacturer permit ITC, manufacturer-supplied parts for warranty without consideration attract no GST and no ITC reversal, and credit-note adjustments require prior reversal of ITC by the distributor. Repair services charged by a distributor to a manufacturer are taxable and ITC-eligible. Extended warranty sold with original supply is part of the composite supply; if sold later it is a separate taxable supply.

TCS on e commerce transactions: supplier-side ECO collects unless supplier is an ECO, then buyer-side ECO collects.
Where multiple ECOs participate and the supplier-side ECO is not the supplier, the supplier-side ECO that ultimately releases payment to the supplier must collect TCS, deposit it to the government and perform related compliances; the buyer-side ECO that only forwards consideration after deducting its fees is not required to collect TCS for that supply. If the supplier-side ECO is itself the supplier, the buyer-side ECO that collects payment from the buyer must collect and remit TCS and complete applicable compliances.

Input Tax Credit reconciliation guidance limits excess ITC allowance and ties entitlement to supplier reported communication in returns.
Clarification directs uniform treatment of discrepancies between Input Tax Credit claimed in FORM GSTR 3B and that reflected in FORM GSTR 2A for 01.04.2019-31.12.2021, confirming the temporal caps on additional ITC where suppliers have not furnished outward details (20%, 10%, and 5% in successive periods), reiterating that availment remains subject to the condition that tax on the supply has been paid by the supplier, applying prior verification guidelines subject to those caps, and providing that from 01.01.2022 ITC is allowable only to the extent communicated in FORM GSTR 2B.

Interest on wrongly availed IGST credit depends on total input tax credit balance across tax heads, not IGST alone.
For interest calculation when IGST credit is wrongly availed and reversed, the total input tax credit balance across IGST, CGST and SGST in the electronic credit ledger must be considered to determine whether and to what extent the wrongly availed IGST was utilized; compensation cess credit is excluded from this aggregation as it is usable only for compensation cess liabilities.

Industrial license validity extended to fifteen years with a possible three year extension; automatic lapse if production not commenced.
The Press Note increases industrial licence initial validity to fifteen years with a possible discretionary three year extension, and provides that licences where commercial production has not commenced within the maximum aggregate period shall be treated as automatically lapsed. Extensions are to be processed by the Administrative Ministry/Explosive Section (DPIIT) and may be approved by the Additional Secretary/Joint Secretary without referral to the Licensing Committee, subject to conditions on timing, unchanged licence status, government comments, land tenure, completed construction, and installed plant and machinery; transfers, suspensions or cancellations bar extension.

Input tax credit distribution: HO may use ISD or invoice BOs, invoice value deemed open market value when recipient has full credit.
For services between distinct offices, the HO may either distribute ITC via the ISD mechanism (with mandatory ISD registration if used) or issue tax invoices to BOs so BOs can claim ITC; where a recipient BO is eligible for full ITC, the invoice value is deemed the open market value under rule 28 irrespective of included cost components, and a nil invoice may be so deemed; where the BO is not eligible for full ITC, HO employee salary need not be mandatorily included in taxable value.

E-invoicing requirement applies to supplies to government entities registered only for TDS when supplier exceeds threshold.
E-invoicing is mandatory for suppliers whose turnover exceeds the prescribed threshold when supplying to Government Departments, agencies, local authorities or PSUs that are registered solely for tax deduction at source; those government entities are to be treated as registered persons, and suppliers must issue e-invoices for such supplies under the applicable e-invoicing rule.

Refund of Input Tax Credit restricted to GSTR 2B availability; clarifies undertakings, turnover calculation and exporter refunds.
Refund of accumulated Input Tax Credit under section 54(3) is restricted to credit reflected and available in Form GSTR 2B for the relevant tax period or any prior period, effective January 2022; prior circulars referring to GSTR 2A/GSTR 1 are modified accordingly. The Form RFD 01 undertaking is amended to remove references to omitted provisions and forms, applicants must undertake repayment with interest if clause (c) of section 16(2) is not met. Export calculations for adjusted total turnover follow the Explanation in sub rule (4) of rule 89. Exporters who later effect export or realise payment may claim unutilised ITC and IGST (not interest).

Taxability of shareholdings: holding shares in a subsidiary is not a taxable supply absent a supply under GST.
Securities, including shares, are neither goods nor services under the KGST Act; mere holding, purchase or sale of subsidiary shares by a holding company is not a supply. A SAC entry for holding company services does not itself create a taxable supply-GST applies only if the holding company's activity qualifies as a supply under the statutory definition. Therefore passive holding of subsidiary share capital is not taxable under GST.

Input tax credit for warranty services - no GST on free warranty replacements; GST applies to separately charged repairs.
Where replacement parts or repair services are provided under a manufacturer's warranty without separate consideration, no additional GST is chargeable because the original supply's value includes expected warranty costs. The manufacturer is not required to reverse Input Tax Credit for such warranty replacements or repairs. Distributor scenarios vary: taxable invoiced supplies by distributors to manufacturers attract GST and permit ITC; manufacturer-supplied parts to distributors for warranty replacement without consideration are non-taxable in that transfer and require no ITC reversal; credit-note adjustments apply where distributors replace parts from earlier supplies subject to ITC reversal by the distributor. Repair services charged by a distributor to a manufacturer are taxable and eligible for ITC to the manufacturer. Extended warranty sold with original supply is part of the composite supply; sold later it is a separate taxable contract.

TCS collection responsibility lies on the ecommerce operator releasing payment to supplier unless the supplier itself is an operator.
The obligation to collect Tax Collected at Source and perform related KGST compliance falls on the e commerce operator that finally releases payment to the supplier; if the supplier is itself an operator, the buyer side operator that collects payment and remits the balance must collect the TCS and complete payment and reporting obligations.

Input Tax Credit availability limited by supplier reported entries; claims permitted only when supplier reporting is communicated and verified.
Clarification governs reconciliation of Input Tax Credit differences for April 1, 2019 to December 31, 2021, confirming transitional caps on additional ITC claims after the invoicing reconciliation rule took effect, subject to the statutory condition that tax must have been paid by the supplier and to verification through the prescribed certificate process. Period wise caps limit additional ITC where suppliers have not furnished invoice details; cumulative aggregation rules apply for specified month ranges. From the statutory amendment effective thereafter, ITC is allowable only where the supply is reported by the supplier and communicated to the recipient through the automated supplier to recipient statement. The guidance applies to ongoing proceedings for the stated period.

Interest on wrongly availed IGST credit-aggregate ITC pool governs when interest applies, not IGST-head alone.
Clarification states that for interest on wrongly availed IGST credit the determining factor is the total input tax credit balance across IGST, CGST and KGST in the electronic credit ledger; interest is chargeable only to the extent the combined ITC falls below the wrongly availed IGST amount. Compensation cess credit is excluded from this aggregate since it cannot be used to discharge IGST, CGST or KGST liabilities.

Self Sealing Permission for exporters set with fixed initial terms, renewal criteria, mandatory RFID e seals, and port specific authorisation.
Manufacturer exporters receive initial Self Sealing Permission for five years and merchant exporters for one year; extensions are five years for manufacturers and two years for merchants if they export at least six consignments annually using the self sealing facility and have no customs contraventions. Use of CBIC approved RFID e seals is mandatory, permissions are port specific (INMAA1, INKAT1, INENR1), and amendments to premises, authorized signatory or ROC require competent authority approval. Renewal applications must be submitted two months before expiry with export statements; earlier open ended permissions must be regularised within three months.

Input tax credit allocation: head office may use ISD or invoice branches, determining branch ITC entitlement and valuation.
HO may distribute ITC for common input services either via ISD (requiring ISD registration) or by issuing tax invoices to BOs, with ISD distribution allowed only if services are attributable to or actually provided to BOs. For internally generated services, if the recipient BO is eligible for full ITC the invoice value declared is deemed the open market value; absence of an invoice may be treated as Nil value deemed to be open market value. Salary cost of HO employees need not be mandatorily included in the taxable value even where BO lacks full ITC.

E-invoicing applicability: suppliers exceeding threshold must issue e-invoices for supplies to government entities registered for TDS.
E-invoicing is required where a supplier's turnover exceeds the prescribed threshold and the recipient is a government department, establishment, agency, local authority or PSU registered solely for tax deduction at source; such entities are treated as registered persons and supplies to them therefore attract the e-invoicing obligation under the Assam GST Rules.