There are a few new GST changes that are being implemented recently that can severely impact taxpayers and businesses. We have collated all the significant GST changes being applicable from 1st October 2022 onwards that you need to be aware of! Let us look at the changes in major brackets one by one. Read below…

1. Input Tax Credit

From 01st October 2022 onwards, a taxpayer’s Input Tax Credit (ITC) may get restricted if their vendor has done the following:

• • Not paid taxes tax for the prescribed period or paid incomplete taxes by a certain percentage 
  • Utilized ITC to pay taxes beyond the maximum permissible limit or obtained extra ITC by such limit
  • Taken registration within such period 

The duration, limit, and percentage of such a restriction have not yet been determined and may be in due course. Therefore, extra vigilance is needed when using ITC. Taking care to select a vendor with legitimate, established credentials will be the only way to utilise ITC services without facing legal issues. Read more about vendor compliance and ITC here.

Also Read: Maximize ITC Claim: Here are 4 things you need to do!

2. Last date to claim ITC and amend sales/CDN extended

As per GST Notification 18/2022, the time limit to claim ITC and amend sales/CDN has been extended (including for FY 21-22) by the CBIC. So, the date has been changed for claiming ITC, issuing CDN, and doing amendments to returns of the previous year till 30th November by notifying clause 100 of the Finance Act 2022 to be effective from 1st October 2022.

Read in detail about this change here: Last date to claim ITC and amend sales/CDN extended

3. E-invoicing

Recently, the government decided to lower the e-invoice threshold limit to Rs. 10 Cr. i.e. businesses with an annual aggregate turnover of Rs. 10 Cr. or more in any financial year from 2017-18 onwards need to mandatorily start generating IRN from October 1, 2022 as per GST notification 17/2022. Sources say that the e-invoice turnover limit is soon going to be even lowered as Taxpayers with turnover above Rs. 5 Cr. are enabled for testing on Sandbox.

4. Cancellation of GST Registration for failure to file a return

The Tax Officers have been given the authority to revoke registration in specified circumstances. Note the following:

1. A composite taxpayer failed to file a return for a fiscal year – 3 months after the deadline had passed.
2. Regular Taxpayers failed to file returns for all applicable consecutive tax periods as permitted.

Read: Cancellation, Revocation and Re-Registration under GST

5. GST Refund Facilities

The following GST changes from 1st October 2022 are applicable with respect to GST Refunds:

1. If you want to request a refund of the excess amount in your GST-PMT-03, or electronic cash ledger, you must complete a GST refund application.
2. Refunds for supplies provided to SEZ Developers or SEZ Units must be processed within two years of the due date on which GSTR 3B is or should have been filed. There were several ambiguities regarding this topic, particularly in regard to the relevant date. Things are now clear since the situation has been made clear.

6. Consequences of Vendor Non-Compliance

If a taxpayer received ITC but did not pay the supplier within 180 days of the invoice date, they will now be required to pay tax as well as interest. Prior to ITC being used, it was suggested that if the buyer delayed payment to the vendor for longer than 180 days, interest should be charged. But it was not notified. The interest liability is also accruing as a result of the recent adjustments. The buyer can still reclaim the credit after completing the required payments, but the interest will now be considered a cost.

Read all about Vendor Compliance here!

7. Changes in GST Returns

There are several changes that have been prescribed by the government related to GST Return filing. Listed down all the changes below:

a) GSTR-1:

It is now compulsory that the Statement of outward supply (known as GSTR-1 Return) must be filed in chronological order. This means sequencing of returns is mandatory. Unless the earlier return is not filed current month’s return cannot be filed. Further Government can prescribe conditions/restrictions in filling out details of outward supply and subsequent communication to the recipient.

b) GSTR-3B:

Restricts filling of GSTR 3B of the current period if GSTR 1 of the previous period is not filled.

c) QRMP:

Taxpayers who have chosen the QRMP scheme may do so now by self-assessment or in another manner that the government will specify in the future.

d) GSTR-5:

Till now under the GST Regime, a non-resident taxable person was required to file a GST return on a monthly basis in form GSTR-5 by the 20th of the following month. However, such a due date has been rescheduled till the 13th of the following month.

e) GSTR-8: 

The late fee shall attract on late filing of the form GSTR-8 by Rs. 100 per day. 

Maximum late fees: 10,000/-.

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