Centre to Shortly Announce The Third Amendment Rules 2020

The Centre has come up with amendments in the laws under section 164 of the CGST Act 2017 widely acclaimed as ‘The Third Amendment Rules 2020’

Modifications in the Rules made by the government:

Mandating the Aadhaar Authentication

Aadhaar authentication is mandatory for the grant of registration to businesses in India. As per the memorandum released by the government, the applicant has to give the Aadhaar number on a mandatory basis while filing the application under section 8(4) of the CGST Act 2017 for registration.

Under any circumstances, if the applicant fails to furnish the Adhaar details or any other discrepancy is encountered by the officials, then there will be a physical verification of the principal place of business before approving the application. Further declared by the government, the end result of the application should not take more than 60 days starting from the date of filing the form.

As mandated under section 25 of the CGST act, physical verification of premises from where the applicant is handling his/her business shall be done by the tax officer only when the Aadhaar authentication of the applicant is failed/pending. Once the said verification of the business premises is complete then the verification report along with the photographs of the business premises shall be uploaded with Form GST REG 30 on GST Portal.

Laws Related to ITC Availment

Input Tax Credit Read out the simple guide to capital goods concept under GST law. Also, know the input tax credit eligibility norms on such capital goods. Read More on the amount mentioned in the invoice shall directly be credited to the Electronic Cash Ledger of the purchaser and in case of ineligibility of the invoice, 5% of the said amount shall be added to the put tax liability of the purchaser (applicable only for the quarter or period for which ITC was claimed).
Adding on, the amount (in the invoice) is supposed to be calculated separately as ITC of Central Tax, State-Tax, Union Territory Tax and Integrated Tax in Form GSTR 3B. The useful life of the capital goods shall be considered five years from the date of issue of an invoice.

Laws Related to Annual Audits

The provision says that, any business with an annual turnover exceeding Rs. 5 Cr shall mandatorily get their accounts audited as per the laws mentioned under section 35(5). Such businesses shall affix the reports of “audited accounts” with the reconciliation statement Form GSTR 9C Get the easy guide to GSTR 9C along with complete online return filing process. GSTR 9C is a GST audit form for taxpayers having turnover more than 2 crores. Read More for FY 2018-19.

Norms Related to Recovery of Refunds

Taxpayers can claim the excess amount paid as the tax of refunds directly into the electronic credit ledger. Following the verification and approval of all the documents, the amount shall be re-credited in cash through the order passed by the tax officer (Form GST PMT-03).

Refund on Zero-rated Supplies or Deemed Exports

Zero-rated supplies are tax exempt supplies and deemed exports being the supplies that do not leave India (no export to foreign countries). Refund claims by the taxpayer on zero-rated supplies or deemed exports are subject to verification by the proper officer. After such verification, the officer issues Form RFD-06 approving the amount of refund to be paid in cash. For the remaining amount that is refundable and that has been debited from the electronic credit ledger, the amount shall be re-credited after the Form GST PMT 3. issued by the proper officer. Thereon the amount will be re-credited as ITC in the electronic credit ledger of the applicant.

Benefits on Custom Duty – Such benefits on custom duty shall be availed only after the supplier has paid Integrated GST and Compensation Cess on the supply of inputs and has availed exemption of only Basic Custom Duty (BCD).

Recovery of Refund paid on underutilized ITC or on IGST of goods where exports are not realized – Any refund made to the applicant for unutilized ITC or on IGST applicable to the exports that are not released within the time span allotted by the Foreign Management Act, 1999. The refunded amount shall be redeposited to the government after the extension of the time span with applicable interest within thirty days of the expiry of the said period or in accordance with section 73 or 74 of the CGST Act.

In case if the applicant has a valid reason for not proceeding the sales and is approved by the Reserve Bank of India, then such refunds will not be recovered by the government.

If the sale proceeds after the refund amount is recovered by the government then within the period of three months starting from the date of realization of sale proceeds, the amount recovered by the government shall be refunded back to the applicant after approval from the proper officer.

Centre to Shortly Announce The Third Amendment Rules 2020