Union Budget 2021-22: Top 10 Indirect Tax Highlights

1. A new cess namely, Agriculture Infrastructure and Development Cess is proposed on import of goods and specified goods manufactured/ produced in India. The rates have been specified in the Customs and Excise Tariff
2. An amendment is proposed in the GST laws to provide for filing of GSTR 9 (i.e., Annual Return) along with a self-certified reconciliation statement. Accordingly, mandatory requirement for furnishing a reconciliation statement duly audited by specified professional (i.e., GST Audit) is proposed to be omitted
3. Among other conditions for claiming input tax credit, an additional condition is proposed to be inserted to provide that the registered person would be entitled to claim credit pertaining to invoices or debit notes furnished in the supplier’s outward return i.e., as appearing in GSTR-2A/ 2B of the recipient. Therefore, a recipient will only be entitled to claim input tax credit when the same are declared in the supplier’s return
4. Provisions of Section 50 of the CGST Act proposed to be amended to provide for interest liability on net cash liability retrospectively with effect from 01 July 2017. Thus, interest would only be payable on the tax liability discharged by way of cash payment
5. Scope of Supply under the GST law is proposed to be amended with retrospective effect (i.e., 01 July 2017), to include the activities or transactions, by a person, other than an individual, to its member etc., or vice-versa, for consideration. Accordingly, Paragraph 7 of the Schedule II of the CGST Act is proposed to be omitted. As a result of the same, supply made by a club or association to its members will be taxable
6. An amendment in the GST laws is proposed to link the foreign exchange remittance in case of GST refund pertaining to export of goods. Thus, in the case of non-receipt of foreign exchange remittance within the specified time, the GST refund granted earlier may be recovered
7. The scope of zero-rated supplies made to special economic zones is proposed to be restricted to such supplies that are for its authorized operations
8. An Amendment is proposed in the Customs laws to mandate filing of bill of entry before the end of the day preceding the day (including holidays) of arrival of goods
9. Changes proposed to the first schedule to the Customs Tariff Act w.e.f. 01 January 2022. This is in accordance with HSN 2022, which proposes 351 amendments to the existing harmonized nomenclature for recognition of new product streams, changing nature of commodities being traded, advent of new technologies etc.
10. BCD exemption has been removed on printed circuit board assembly, camera module, connectors, tanned leather, crust leather, finished leather of all kinds, moulded plastics of charger or adapter etc.

(These key highlights have been prepared basis the budget documents released by the Union Government)