Union Budget 2022-23: Indirect Tax Highlights

• An amendment under Section 16(2) of the CGST Act to the effect that ITC can be claimed if such ITC is not restricted in GSTR 2B of the taxpayer
• Maximum time limit to avail input tax credit under Section 16(4) of the CGST Act to be extended till 30 November of the succeeding financial year to which such credit pertains
• Maximum time limit to issue and declare the tax credit note in respect of the supply made in a financial year to be extended till 30 November of the succeeding financial year
• Maximum time limit for rectification of error in Form GSTR 1 and Form GSTR 3B to be extended to 30 November of the succeeding financial year to which adjustment pertains
• Omission of Section 42, 43 and 43A of the CGST Act so as to remove the two-way communication in respect of filing of return
• An amendment under Section 49 of the CGST Act to allow transfer of cash from electronical cash ledger of one GSTIN to another GSTIN under the same PAN
• Section 50(3) of the CGST Act is substituted to levy interest only when the input tax credit is wrongly availed and utilised. Further, it also proposed to levy interest @ 18% with retrospective effect from 01 July 2017 (instead of 24%) on such wrongly availed and utilised input tax credit
• Time limit to file refund application in case of Zero rated supplies to Special Economic Zones (‘SEZs’) units and developer has been prescribed i.e., 2 years from the due date of filing of GSTR 3B

Key Proposals under the Custom Law

• Term ‘proper officer’ under Section 2(34) of the Custom Act read with Section 3 to be amended so to specifically include the officers of DRI, Audit and Preventive formation in the class of officers for the purpose of assignment of functions under the Custom Law (with an objective to correct the infirmity observed by the Courts in recent judgments)
• A new provision to be inserted under Section 14 of the Custom Act which casts an additional obligations on the importer to provide criteria of selection and checks of such imported goods where the Board has reason to believe that the value is not being declared truthfully or accurately
• Advance rulings under Section 28(J)(1) of the Custom Act to be valid for a period of 3 years or change in law or facts whichever is earlier
• An amendment under Section 28(H) of the Custom Act for charging appropriate fees from the applicant seeking advance ruling and give flexibility to the applicant to withdraw his application at any time before a ruling is pronounced (as compared to existing time limit of 30 days from the date of filing)
• Insertion of new provision to protect the import and export data submitted to Customs by importers or exporters in their declarations by making the publication of such information as an offence under Customs Act (unless provided by the law)
• On account of proposed SEZ reforms, change in Customs Administration of SEZs and shall henceforth be fully IT driven with a focus on higher facilitation and with only risk-based check (with effect from 30 September 2022)

Key Rate Changes

• Change in BCD Rate on camera lens for use in manufacture of camera module of cellular mobile phones, specified parts of transformers for use in manufacture of charges/adapters, Umbrellas, Solar Modules, Sodium Cyanide, Methyl Alcohol and Acetic Acid etc.
• Change in levy of Social Welfare Surcharge on certain goods like man-made textiles items, cotton fabrics and other vegetable textile fibre etc.

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