PAPER 8: INDIRECT TAX LAWS

STATUTORY UPDATE FOR MAY 2022

EXAMINATION

For the sake of brevity, Central Goods and Services Tax, Integrated Goods and Services
Tax, Central Goods and Services Tax Act, 2017, Integrated Goods and Services Tax Act,
2017, Central Goods and Services Tax Rules, 2017 and Integrated Goods and Services
Tax Rules, 2017 have been referred to as CGST, IGST, CGST Act, IGST Act, CGST Rules
and IGST Rules respectively.

The following are applicable for May 2022 examination:

(i) The provisions of the CGST Act, 2017 and IGST Act, 2017 as amended by the
Finance Act, 2021, which have become effective up to 31 st October, 2021,
including significant notifications and circulars issued and other legislative
amendments made, up to 31 st October, 2021.
(ii) The provisions of the Customs Act, 1962 and the Customs Tariff Act, 1975,
as amended by the Finance Act, 2021, including significant notifications and
circulars issued and other legislative amendments made, up to 31 st October,
2021.
* The amendments made by the Annual Union Finance Acts in the CGST Act, 2017
and IGST Act, 2017 are made effective from the date notified subsequently. Thus,
only those amendments made by the Finance Act, 2021 which have become
effective till 31.10.2021 namely, amendments made in sections 35, 44 and 50 of
the CGST Act, 2017 are applicable for May 2022 examinations. Remaining
amendments made by the Finance Act, 2021 are not applicable for May 2022
examinations. Further, it may be noted that amendments made by the Finance
(No. 2) Act, 2019 in sections 2(4), 95, 102, 103, 104, 105 and 106 of the CGST Act,
2017 and the insertion of new sections 101A, 101B & 101C in the CGST Act, 2017
have not become effective till 31.10.2021 and thus, are not applicable for May
2022 examinations.

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The subject matter of Part I: Goods and Services Tax of October 2021 Edition of
the Study Material of Final (New Course) Paper 8: Indirect Tax Laws is based on
the provisions of the CGST Act and the IGST Act as amended upto 30.04.2021.
The amendments made by the notifications and circulars issued between
01.05.2021 and 31.10.2021 in GST laws are given in this Statutory Update.
The content discussed in Part II: Customs & FTP of the Study Material is based on the
customs law as amended by the Finance Act, 2021 and significant notifications and
circulars issued till 30.04.2021. The significant notifications/ circulars issued from
01.05.2021 and 31.10.2021 in Customs & FTP are given in this Statutory
Update.
For the ease of reference, the amendments have been grouped into Chapters
which correspond with the Chapters of the Study Material.

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 PART -I: GOODS
AND SERVICES TAX

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 4

EXEMPTIONS
FROM GST
1. Amendments in the list of services exempted from GST
Notification no. 12/2017 CT(R) dated 28.06.2017 provides list of services
exempted from CGST. With effect from 01.10.2021, the said list of
exempted services has been amended as follows:-
(i) Amendment in the existing exemptions
Below mentioned entries of exemption from GST have been amended.
Amendments have been highlighted in bold hereunder:

Sl. Description of services

No.

19A Services by way of transportation of goods by an aircraft from

customs station of clearance in India to a place outside India
This exemption is applicable upto 30.09.2022.

19B Services by way of transportation of goods by a vessel from

customs station of clearance in India to a place outside India
This exemption is applicable upto 30.09.2022.

72 Services provided to the Central Government, State Government,

Union territory administration under any training programme for
which 75% or more of the total expenditure is borne by the

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 Central Government, State Government, Union territory
administration

(ii) New exemptions introduced

Following new services have been exempted from CGST:

Sl. Description of services

No.

61A Services by way of granting National Permit to a goods carriage

to operate through-out India/ contiguous States

(iii) Withdrawal of existing exemption

Exemption from CGST available to following services has been withdrawn:

Sl. Description of services

No.

43 Services of leasing of assets (rolling stock assets including

wagons, coaches, locos) by the Indian Railways Finance
Corporation to Indian Railways

Parallel exemptions from IGST have been extended to supply of inter-State

services by amending Notification No. 9/2017 IT(R) dated 28.06.2017, which
grants exemption to supply of inter-State services from IGST.
[Notification No. 07/2021 CT(R) dated 30.09.2021 and Notification No.
07/2021 IT(R) dated 30.09.2021]

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PLACE OF SUPPLY
1. Place of supply of B2B MRO services in case of shipping industry shall
be the location of the recipient.
Section 13 of the IGST Act determines the place of supply of services where
location of supplier or location of recipient is outside India. In order to
prevent double taxation or non-taxation of supply of any service, sub-
section (13) of said section empowers the Government to notify any service
for which the place of supply shall be the place of effective use and
enjoyment of service. Few services had already been notified in this regard
vide Notification No. 4/2019 IT dated 30.09.2019.
Said notification has been amended to notify the place of supply of
maintenance, repair or overhaul service in respect of ships and other
vessels, or parts thereof as follows
The place of supply in respect of B2B supply of maintenance, repair or
overhaul service (hereinafter referred to as MRO service) in respect of ships
and other vessels, their engines and other components or parts supplied to
a person for use in the course or furtherance of business shall be the
location of the recipient of service.
By virtue of this notification, if an Indian shipping company has received

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 MRO service in respect of a ship/vessel from a foreign supplier, place of
supply of such service is in India (location of recipient being in India) and
said service would qualify as an ‘import of service’. Resultantly, GST is
payable under reverse charge on these services1.
[Notification No. 03/2021 IT dated 02.06.2021]

1
In the absence of such notification, the place of supply of such MRO service provided by a
foreign supplier to an Indian shipping company would have been the location where the
services are actually performed, determined in terms of section 13(3)(a) of the IGST Act.
Accordingly, the place of supply of such services would have been outside India and thus,
they would not have qualified as import of services, thus, not been liable to GST.

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REGISTRATION
1. Extension of time-limit for filing application for revocation of
cancellation of registration by a registered person permitted beyond
the stipulated time
W.e.f. 01.01.2021, proviso to section 30(1) of the CGST Act, 2017 was
substituted to permit the extension of time-limit for filing application for
revocation of cancellation of registration by a registered person.
Accordingly, the time period of filing of application for revocation of 30
days from the date of service of the order of cancellation of registration,
may, on sufficient cause being shown, and for reasons to be recorded in
writing, be extended,—
(a) by the Additional Commissioner or the Joint Commissioner, as the
case may be, for a period not exceeding 30 days;
(b) by the Commissioner, for a further period not exceeding 30 days,
beyond the period specified in clause (a).
Consequently, rule 23(1) of the CGST Rules has also been suitably amended
to give effect to aforesaid amendment. Amended rule 23(1) reads as
follows:
A registered person, whose registration is cancelled by the proper officer on
his own motion, may submit an application for revocation of cancellation of
registration, in prescribed form, to such proper officer, within a period of 30
days from the date of the service of the order of cancellation of registration

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 or within such time period as extended by the Additional Commissioner
or the Joint Commissioner or the Commissioner, as the case may be, in
exercise of the powers provided under the proviso to section 30(1), at
the common portal, either directly or through a Facilitation Centre notified
by the Commissioner.
[Notification No. 15/2021 CT dated 18.05.2021]

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TAX INVOICE, CREDIT AND

DEBIT NOTES
1. E-invoicing not applicable to a Government Department and a local
authority
E-invoicing is mandatory for persons notified vide Notification No. 13/2020
CT dated 21.03.2020 as amended. As per said notification, all registered
businesses with an aggregate turnover in any preceding financial year from
2017-18 onwards greater than ` 50 crore are mandatorily required to issue
e-invoices except:-
✓ Special Economic Zone units**

✓ Insurer or banking company or financial institution including NBFC

✓ GTA supplying services in relation to transportation of goods by road

in a goods carriage

✓ Supplier of passenger transportation service

✓ Person supplying services by way of admission to exhibition of
cinematograph films in multiplex screens
Said notification has been amended to exempt a Government Department
and a local authority also from the mandatory requirement of e-invoicing.
[Notification No. 23/2021 CT dated 01.06.2021]

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ACCOUNTS AND RECORDS;

E-WAY BILL
1. E-way bill generation facility to be blocked only in respect of outward
movement of goods, by the defaulting registered person [Rule 138E]
Rule 138E of the CGST Rules contains provisions pertaining to blocking of e-
way bill generation facility, i.e. disabling the generation of e-way bill.
Earlier, a user was not able to generate e-way bill for a GSTIN if the said
GSTIN was not eligible for e-way bill generation in terms of rule 138E. It
implies that the GSTINs of such blocked taxpayers could not be used to
generate the e-way bills neither as supplier (consignor) nor as recipient
(consignee).
Said rule has been amended to relax such restriction. Blocking of GSTIN for
e-way bill generation would only be for the defaulting supplier GSTIN and
not for the defaulting Recipient or Transporter GSTIN. Suspended GSTIN
cannot generate e-way bill as supplier. However, the suspended GSTIN can
get the e-way bill generated as recipient or as transporter.
In other words, e-way bill generation facility is blocked only in respect of any
outward movement of goods of the registered person who is not eligible for
e-way bill generation as per rule 138E. E-way bills can be generated in
respect of inward supplies of said registered person.
Mr. A, a registered person paying tax under regular scheme in
Delhi, has not filed Form GSTR-1 for last 2 months. Mr. B, Haryana,
(a regular return filer) wants to generate an e-way bill for goods

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 to be supplied to Mr. A. As per earlier position of law, Mr. B would not have
been able to generate e-way bill with Mr. A’s GSTIN.
In terms of the amended position of law, there will be no more restriction in
generating e-way Bill as Mr. B who is making outward movement of goods is
a regular return filer.
Mr. A wants to generate an e-way bill in respect of an outward supply of
goods to Mr. H. E-way bill generation is blocked in this case as it’s an
outward movement of goods of Mr. A who has not filed GSTR-1 for past 2
months.
[Notification No. 15/2021 CT dated 18.05.2021]

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RETURNS
1. Maximum late fees payable under section 47 for delayed filing of
Forms GSTR-1, GSTR-3B, GSTR-4 and GSTR-7, rationalized
Section 47 of the CGST Act stipulates a specified amount of late fee for
delay in filing any of the following by their respective due dates:
(A) Statement of Outward Supplies [Section 37]
(B) Returns (including returns under QRMP Scheme) Returns [Section 39]
(C) Final Return [Section 45]
An equal amount of late fee is payable by such person under the respective
SGST/UTGST Act as well. Penalty leviable under IGST Act shall be the sum
total of the penalties leviable under the CGST Act and the SGST/UTGST Act.
The late fee can be waived off partially or fully by the Central Government.
Consequently, since the inception of GST law, late fee is being regularly
waived off by the Central Government either partially or fully.
From the tax period June, 2021 onwards or quarter ending June, 2021 or FY
2020-21 onwards, as the case may be, late fee for delayed filing of Forms
GSTR-1, GSTR-3B, GSTR-4 and GSTR-7, has been rationalized as follows:

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 For delayed filing of GSTR-1 and/or GSTR-3B:-
Total amount of late fee payable under section 47 of the CGST Act from
June, 2021 / quarter ending June, 2021 onwards, by the registered
person who fail to furnish Form GSTR-1 and/or Form GSTR-3B by the due
date, shall be as follows:
Class of registered persons Quantum of Late fee

(1) Registered
persons who have nil
outward supplies in ` 500 (` 250 each
the tax period/ whose under CGST &
total amount of tax SGST or ` 500
Class of registered persons

payable in the GSTR- under IGST)

3B is Nil, as the case
may be

Aggregate ` 2,000 (` 1,000

turnover of ≤ ` each under CGST
1.5 crores in the & SGST or ` 2,000
(2) Registered preceding FY under IGST)
persons other
than those
covered in (1)
` 5 crores ≥
above ` 5,000 (` 2,500
Aggregate
each under CGST
turnover of > `
& SGST or ` 5,000
1.5 crores, in the
under IGST)
preceding FY

Registered Late fee as

persons other specified under
than (1) and (2) section 47

For delayed filing of GSTR-4:-

Total amount of late fee payable under section 47 of the CGST Act from
F.Y. 2021-22 onwards, by the registered person (composition taxpayer)
who fail to furnish Form GSTR-4 by the due date, shall be as follows:

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 Class of registered persons Quantum of Late fee

` 500 (` 250 each

(1) Total tax payable in under CGST & SGST
GSTR-4 is Nil or ` 500 under
IGST)
Where

(2) Registered persons ` 2,000 (` 1,000 each

other than those under CGST & SGST
covered in (1) above or ` 2,000 under IGST)

For delayed filing of GSTR-7:-

Total amount of late fee payable under section 47 of the CGST Act by any
registered person, required to deduct tax at source under the provisions of
section 51 of the CGST Act for delayed filing of GSTR-7, from the month of
June 2021 onwards, shall be as follows:

` 25 for every day during which such

failure continues.
Quantum whichever
of late fee is lower
` 100

[Notification Nos 19-22/2021 CT all dated 01.06.2021]

2. Mandatory requirement of getting annual accounts audited and
reconciliation statement submitted by specified professional, done
away with [Section 35(5) omitted and section 44 substituted]
Earlier, section 35(5) of the CGST Act, 2017 provided that every registered
person whose turnover during a financial year exceeds the prescribed limit
shall get his accounts audited by a chartered accountant or a cost
accountant and shall submit a copy of the audited annual accounts, the

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 reconciliation statement under section 44(2) and such other documents in
such form and manner as may be prescribed. However, this provision shall
apply to any Department of the Central Government or a State Government
or a local authority, whose books of account are subject to audit by the
Comptroller and Auditor-General of India or an auditor appointed for
auditing the accounts of local authorities under any law for the time being
in force.
With effect from 01.08.2021, sub-section (5) of section 35 has been omitted
as to remove the mandatory requirement of getting annual accounts
audited and reconciliation statement submitted by specified professional.
Further, with effect from 01.08.2021, section 44 of the CGST Act, 2017 has
been substituted so as to remove the mandatory requirement of furnishing
a reconciliation statement duly audited by specified professional and to
provide for filing of the annual return on self-certification basis. It further
provides for the Commissioner to exempt a class of taxpayers from the
requirement of filing the annual return.
Substituted section 44 reads as follows:
Every registered person, other than an input service distributor, a person
paying tax under section 51 or section 52, a casual taxable person and a
non-resident taxable person shall furnish an annual return which may
include a self-certified reconciliation statement, reconciling the value of
supplies declared in the return furnished for the financial year, with the
audited annual financial statement for every financial year electronically,
within such time and in such form and in such manner as may be
prescribed.
However, the Commissioner may, on the recommendations of the Council,
by notification, exempt any class of registered persons from filing annual
return under this section.
Further, nothing contained section 44 shall apply to any department of the
Central Government or a State Government or a local authority, whose
books of account are subject to audit by the Comptroller and Auditor-
General of India, or an auditor appointed for auditing the accounts of local
authorities under any law for the time being in force.

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REFUNDS

1. In case of deficiency in refund application, limitation period of 2 years

for making refund claim to exclude the time period from the date of
filing of the refund claim till the date of communication of the
deficiencies [Rule 90(3)]
The time period for making an application for claiming refund of tax,
interest or any other amount is 2 years from the ‘relevant date’ [Section
54(1)].
Further, as per rule 90(3) of the CGST Rules, where any deficiencies are
noticed in the application for refund claim, the proper officer shall
communicate the deficiencies to the applicant in Deficiency memo,
requiring him to file a fresh refund application after rectification of such
deficiencies.
A proviso has been inserted to the said sub-rule to provide that the time
period from the date of filing of the refund claim till the date of
communication of the deficiencies in the prescribed form by the proper
officer, shall be excluded from the period of ‘2 years’ as specified under
section 54(1), in respect of any such fresh refund claim filed by the applicant
after rectification of the deficiencies.
[Notification No. 15/2021 CT dated 18.05.2021]

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2. Facility of withdrawal of refund application by taxpayer introduced
[Rule 90(5) and (6)]
Earlier the taxpayers had no option to withdraw their refund applications, if
they had committed any mistakes, while filing the application. A
functionality has now been implemented for the taxpayer [by inserting sub-
rules (5) and (6) to rule 90 of the CGST Rules], to withdraw an already filed
refund application, by filing an application in prescribed form upto a
specified time. Newly inserted sub-rules provide as follows:
The applicant may, at any time before issuance of provisional refund
sanction order or final refund sanction order or payment order or refund
withhold order or show-cause notice, in respect of any refund application
filed, withdraw the said application for refund by filing an application in the
prescribed form.
On submission of such withdrawal application, any amount debited by the
applicant from electronic credit ledger or electronic cash ledger, as the case
may be, while filing refund application, shall be credited back to the ledger
from which such debit was made.
[Notification No. 15/2021 CT dated 18.05.2021]
3. Order for release of withheld refund to be issued where refund no
longer liable to be withheld. Order for complete adjustment of
demand for refund not required to be issued [Rule 92(1) and (2)]
Earlier, in case where refund is completely adjusted against any outstanding
demand, an order giving details of the adjustment was issued [Proviso to
rule 92(1) of the CGST Rules]. The said proviso has been omitted.
Resultantly, no such order will now be issued.
Further, proviso to rule 92(2) has been inserted to provide that where the
proper officer or the Commissioner is satisfied that the refund is no longer
liable to be withheld, he may pass an order for release of withheld refund in
prescribed form.
4. In case of an applicant who becomes entitled to refund after being
withheld, order for release of withheld refund to be passed before
passing final refund sanction order [Rule 96(7)]
Rule 96 of the CGST Rules contains the provisions relating to refund of IGST

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 paid on goods or services exported out of India.
Sub-rule (7) of the said rule provides that in case where the claim for refund
was withheld for specified reasons and subsequently, the applicant becomes
entitled to refund of the amount withheld, the concerned jurisdictional
officer shall proceed to refund the amount after passing refund sanction
order.
The said sub-rule has been amended. Now, the concerned jurisdictional
officer is required to first pass an order for release of withheld refund
and then he will pass refund sanction order in case of the applicant who
becomes entitled to refund withheld.
[Notification No. 15/2021 CT dated 18.05.2021]

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JOB WORK
1. Frequency of filing GST ITC-04 revised from quarterly to annual/half-
yearly
Form GST ITC-04 serves as an intimation that is furnished by a registered
manufacturer (principal) giving the details of goods/capital goods
dispatched to/received from job workers.
Earlier, as per rule 45(3) of the CGST Rules, Form GST ITC-04 was furnished
on a quarterly basis. Said form was to be furnished for said period, on or
before 25th day of the month succeeding the said quarter or within such
further period as may be extended by the Commissioner by a notification in
this behalf.
With effect from 01.10.2021, rule 45(3) has been amended. Now, Form GST
ITC-04 is required to be furnished by the principal on annual/half yearly
basis, depending upon the quantum of his aggregate turnover during
immediately preceding financial year.

In respect of a principal whose Form GST ITC-04 is required to be

aggregate turnover during the furnished
immediately preceding FY

> ` 5 crore on half yearly basis, i.e., for April-

September, due date will be 25th
October and for October-March, due

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 date will be 25th April

≤ ` 5 crore on annual basis, i.e., for FY 2021-22,

due date will be 25th April, 2022.

The aforesaid amendment can also be presented in the following manner-

Aggregate turnover of Form GST ITC-04 Due date(s) for

principal during preceding F.Y. to be filed on filing Form GST
ITC-04
upto ` 5 crore annual basis 25th April
greater than ` 5 crore half yearly basis 25th October &
25th April
[Notification No. 35/2021 CT dated 24.09.2021]

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 PART II:
CUSTOMS &
FOREIGN TRADE
POLICY

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FOREIGN TRADE
POLICY
1. Applicability of FTP extended till 31.03.2022
Foreign Trade Policy (FTP), 2015-2020, (as updated) incorporating provisions
relating to export and import of goods and services will now remain in
force upto 31.03.2022, unless otherwise specified.
[Notification No. 33/2015-2020 dated 28.09.2021]
2. Exemption from IGST and GST compensation cess extended upto
31.03.2022, in case of imports under Advance Authorisation, EPCG,
EOU/EHTP/STP/BTP units
Earlier imports against Advance Authorisations for physical exports were
exempted from Integrated Tax and Compensation Cess upto 30.09.2021.
The exemption from Integrated Tax and Compensation Cess in case of
imports against Advance Authorisations for physical exports has now been
extended upto 31.03.2022.
Earlier capital goods imported under EPCG Authorisation for physical
exports were exempted from IGST and Compensation Cess upto 30.09.2021.
The exemption from IGST and Compensation Cess in case of capital goods
imported under EPCG Authorisation for physical exports has now been
extended upto 31.03.2022.
In case of goods imported by EOU/EHTP/STP/BTP units from DTA, IGST and
GST compensation cess were exempt upto 30.09.2021. The exemption from
IGST and GST Compensation Cess in case of goods imported by

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 EOU/EHTP/STP/BTP units from DTA has now been extended upto
31.03.2022.
[Notification No. 33/2015-2020 dated 28.09.2021]
3. Principles of restrictions and prohibitions for imports/exports revised
to be in line with international agreements
With effect from 10.08.2021, principles of restrictions and prohibitions for
imports/exports have been revised as follows:-
DGFT may, through a notification, impose ‘prohibition’ or ‘restriction’:-
a. on export of foodstuffs or other essential products for preventing or
relieving critical shortages;
b. on imports and exports necessary for the application of standards or
regulations for the classification, grading or marketing of commodities
in international trade;
c. on imports of fisheries product, imported in any form, for enforcement
of governmental measures to restrict production of the domestic
product or for certain other purposes;
d. on import to safeguard country’s external financial position and to
ensure a level of reserves.
e. on imports to promote establishment of a particular industry;
f. for preventing sudden increases in imports from causing serious injury
to domestic producers or to relieve producers who have suffered such
injury;
g. for protection of public morals or to maintain public order;
h. for protection of human, animal or plant life or health
i. relating to the importations or exportations of gold or silver;
j. necessary to secure compliance with laws and regulations including
those relating to the protection of patents, trademarks and copyrights,
and the prevention of deceptive practices
k. relating to the products of prison labour
l. for the protection of national treasures of artistic, historic or

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 archaeological value
m. for the conservation of exhaustible natural resources
n. for ensuring essential quantities for the domestic processing industry
o. essential to the acquisition or distribution of products in general or
local short supply;
p. for the protection of country’s essential security interests:
i. relating to fissionable materials or the materials from which they
are derived;
ii. relating to the traffic in arms, ammunition and implements of
war;
iii. taken in time of war or other emergency in international
relations; or
q. in pursuance of country’s obligations under the United Nations
Charter for the maintenance of international peace and security.
The aforesaid principles of restrictions and prohibitions for imports/exports
have been amended to be in line with international agreements.
[Notification No. 17/2015-2020 dated 10.08.2021]

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