Relevant Extracts | Notes on Clauses – Appended to Finance Bill, 2021

Notes on Clauses

Appended to Finance Bill, 2021

(Relevant Extracts)

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Excise

Clause 96 of the Bill seeks to amend the Fourth Schedule to the Central Excise Act. Sub-clause (i) of the said clause seeks to revise the heading, tariff items and entries falling under the heading 2709 of Chapter 27 thereof, with effect from the 1st April, 2021 in the manner specified in the Fifth Schedule;

Sub-clause (ii) of the said clause seeks to amend section heading of SECTION IV and certain entries of Chapter 24 thereof, with effect from the 1st January, 2022 in the manner specified in the Sixth Schedule.

Clause 97 of the Bill seeks to amend the Fourth Schedule to the Central Excise Act so as to rectified errors in certain entries with retrospective effect from the 1st day of January, 2020.

Clause 98 of the Bill seeks to revise the date of effect to the amendments made in the Fourth Schedule to the Central Excise Act vide notification number G.S.R. 978(E), dated the 31st December, 2019, issued in exercise of powers under section 3C thereof, so as to give effect to said amendments on and from the 1st day of January, 2020.

Central Goods and Services Tax

Clause 99 of the Bill seeks to amend section 7 of the Central Goods and Services Tax Act, 2017, with retrospective effect from the 1st July, 2017, by inserting a new clause (aa) in sub-section (1) thereof, so as to ensure levy of tax on activities or transactions involving supply of goods or services by any person, other than an individual, to its members or constituents or vice versa, for cash, deferred payment or other valuable consideration.

It is also proposed to insert an Explanation therein, to clarify that the person or its members or constituents shall be deemed to be two separate persons and the supply of activities or transactions inter se shall be deemed to take place from one person to another.

Clause 100 of the Bill seeks to amend section 16 of the Central Goods and Services Tax Act by inserting a new clause (aa) in sub-section (2) thereof, so as to provide that input tax credit on invoice or debit note may be availed only when the details of such invoice or debit note has been furnished by the supplier in the statement of outward supplies and such details have been communicated to the recipient of such invoice or debit note.

Clause 101 of the Bill seeks to omit sub-section (5) of section 35 of the Central Goods and Services Tax Act so as to remove the mandatory requirement of getting annual accounts audited and the reconciliation statement submitted by specified professional.

Clause 102 of the Bill seeks to substitute a new section for section 44 of the Central Goods and Services Tax Act 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 empowers the Commissioner to exempt a class of taxpayers from the requirement of filing the annual return.

Clause 103 of the Bill seeks to amend section 50 of the Central Goods and Services Tax Act to substitute the proviso to sub-section (1) so as to charge interest on net cash liability retrospectively with effect from the 1st July, 2017.

Clause 104 of the Bill seeks to amend section 74 of the Central Goods and Services Tax Act so as to make seizure and confiscation of goods and conveyances in transit a separate proceeding from the recovery of tax.

Clause 105 of the Bill seeks to amend section 75 of the Central Goods and Services Tax Act so as to insert an Explanation in sub-section (12) to clarify that “self-assessed tax” shall include the tax payable in respect of details of outward supplies furnished under section 37, but not included in the return furnished under section 39.

Clause 106 of the Bill seeks to substitute sub-section (1) of section 83 of the Central Goods and Services Tax Act so as to provide that provisional attachment shall remain valid for the entire period starting from the initiation of any proceeding under Chapter XII, Chapter XIV or Chapter XV till the expiry of a period of one year from the date of order made thereunder.

Clause 107 of the Bill seeks to insert a new proviso in sub-section (6) of section 107 of the Central Goods and Services Tax Act so as to provide that no appeal shall be filed against an order made under sub-section (3) of section 129, unless a sum equal to twenty-five per cent of the penalty has been paid by the appellant.

Clause 108 of the Bill seeks to amend section 129 of the Central Goods and Services Tax Act so as to delink the proceedings under that section relating to detention, seizure and release of goods and conveyances in transit, from the proceedings under section 130 relating to confiscation of goods or conveyances and levy of penalty.

Clause 109 of the Bill seeks to amend section 130 of the Central Goods and Services Tax Act, so as to delink the proceedings under that section relating to confiscation of goods or conveyances and levy of penalty from the proceedings under section 129 relating to detention, seizure and release of goods and conveyances in transit.

Clause 110 of the Bill seeks to substitute section 151 of the Central Goods and Services Tax Act so as to empower the jurisdictional commissioner to call for information from any person relating to any matters dealt with in connection with the Act.

Clause 111 of the Bill seeks to amend sub-section (1) of section 152 of the Central Goods and Services Tax Act so as to provide that no information obtained under sections 150 and 151 shall be used for the purposes of any proceedings under the Act without giving an opportunity of being heard to the person concerned.

Clause 112 of the Bill seeks to amend section 168 of the Central Goods and Services Tax Act so as to enable the jurisdictional commissioner to exercise powers under section 151 to call for information.

Clause 113 of the Bill seeks to omit paragraph 7 of Schedule II to the Central Goods and Services Tax Act, with retrospective effect from the 1st day of July, 2017, consequent to the amendments made in section 7.

Integrated Goods and Services Tax

Clause 114 of the Bill seeks to amend section 16 of the Integrated Goods and Services Tax Act, 2017 so as to make provisions for restricting the zero rated supply on payment of integrated tax only to specified class of taxpayers or specified supplies of goods or services. It further provides to link the foreign exchange remittance in case of export of goods with refund and further restricting zero rating of supplies made to special economic zone only when such supplies are for authorised operations.