We are pleased to share our latest edition of Indirect Tax Newsletter December 2022 which includes detailed analysis of recent notifications/circulars, case laws and advance ruliungs.


S. No Reference Particulars
1 Notification No. 25/2022- Central Tax dated 13.12.2022 The due date for furnishing Form GSTR-1 for the month of November 2022 was extended to December 13, 2022 for registered persons whose principal business are in certain specified districts of Tamil Nadu.
2 Notification No. 26/2022- Central Tax dated 26.12.2022

Pursuant to the 48th GST Council Meeting, certain amendments have been made in the Central Goods and Services Tax Rules, 2017 ("CGST Rules"). Some of the important amendments are:

  • Rule 9 has been amended to provide that the application for registration will be approved only after physical verification of the premises (even after Aadhar authentication) if the said person is identified on the common portal based on data analysis and risk parameters.
  • Rule 12 has been amended to provide that a registered person can suo motu cancel TDS / TCS registration.
  • Rule 37 has been amended to provide that recipient needs to reverse Input Tax Credit ("ITC") only proportionate to the amount not paid to the supplier.
  • Rule 37A has been inserted to provide for reversal of ITC by the recipient by November 30, 2022 of the following year if Form GSTR 3B has not been furnished by the supplier by September 30, 2022 of the following year. If ITC is not reversed by November 30, 2022 the amount will be payable alongwith interest. When the supplier subsequently furnishes Form GSTR 3B, credit may be re-availed.
  • Rule 88C has been inserted to specify procedure for recovery of tax in case of difference in Form GSTR 1 and Form GSTR 3B, by such amount and such percentage as may be recommended by the GST Council. Where any amount remains unpaid after seven days of intimation or no explanation is furnished or the explanation is found to be acceptable, such amount shall be recoverable under section 79.
  • Rule 59 has been amended to provide that a person to whom an intimation is issued under Rule 88C would be subsequently barred from filing Form GSTR 1 for subsequent periods, unless he has furnished a reply explaining reasons for the difference or deposited the unpaid tax.
  • Rule 89 has been amended to specify the procedure for unregistered persons to claim GST refund.
  • Rule 108 has been amended to exclude the requirement of furnishing a certified copy of the order in case of filing of appeal when the order is uploaded in the GST portal. In case the order is not uploaded on the GST portal, a self-certified copy of the order may be furnished within a period of 7 days of filing the appeal.

Rule 109C has been inserted to permit withdrawal of appeals at any time before issuance of show cause notice by appellate authority or before issuance of order, whichever is earlier.

3 Notification No. 27/2022- Central Tax dated 26.12.2022 Rule 8(4A) was inserted vide Notification 26/2022 and provides for biometric- based Aadhaar authentication and other procedures in filing Form GSTR-1 . This Notification states that that the provisions of Rule 8(4A) of the CGST Rules shall only apply to the State of Gujarat.

Notification No. 12/2022-Central Tax (Rate) dated 30.12.2022

Notification No. 13/2022-Central Tax (Rate) dated 30.12.2022

The following rate changes have been made with effect from January 1, 2023:

  • Exemption has been granted to husk of pulses, along with chilka and concentrates, chuni or churi, and khanda used as "cattle feed".
  • GST Rate reduced from 18% to 5% in respect of Ethyl Alcohol that is sold to oil marketing companies or refineries to blend it with motor spirit or petrol.
  • GST rate of 12% would not be available for carbonated beverages of fruit drink or carbonated beverages with fruit juice. These products would be taxable at 28% (excl. compensation cess).

GST rate increased from 12% to 18% for pencil sharpeners.

5 Notification No. 14/2022- Central Tax (Rate) dated 30.12.2022 Sale of Mentha arvenis by an unregistered person to a registered person would be subject to reverse charge (similar to Mentha oil). Therefore, GST would be payable by the recipient.
6 Notification No. 15/2022- Central Tax (Rate) dated 30.12.2022
  • By way of Explanation, it has been clarified that GST exemption would be available if residential dwelling is rented to a GST-registered person in their "personal capacity" for their own use/account as a residence and not for business.
  • GST exemption has been withdrawn in respect of service by way of access to a road or a bridge on payment of annuity.
7 Circular No. 183/15/2022-GST dated 27.12.2022

The Circular clarifies the procedure to be followed in case of difference in ITC availed in Form GSTR-3B as compared to that reflected in Form GSTR-2A for FY 2017-18 and 2018-19:

  • A detailed procedure to be followed in the following specified scenarios which may have caused the mismatch:
    • Where supplier has not filed Form GSTR 1 but filed Form GSTR 3B.
    • Where supplier has filed Form GSTR 1 and Form GSTR 3B but has failed to disclose the particular supply.
    • Where supplier has wrongly reported B2B supply as B2C supply in Form GSTR 1.
    • Where wrong GSTIN of the recipient has been reflected in Form GSTR 1 [in this case, the jurisdictional tax authority of registered person whose GSTIN was mentioned wrongly would be intimated that ITC is to be disallowed].
  • It has been stipulated that:
    • Where the difference between ITC claimed in Form GSTR 3B and reflected in Form GSTR 2A in respect of a supplier exceeds INR 5 lacs: The registered person must produce a certificate for the concerned supplier from CA/CMA certifying that: (a) supplies have been actually made by the supplier to the registered person and (b) tax has been paid by the supplier in his return in Form GSTR 3B. Certificate issued by the CA/CMA shall contain UDIN which can be verified from the respective institute's website.

Where difference does not exceed INR 5 lacs: A certificate must be produced from the concerned supplier certifying that: (a) supplies have been made by the supplier to the registered person and (b) tax has been paid by the supplier in his return in Form GSTR 3B. No CA/CMA certificate is required.

It has been clarified that these instructions will only apply to ongoing proceedings in scrutiny/ audit/ investigation etc. and not to completed proceedings. These instructions will also apply in those cases where adjudication or appeal proceedings are still pending.

8 Circular No. 184/16/2022-GST dated 27.12.2022
  • Where the transportation of goods is outside India and the supplier and recipient are in India, the place of supply is the destination of goods as per Section 12(8) of the IGST Act. With respect to such transactions, it has been clarified that:
    • ITC of IGST paid would be available to the recipient.
    • The GST provisions do not restrict availment of ITC by the recipient located in India if the place of supply of the said input service is outside India.

The supplier must report the place of supply by selecting State Code "96 – Foreign Country" in Form GSTR 1.

9 Circular No. 185/17/2022-GST dated 27.12.2022
  • Section 75(2) of the CGST Act provides that where allegations of fraud, suppression are held by the Appellate Authority/Tribunal as not sustainable, then the officer must redetermine the duty in terms of Section 73(1). In relation to such situations, it has been clarified that:
    • The proper officer is required to issue an order for re- determination of tax within 2 years from the date of communication of the Appellate Authority's order. This re- determination order will be passed under Section 75(3).
    • As the normal time limit for issuance of show cause notice under Section 73 is 2 years and 9 months, re-determination would cover only those periods which are covered within the normal limitation period.

The proceedings for the period not covered within the aforesaid time limit would be dropped.

10 Circular No. 186/18/2022-GST dated 27.12.2022

The Circular has clarified the following issues:

  • No-claim bonus ("NCB"): Qua NCB, it has been clarified that:
    • There is no supply provided by the insured to the insurance company in not lodging an insurance claim. NCB cannot be treated as consideration for supply provided by the insured to the insurance company.
    • NCB amount is pre-disclosed in the policy document and therefore fulfils the conditions of Section 15(3) of the CGST Act. Therefore, clarified that NCB is an admissible deduction under Section 15(3) for the purpose of deduction from the value of insurance services.

E-invoicing: It has been clarified that exemption from e-invoices is applicable for the whole entity and not restricted to the nature of supply.

11 Circular No. 187/19/2022-GST dated 27.12.2022 GST dues are considered "operational debt" and the claim is required to be filed before the Resolution Professional under IBC. It has been clarified that in cases where demand for recovery has been issued in Form GST DRC 07/07A and where proceedings have been finalized against the corporate debtor under IBC reducing the amount of statutory dues, the jurisdictional Commissioner will issue an intimation in Form GST DRC-25 reducing the amount of demand. No fresh notice of demand is required to be issued. Corresponding amendments are being made in the GST Rules.
12 Circular No. 188/20/2022-GST dated 27.12.2022 Unregistered customers have been provided a facility for claiming GST refund under Section 54 in case of cancellation of contracts where the time limit for issuance of credit note has expired. The mechanism for claiming refund has been clarified in the Circular and the corresponding amendments have been made in the GST Rules.
13 Notification No. 62/2022-Customs dated 26.12.2022 Effectuates the first tranche of tariff concessions under India Australia Economic Cooperation and Trade Agreement.
14 Notification No. 63/2022-Customs dated 27.12.2022 Effectuates the fourteenth and final tranche of tariff concessions under India ASEAN Trade in Goods Agreement which provides deeper tariff concessions in respect of specified goods when imported from ASEAN under the India-ASEAN Free Trade Agreement.
15 Notification No. 64/2022-Customs dated 29.12.2022 Effectuates the second tranche of tariff concessions under India Australia Economic Cooperation and Trade Agreement.
16 Notification No. 65/2022-Customs dated 29.12.2022 Amends Notification Nos. 48/2021-Customs dated 13.10.2021 and 49/2021 – Customs dated 13.10.2021 to extend the existing concessional import duties on specified edible oils and lentils upto 31.03.2024.
17 Notification No. 103/2022- Customs (N.T.) dated 09.12.2022 Effectuates Exports by Post (Amendment) Regulations, 2022 wherein the appended forms Postal Bill of Exports ("PBE") PBE-I and PBE-II were substituted with a new format. The Notification also expanded the scope of the Regulations to e-commerce conducted through various electronic means.
18 Notification No. 104/2022- Customs (N.T.) dated 09.12.2022

Provides for the Postal Export (Electronic Declaration and Processing) Regulations, 2022 under which any person holding a valid Import-Export Code could export goods in furtherance of business through a foreign post office appointed by the Board under Section 7(1)(e) of the Customs Act, 1962.

Further, the Regulations provide for filing of Forms PBE-III and PBE-IV for export of goods through e-commerce.

19 Notification No. 111/2022- Customs (N.T.) dated 20.12.2022 Amends Notification No. 58/2021-Customs (N.T.), dated the 01.07.2021 to notify Agreement or Arrangement on Cooperation and Mutual Administrative Assistance (CMAA) in Customs Matter between India and Japan through an insertion at Sr. No. 9A and between India and Philippines at Sr. No. 19A.
20 Notification No. 112/2022- Customs (N.T.) dated 22.12.2022 Customs Tariff (Determination of Origin of Goods under the India-Australia Economic Cooperation and Trade Agreement) Rules, 2022 were notified which provides for rules on determination of origination of various types of goods, calculation of qualifying value content etc.
21 Notification No. 113/2022- Customs (N.T.) dated 30.12.2022 The tariff value of edible oils, brass scrap, areca nut, gold and silver were fixed vide substituting the tables in the original Notification No. 6/2001-Customs (N.T.), dated 03.08.2001.
22 Circular No. 25/2022- Customs dated 09.12.2022 Clarifies the procedure and implementation of Postal Bill of Exports (PBE) Automated System which contains provisions to facilitate the processing of commercial post exports by automating the entire procedure and seamlessly connecting the postal network to the notified foreign post offices. This enables Micro, Small and Medium Enterprises to export to global markets using e- commerce or other regular channels.
23 Instruction No. 34/2022- Customs dated 30.12.2022 Provides for the strict import regulation of certain animal feed additives/premix/supplements and antibiotics to be used in animal feed. The manufacturer is also required to label the final pack regarding its ingredients and the mandatory requirement of respective withdrawal period, if any, indicated against a particular item.
24 Notification No. 04/2022 - Central Excise (N.T) dated 01.12.2022 Appoints the Commissioner of Central Excise and Service Tax (Appeals) as Central Excise officer for the entire territorial jurisdiction of the Principal Chief Commissioner/Chief Commissioner of Central Excise and Service Tax for the purpose of passing Orders-in-Appeal for Central Excise and Service Tax for the appeals filed after 30.06.2017.

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