Decoding Sections 108, 109, and 113 to 122 of the Finance Act, 2021
As per Notification No. 39/2021 issued on 21st Dec 2021, Sections 108, 109, and 113 to 122 of the Finance Act, 2021 (FA, 2021 will take effect on January 1, 2022.
Decoding Sections 108, 109, and 113 to 122 of the Finance Act, 2021
Decoding Section 108
The clause (aa) shall be introduced and shall be regarded to have been inserted with effect from the 1st day of July 2017, in section 7(1), after clause (a), in the CGST Act, 2017 (12 of 2017).
Explanation – the activities or transactions, by a person, other than an individual, to its members or constituents or vice versa, for cash, deferred payment or other valuable consideration.
Decoding Section 109
In section 16(2) of the CGST Act, after clause (a), the following clause should be inserted: “(aa) the details of the invoice or debit note referred to in clause (a) have 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 in the manner specified under section 37;”
Explanation- According to the notification – (a) ITC will be allowed only when it is reflected in GSTR-2B or 2A (notification doesn’t make it clear it’s still ambiguous, But to be on the safer side, we should consider 2B as 2A can change). (b) No more 5% leverage.
Decoding Section 113
Section 74 Amendment
Explanation – Substitute the words and figures “sections 122, 125, 129, and 130” for the words and figures “sections 122 and 125” in clause (ii) of Explanation 1.
Decoding Section 114
Section 75 Amendment – the following Explanation shall be written in section 75 of the CGST Act, in sub-section (12)
Explanation – The word “self-assessed tax” shall include the tax payable in respect of details of outward supplies supplied under section 37 but not included in the return furnished under section 39 for this sub-section.’
Decoding Section 115
Section 83 Amendment – section 83(1) of the CGST Act shall be replaced with the following subsection:
Explanation – “(1) If the Commissioner believes that it is necessary to protect the interest of the Government revenue after the initiation of any proceeding under Chapter XII, Chapter XIV, or Chapter XV, he may, by order in writing, attach provisionally any property, including bank accounts, belonging to the taxable person or any person specified in sub-section (1A) of section 122, in such manner as may be prescribed.”
Decoding Section 116
Section 107 Amendment. – The following proviso shall be introduced in sub-section (6) of section 107 of the CGST Act:
Explanation – “Provided that no appeal shall be brought against an order made under section 129(3) until the appellant has paid a sum equal to twenty-five percent of the penalty.”
Decoding Section 118
Section 130 Amendment
a) in sub-section (1), the term “Where” should be replaced for the words “Notwithstanding anything contained in this Act, if”;
b) in sub-section (2), in the second proviso, the words “penalty equivalent to 100% of the tax due on such products” should be replaced for the words, brackets, and numbers “amount of penalty leviable under sub-section (1) of section 129”;
c) Sub-section 3 of Section 130 shall be omitted.
Decoding Section 119
Section 151 is being replaced by a new section. The following section must be replaced for section 151 of the CGST Act:-
“151. The ability to request information. – By order, the Commissioner or an official authorized by him may instruct any person to provide information relevant to any subject dealt with under this Act, within the time, in the form, and the manner stated therein.”
Decoding Section 120
Section 152 Amendment
a) In paragraph (1), –
(i) The phrase “of any individual return or part thereof” shall be deleted;
(ii) The words “without giving an opportunity of being heard to the person concerned” should be included after the words “any proceedings under this Act”;
b) Section 152(2) shall be omitted.
Decoding Section 121
Section 168 Amendment
(i) The words, brackets, and figures “sub-section (1) of section 44” should be replaced with the words and figures “section 44”;
(ii) The words, brackets, and figures “section 151(1)” shall be deleted.
Decoding Section 122
Modifications to Schedule II. – Paragraph 7 of Schedule II of the CGST Act must be omitted and assumed to have been omitted with effect from July 1, 2017.
