CBIC issues notifications pursuant to recommendations made in the 54th GST Council meeting

This Tax Alert summarizes recent Notifications^[1] issued by Central Board of Indirect Taxes and Customs (CBIC) inter alia amending Central Goods and Services Tax Rules, 2017 (CGST Rules) pursuant to recommendations made in the 54th Goods and Services Tax (GST) Council meeting.

Key amendments are as follows: 

• Rule 47A is inserted to prescribe a time limit of 30 days from the date of receiving supply of goods or services, for issuance of self-invoice by a registered person.
  
• Rule 96(10), 89(4A) and 89(4B), which restricts refund in cases where benefit of specified concessional/ exemption notifications is availed on inward supplies, are omitted.
  
• Rule 164 is inserted along with forms for providing procedure and conditions for availment of benefit under Section 128A.
  
• Special procedure has been notified for rectifying orders with confirmed demands on account of ineligible ITC due to contravention of Section 16(4), but now eligible under newly inserted Section 16(5) or 16(6).
  
• Supply of metal scrap and services by way of renting of any property other than residential dwelling, provided by any unregistered person to any registered person will now be taxed under RCM.
  

Comments:

• Omission of Rule 89(4A), 89(4B) and 96(10) is likely to remove complexities and challenges faced by the exporters in claiming refund. However, it would be essential to assess the implications on exports made post omission of said rules where benefit of exemption on inputs procured under earlier provisions had been taken. 
  
• Recently, the Madras High Court [2024-VIL-1055-MAD] instructed the Revenue to issue separate Show Cause Notices (SCNs) for each financial year, thereby allowing the taxpayer to avail the benefit of amnesty scheme. Considering Rule 164, which mandates taxpayers to pay the total amount of tax demanded in a consolidated notice or order, businesses might contest this requirement based on the judgment.
  
• Unlike Section 31(4) and 31(5), the newly inserted Rule 47A under Section 31(3)(f) does not explicitly address the time limit to issue self-invoice in case of continuous supply of goods or services attracting RCM.
  
• While RCM notification has been amended to include "services by way of renting of any property other than residential dwelling", the press release issued pursuant to the 54th GST Council meeting, mentions Council’s recommendation to include only renting of commercial property under RCM. 
  
• Taxpayers may be required to analyse the scope of the term “commercial property” to evaluate whether leasing of industrial plots, factory buildings, commercial lands etc. should be considered for the purpose of RCM.

[1] Notification Nos. 20 to 23/2024 - Central Tax dated 8 October 2024
Notification Nos. 24 and 25/2024 - Central Tax dated 9 October 2024
Notification Nos. 05 to 09/2024 - Central Tax (Rate) dated 8 October 2024