Section 148 of GST Act: Special procedure for certain processes

CGST Section 148: Special Procedure for Certain Processes

Overview: Section 148 of the Central Goods and Services Tax (CGST) Act, 2017, empowers the government to prescribe special procedures for certain classes of registered persons. These procedures may relate to aspects such as registration, return filing, tax payment, and administration.

Key Points:

1. Government’s Power:
   • The Central Government, based on the recommendations of the GST Council, can notify special procedures for certain registered taxpayers.
2. Classes of Registered Persons:
   • These special procedures may apply to specific categories of taxpayers, such as:
     • Composition taxpayers
     • E-commerce operators
     • Certain service providers
     • Persons involved in specific industries (e.g., exports, handicrafts)
3. Scope of Special Procedures:
   • The notification can cover:
     • Registration process – Simplified or different registration rules for specified persons.
     • Return filing – Different compliance rules for return submission.
     • Payment of tax – Special tax payment timelines or methods.
     • Administrative provisions – Custom rules for compliance and enforcement.
4. Conditions and Safeguards:
   • The government may impose conditions and safeguards to ensure proper implementation and prevent misuse.

Examples of Section 148 Implementation:

• QRMP Scheme (Quarterly Return, Monthly Payment):
  • Small taxpayers (turnover up to ₹5 crores) can file quarterly returns instead of monthly ones, with monthly tax payments.
  • This was introduced through Notification No. 81/2020-Central Tax under Section 148.
• Special Compliance for E-commerce Operators:
  • The government issued Notification No. 65/2017-Central Tax to provide separate compliance procedures for e-commerce aggregators.
• Extension of Due Dates for Certain Taxpayers:
  • The government has used Section 148 to extend return filing deadlines for specific industries or during extraordinary situations (e.g., COVID-19 pandemic).

Conclusion:

Section 148 of the CGST Act provides flexibility for the government to ease GST compliance for specific taxpayer categories. By issuing notifications, the government can tailor tax procedures to suit various industries or business models while ensuring compliance with GST regulations.

Notification No. 22/2024-Central Tax, S.O. 4373(E) Dated 08.10.2024

Issued Under Section 148 of the CGST Act, 2017

Objective of the Notification

This notification lays down a special procedure for rectification of orders issued under Section 73, Section 74, Section 107, or Section 108 of the CGST Act, 2017. It specifically applies to cases where input tax credit (ITC) was wrongly availed due to non-compliance with Section 16(4) but has now become eligible under Section 16(5) or Section 16(6).

Key Provisions of the Notification

1. Eligibility for Rectification:

• Applies to registered persons against whom a demand order has been issued under:
  • Section 73 (Demand for tax not paid or short paid without fraud)
  • Section 74 (Demand for tax not paid or short paid due to fraud, willful misstatement, or suppression of facts)
  • Section 107 (Appeals to Appellate Authority)
  • Section 108 (Powers of Revisional Authority)
• The demand was raised due to wrong availment of ITC in violation of Section 16(4).
• The ITC has now become eligible as per Section 16(5) or Section 16(6).
• The taxpayer has not filed an appeal against the order.

2. Filing of Application for Rectification:

• The registered person must file an application electronically on the GST portal.
• The application must be submitted within six months from the date of issuance of this notification.
• The taxpayer must upload the necessary details in Annexure A along with the application.

3. Authority Responsible for Rectification:

• The rectification of the order will be done by the same officer who issued the original order.
• The officer must decide on the application and issue a rectified order within three months from the date of application.

4. Procedure for Issuing Rectified Orders:

• If rectification is required, the authority must upload a summary of the rectified order electronically as follows:
  • FORM GST DRC-08 → If rectification relates to orders issued under Section 73 or 74.
  • FORM GST APL-04 → If rectification relates to orders issued under Section 107 or 108.

5. Scope of Rectification:

• Only applies to ITC demands due to non-compliance with Section 16(4).
• Does not apply to other demands or penalties.
• Rectification can only be made where ITC is now available under Section 16(5) or 16(6).

6. Principles of Natural Justice:

• If the rectification negatively impacts the taxpayer, the proper officer must provide an opportunity to be heard before finalizing the rectification.

Conclusion: This notification provides relief to taxpayers who were earlier denied ITC due to non-compliance with Section 16(4) but are now eligible under Section 16(5) or 16(6). By allowing rectification of demand orders, the government ensures fair treatment and avoids unnecessary litigation. Taxpayers must apply within the six-month window to avail this benefit.

Notification No. 04/2024-Central Tax, S.O. 85(E) dated 05.01.2024

Objective: This notification, issued under Section 148 of the Central Goods and Services Tax (CGST) Act, 2017, introduces a special procedure for manufacturers of specific goods (as listed in the appended Schedule) that use packing machines for filling and packing.

Key Provisions:

1. Mandatory Declaration of Packing Machines (FORM GST SRM-I)

All manufacturers covered under this notification must declare details of their packing machines on the GST portal.

• Existing Manufacturers: Must submit the details within 30 days from the notification’s effective date.
• Newly Registered Manufacturers: Must submit details within 15 days of obtaining GST registration.
• Installation of Additional Machines: Must be reported within 24 hours in PART (B) of Table 6 of FORM GST SRM-I.
• Change in Declared Machine Capacity: Must be updated within 24 hours in Table 6A of FORM GST SRM-I.
• Unique Machine Registration Number: Each machine will receive a unique registration number upon submission of details.
• Declaration to Other Government Agencies: If the manufacturer has already declared production capacity to other departments, it must be updated in Table 7 within:
  • 15 days of filing the declaration with the agency (if filed after the notification).
  • 30 days from the notification’s issuance (if filed before the notification).
• Disposal of Machines: If a machine is disposed of, details must be updated in Table 8 within 24 hours.

2. Special Monthly Statement (FORM GST SRM-II)

• Every manufacturer must submit a monthly statement (FORM GST SRM-II) on the GST portal.
• Due Date: 10th of the following month.

3. Chartered Engineer Certificate (FORM GST SRM-III)

• Manufacturers must upload a Chartered Engineer’s certificate verifying the declared packing machines.
• If any changes are made, a fresh certificate must be uploaded.

4. Effective Date:

• The notification will be effective from May 15, 2024.

Impact of the Notification:

• Increased Compliance: Manufacturers must maintain and report real-time data on packing machines.
• Enhanced Monitoring: Helps the government track production capacity and GST compliance.
• Preventing Tax Evasion: Ensures tax liability is accurately assessed based on machine capacity.