Notified Section 49(10) and 50(3) of the CGST Act amended vide Finance Act, 2022

Background:

The CBIC vide Section 110(c) and 111 of the Finance Act, 2022 amended Section 49(10) and Section 50(3) and Section of the Central Goods and Services Tax Act, 2017 (“the CGST Act”) respectively.

Subsequently, the GST Council’s 47th meeting was held in Chandigarh on June 28th and 29th, 2022 under the chairmanship of the Union Finance & Corporate Affairs Minister Smt. Nirmala Sitharaman recommended to notify amendment in Section 50(3) of the CGST Act of the Finance Act, 2022 at the earliest.

The above-mentioned sections have been notified vide following notification:

Notification:

The CBIC vide Notification No. 9/2022- Central Tax dated July 05, 2022 notified amendment made in Section 49(10) and Section 50(3) and Section of the CGST Act vide Finance Act, 2022 as under:

• Amended Section 49(10) of the CGST Act reads as under:

“(10) A registered person may, on the common portal, transfer any amount of tax, interest, penalty, fee or any other amount available in the electronic cash ledger under this Act, to the electronic cash ledger for,––

(a) integrated tax, central tax, State tax, Union territory tax or cess; or

(b) integrated tax or central tax of a distinct person as specified in sub-section (4) or, as the case may be, sub- section (5) of section 25,

in such form and manner and subject to such conditions and restrictions as may be prescribed and such transfer shall be deemed to be a refund from the electronic cash ledger under this Act:

Provided that no such transfer under clause (b) shall be allowed if the said registered person has any unpaid liability in his electronic liability register.”

• Amended Section 50(3) of the CGST Act reads as under:

“50. Interest on delayed payment of tax.

(3) Where the input tax credit has been wrongly availed and utilised, the registered person shall pay interest on such input tax credit wrongly availed and utilised, at such rate not exceeding twenty-four per cent. as may be notified by the Government, on the recommendations of the Council, and the interest shall be calculated, in such manner as may be prescribed.”

Our comments:

Section 49(10) of the CGST Act is amended to allow transfer of amount available in electronic cash ledger under the CGST Act of a registered person to the electronic cash ledger under the CGST Act or the Integrated Goods and Services Tax Act, 2017 (“the IGST Act”) of a distinct person.

Accordingly, sub-rule (14) has been inserted under Rule 87 of the Central Goods and Services Tax Rules, 2017 (“the CGST Rules”) vide Notification No. 14/2022-Central Tax dated July 05, 2022 to read as under:

“Rule 87. Electronic Cash Ledger.-

(14) A registered person may, on the common portal, transfer any amount of tax, interest, penalty, fee or any other amount available in the electronic cash ledger under the Act to the electronic cash ledger for central tax or integrated tax of a distinct person as specified in sub-section (4) or, as the case may be, sub-section (5) of section 25, in FORM GST PMT- 09:

Provided that no such transfer shall be allowed if the said registered person has any unpaid liability in his electronic liability register.”

Further Form GST PMT-09 (i.e. Transfer of amount from one account head to another in electronic cash ledger) has been amended.

Further, Section 50(3) of the CGST Act is amended retrospectively w.e.f. July 01, 2017 so as to provide for levy of interest on input tax credit wrongly availed and utilized.

The above amendments will provide ease of business to the taxpayers.

The Notification can be accessed at - https://taxinformation.cbic.gov.in/view-pdf/1009412/ENG/Notifications