Taxmann’s Budget Highlights 2022-23

The Finance Minister Nirmala Sitharaman presented the Union Budget for 2022-23 on February 1 in a speech spanning an hour and thirty minutes. In this article, we present to you a detailed description of the biggest highlights of the Union Budget 2022-23.

Table of Content

1. Tax Rates Reckoner

2. Rates of Surcharge

3. Tax Rates

4. Tax on Virtual Digital Assets

5. Income under the Head Salaries

6. Income from Business or Profession

7. Charitable Trust

8. Computation of Income

9. TDS/TCS

10. Return of Income

11. Appeals and Assessment

12. Unexplained or Undisclosed Income

13. Penalties

14. Miscellaneous

15. Amendments Proposed under the GST Laws

16. Amendments Proposed under the Customs Laws

1. Tax Rates

1.2 Individuals or HUF opting for Alternate Tax Regime *(Section 115BAC)

* Rebate under section 87A is available to resident individuals whose total income during the previous year does not exceed Rs. 5,00,000.  Rebate is available to the extent of Rs. 12,500 only and no rebate will be available if total income exceeds Rs. 5,00,000.

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2. Rates of Surcharge

2.1 Rate of Surcharge in the hands of the Individual, HUF, AOP (Except AOP with all members as company) , BOI or AJP

** From A.Y. 2023-24 onwards, the surcharge rates for AOP with all members as a company, cannot exceed 15%.

 2.2 Rate of Surcharge in case of any other assessee

*Health and Education Cess at the rate of 4% shall be charged on aggregate of income-tax and surcharge.

3. Tax Rates

3.1 Surcharge on long-term capital gain

The Finance Bill proposes that the rate of surcharge on long-term capital gain shall not exceed 15%. Earlier, this benefit was available only in respect of long-term capital gain arising from the transfer of listed equity shares, equity-oriented mutual funds and units of business trust. Now the surcharge rate cannot exceed 15% in respect of long-term capital gain arising from the transfer of any capital asset.

3.2 Surcharge rate in case of AOP

In case of an Association of Persons (AOP) consisting of only companies as its members, the surcharge rate on the amount of Income-tax shall not exceed 15%. Thus, for AY 2023-24, the rate of surcharge in case of such AOPs shall be as follows:

3.3 Surcharge rate in case of co-operative societies

The rate of surcharge in case of co-operative societies which are not opting for section 115BAD is reduced from 12% to 7% where the income exceeds Rs. 1 crore but does not exceed Rs. 10 crores. The surcharge rate shall be 12% where income of co-operative societies exceeds Rs. 10 crores.

3.4 AMT rate reduced to 15% in case of co-operative societies

Rate of Alternate Minimum Tax (AMT) is reduced from 18.5% to 15% in case of co-operative societies.

3.5 No concession in tax rate on dividends received from foreign company

Currently, the dividend income received by an Indian company from a foreign company in which the said Indian company holds 26% or more in nominal value of equity shares is taxed at a concessional rate of 15%. The said concessional tax rate shall not apply from the Assessment year 2023-24 onwards.

3.6 Scope of Bonus Stripping and Dividend Stripping provisions widened

The anti-avoidance provisions of bonus stripping are proposed to be made applicable to securities and units of business trusts such as Infrastructure Investment Trust (InvIT), Real Estate Investment Trust (REIT) and Alternative Investment Funds (AIFs). Thus, the losses shall be now disallowed in the hands of unitholders of InvIT, REIT or AIFs on account of such arrangements.

3.7 Section 115BAB

The last date for commencement of manufacturing or production under Section 115BAB has been extended from 31-03-2023 to 31-03-2024.

4. Tax on Virtual Digital Assets

• A new scheme has been proposed for taxation of virtual digital assets with effect from Assessment Year 2023-24. All gains arising from the transfer of digital assets on or after 01-04-22 shall be governed by this scheme.
• Virtual Digital Assets cover cryptocurrencies, NFTs, and any other digital asset notified by the Central Govt. The Govt. has the power to exclude any digital asset from the definition of a virtual digital asset.
• A new Section 115BBH has been proposed to be inserted. It provides that the income from the transfer of any virtual digital asset shall be taxed at the rate of 30%. However, no deduction in respect of any expenditure (other than cost of acquisition) or allowance or set-off of any loss shall be allowed to the assessee.
• Further, no set-off of any loss arising from the transfer of virtual digital asset shall be allowed against any income computed under any other provision of the Act and such loss shall not be allowed to be carried forward to subsequent assessment years.
• A new Section 194S has been proposed to be inserted. It provides for deduction of tax at the rate of 1% from payment to a resident person on transfer of virtual digital asset.
• The meaning of ‘property’ for Section 56(2)(x) shall now include virtual digital asset. Thus, where such assets are received without consideration or inadequate consideration, it shall be taxable in the hands of the recipient if it exceeds Rs. 50,000.

5. Income under the Head Salaries

5.1 No tax on sum paid by employer for Covid-19 treatment

Section 17 is amended to provide that any sum paid by the employer towards the medical treatment of an employee or his family member in respect of any illness relating to COVID-19 shall not be taxable as perquisite.

5.2 Deduction for NPS in case of State Govt. Employees

The threshold limit for deduction in respect of employer’s contribution to NPS is increased to 14% of salary in the case of State Government employees 

6. Income from Business or Profession

6.1 Conversion of outstanding Interest

Section 43B is amended to provide that conversion of the outstanding interest liability into debentures is not an actual payment and, thus, cannot be claimed as a deduction.

6.2 Deduction under Section 37(1)

Section 37 is proposed to be amended that any expenditure incurred to provide any benefit or perquisite to a person shall not be deductible if acceptance of such benefit or perquisite by such person violates any law governing the conduct of such person in India or outside India. For instance, medical practitioners are prohibited from taking any gifts from pharmaceutical companies. Thus, if a pharmaceutical company gifts something to a medical practitioner, it shall not be allowed as deduction.

6.3 No deduction of surcharge or cess

As per Section 40(a)(ii), no deduction is allowed for payment of any rate or tax while computing the income from a business or profession. A new explanation is inserted to clarify that the term “tax” includes and shall be deemed to have always included any surcharge or cess. Thus, no deduction shall be allowed for surcharge and cess. It is a clarificatory amendment applicable retrospectively from 01-04-2005.

 7. Charitable Trust

7.1 Application of income to be allowed on a payment basis

Trust or institution are required to apply 85% of their income for the specified purposes. Any sum shall be considered an application of income in the previous year in which it is actually paid irrespective of the year in which the liability to pay such sum was incurred by such trust according to the method of accounting regularly employed.

7.2 Computation of income of trusts in certain situations

Provisions have been introduced for taxation of trusts having commercial receipts over 20% of the annual receipts in violation of the provisions of the proviso to section 2(15) or who are not getting the books of account audited or who are not filing the return of income. The taxable income in such cases shall be computed after allowing a deduction for the expenditure (other than capital expenditure) incurred in India, for the objects of the trust or institution.

7.3 Special tax rate

The following incomes of the trusts or institutions shall be chargeable to tax at the special rate of 30% under the newly proposed section 115BBI:

• • Income accumulated or set apart in excess of 15%.
  • Deemed income under Section 11(1B) or Section 11(3).
  • Investment of funds in an unspecified manner.
  • Benefit to the interested person.
  • Income applied outside India.

7.4 Accreted Income

Provisions of sections 115TD, 115TE and 115TF relating to taxation of Accreted Income are also made applicable to trusts or institutions under Section 10(23C).

7.5 Institutions claiming exemptions under Section 10(23C)

• • Restrictions have been imposed on institutions claiming exemption under Section 10(23C) to pass on any unreasonable benefit to the trustee or any other specified person.
  • Such institutions have been allowed to accumulate income for application in subsequent years. They are required to furnish a statement stating the purpose for which the income is being accumulated and the period for which the income is to be accumulated or set apart, which shall in no case exceed 5 years. Money accumulated to be invested in the forms or modes specified in Section 11(5).
  • Filing of Return of income under Section 139(4C) is mandatory to claim the exemption under Section 10(23C).

7.6 Maintenance of books of accounts

If the total income of a trust or institution, without giving effect to the provisions of Section 10(23C) or Sections 11 and 12, exceeds the maximum amount which is not chargeable to tax, such trust or institution shall keep and maintain prescribed books of account.

7.7 Taxability of income accumulated under Section 11(2)

Any income accumulated in Section 11(2) which is not utilized for the purpose for which it is so accumulated or set apart shall be deemed to be the income of such person.

7.8 Cancellation of registration of Trusts

A PCIT/CIT can cancel the trust registration if he notices one or more specified violations during any previous year or has received a reference from the AO or case selected as per the board’s risk management strategy. The PCIT/CIT can call for the documents to satisfy himself about the occurrence or otherwise of any specified violation. The cancellation order shall be passed after affording a reasonable opportunity of being heard.

7.9 Donation for renovation and repair of temples, mosques, gurudwaras, churches

If the property held under a trust or institution includes any temple, mosque, gurdwara, church or other place notified under Section 80G(2)(b), any sum received by such trust or institution as a voluntary contribution for renovation or repair of such temple, mosque, gurdwara, church or other place, may, at its option, be treated by such trust or institution as forming part of the corpus of the trust or the institution.

8. Computation of Income

8.1 Section 14A disallowance

Section 14A is proposed to be amended to clarify that disallowance shall be made for any expenditure incurred in relation to an exempt income even if no exempt income has accrued or arisen or has been received during the said previous year.

8.2 Tax relief for Covid related compensation

The Government had issued a Press Release, dated 25-06-2021 providing that taxpayers receiving financial help from their employers and well-wishers for meeting the expenses incurred on treatment of Covid-19 would get an income tax exemption. Thus, any amount received from the employer or any other person for treatment of Covid-19 would be tax-free.

Further, if a taxpayer died due to COVID, then any financial assistance received by his family member shall be exempt without any limit where the financial assistance is received from the employer of the deceased. However, where the financial assistance is received from any other person, the exemption amount shall be limited to Rs. 10 lakh in aggregate.

To give effect to such press release, the amendments have been made under section 17 and section 56 of the Income-tax Act.

8.3 Relaxation in Section 80DD

Section 80DD allows a deduction to a resident individual or HUF who has incurred any expenditure for the treatment of a dependent person with a disability. The deduction is also allowed for the amount paid or deposited in a scheme of LIC or another insurer for maintenance of such a dependent person. However, the following two conditions have to be satisfied to claim the deduction:

• The scheme must provide for payment of the annuity or lump sum amount for the benefit of a dependent only in the event of the death of such resident individual or member of HUF; and
• Assessee nominates either the dependent or any other person or a trust to receive the payment on his behalf for the benefit of the dependent.

These conditions are harsh and illogical as a person cannot get the lump sum or annuity amount of an insurance policy till he is alive. Even if he has paid all premiums and needs the money for the benefit of a dependent person, he cannot get the maturity amount. The Finance Bill has addressed this issue and made requisite amendments under Section 80DD.

8.4 Withdrawal of exemption under sections 10(8), 10(8A), 10(8B) and 10(9)

Section 10(8) provides an exemption to the income of an individual assigned duties in India in connection with any co-operative technical assistance programmes and projects. Such co-operative technical assistance programmes and projects must be in accordance with an agreement entered by the Central Government and the Government of a foreign state. Further, exemptions under sections 10(8A), 10(8B) and 10(9) are allowed to a consultant, his employees and their family members

If under a tax treaty, India gets a right to tax a particular income, and the other country is expected to relieve double taxation by exemption or credit method, providing exemption by India amounts to surrender of the right of taxation by India in favour of the other country. Thus, it is proposed that the above provisions shall not apply to remuneration, fee or income of the previous year relevant to the assessment year beginning on or after the 1st day of April 2023.

 9. TDS/TCS

9.1 TDS to be deducted from benefit or perquisite

Tax is to be deducted at the rate of 10% by the person responsible for providing to a resident any benefit or perquisites arising from carrying out a business or exercising a profession. No tax is to be deducted if the value or aggregate value of the benefit or perquisite paid or likely to be paid to a resident does not exceed Rs. 20,000 during the financial year.

9.2 Stamp duty value should be considered for TDS under Section 194-IA

Section 194-IA is amended to provide that in case of transfer of an immovable property (other than agricultural land), tax shall be deducted at the rate of 1% on sum paid or credited to the seller or the stamp duty value of such property, whichever is higher. Earlier, stamp duty value wasn’t considered for TDS under this provision.

9.3 Higher rates in case of non-filers of return

Provisions of sections 206AB and 206CCA provide for deduction or collection of tax at higher rates. The provisions apply to a specified person who has not filed the return of income for 2 assessment years relevant to the previous years immediately before the previous year in which tax is required to be deducted. It is proposed to reduce two years requirement to one year under sections 206AB and 206CCA.

Further, to reduce the additional burden on individuals and HUF, it is proposed that the provisions of section 206AB will not apply in relation to transactions on which tax is to be deducted under sections 194-IA, 194-IB, 194M and 194S.

9.4 Refund of TDS

Section 248 provides that where a tax is deductible on any income (other than interest) under Section 195, which is to be borne by the payer, and he claims that no tax was required to be deducted, he can prefer an appeal to Commissioner (Appeals) under Section 248 for a declaration that no tax was deductible. However, such an appeal can be filed only if such tax has been paid to the credit of the Central Government.

A taxpayer has no recourse to approach the Assessing Officer to obtain a refund of such tax. The Finance Bill 2022 has proposed to insert a new Section 239A. It provides that for the refund of such tax, an application is required to be filed before the Assessing Officer. AO shall pass an order to allow or reject the application. Further, if such person is not satisfied with the order of the AO, he can file an appeal before the Commissioner (Appeals) under section 246A.

It is also proposed to amend section 248 to provide that the provisions of section 248 will not apply in cases where the date of tax payment, to the credit of Central Government is on or after 01-04-2022.

9.5 Interest for default

The provisions relating to TDS and TCS have been amended to provide that where any order is made by the Assessing Officer for the default in deduction or deposit of TDS or TCS, the interest shall be paid by the person in accordance with the said order

10. Return of Income

10.1 Mandatory return filing by institutions

Filing of Return of income under Section 139(4C) is mandatory for the institutions to claim the exemption under Section 10(23C).

10.2 Updated income-tax return

Sub-section (8A) has proposed to be inserted into Section 139 to provide an additional 2 years to a taxpayer to update his return. Updated returns can be filed irrespective of the fact whether the taxpayer has earlier filed the original, revised or belated return in respect of the relevant assessment year.

However, an updated return cannot be filed if it is a return of a loss or has the effect of decreasing the tax liability or increasing the refund. Further, an updated return cannot be filed in search and seizure cases and other specified circumstances.

An amount equal to 25% or 50% as additional tax on the tax and interest due on the additional income shown in the updated return would be required to be paid depending upon the time of filing of the updated return. A new section 140B is inserted to provide the method for computation and payment of self-tax assessment on income shown in the updated return.

Consequential amendments have also been made to Section 234A, Section 234B and Section 234C to charge interest in such cases. 

11. Appeals and Assessement

11.1 Personal hearing is mandatory if requested by the assessee

The provisions of faceless assessment under section 144B has been proposed to be amended to allow mandatory personal hearing if it is requested by the taxpayer. The Income-tax authority shall allow personal hearing through video conferencing or video telephony.

11.2 Time-limit to issue re-assessment notices

No notice can be issued for re-assessment if 3 years have elapsed from the end of the relevant assessment year. Amendment has been proposed that a notice under Section 148 shall be issued only for the relevant assessment year after 3 years but prior to 10 years from the end of the relevant assessment year where the Assessing Officer has in his possession books of account or other documents or evidence which reveal that the income chargeable to tax, represented:

• in the form of an asset; or
• expenditure in respect of a transaction or in relation to an event or occasion; or
• an entry or entries in the books of account,

which has escaped assessment, amounts to or likely to amount to Rs. 50 lakh or more.

11.3 Scope of information suggesting that income has escaped assessment widened

In the following situations, the information shall be deemed to be suggesting that income has escaped assessment:

• • Any information flagged in the case of the assessee for the relevant assessment year in accordance with the risk management strategy formulated by the Board from time to time;
  • Any audit objection to the effect that the assessment in the case of the assessee for the relevant assessment year has not been made in accordance with the provisions of this Act;
  • Any information received under an agreement referred to in section 90 or section 90A of the Act;
  • Any information made available to the Assessing Officer under the scheme notified under section 135A;
  • Any information which requires action in consequence of the order of a Tribunal or a Court.

11.4 No appeal on identical issues

A new section 158AB is proposed to be inserted. It provides that where any question of law arising in the case of an assessee is already raised in his case or in the case of any other assessee for an assessment year, which is pending before the jurisdictional High Court or the Supreme Court, then no appeal shall be filed until the decision on the question of law becomes final in the other case.

11.5 Revisionary Power under Section 263

The provisions of section 263 has been proposed to be amended to allow the Principal Chief Commissioner, Chief Commissioner, Principal Commissioner or Commissioner who is assigned the jurisdiction of transfer pricing for exercising jurisdiction under section 263 on order passed by the Transfer Pricing Officer (TPO).

Consequential changes are also be made in the provisions of section 153 to provide two months to the Assessing Officer to give effect to the order of TPO consequent to the directions in the revision order

11.6 Order giving effect to order passed by the DRC

Section 245MA is amended to enable the Assessing Officer to pass an order giving effect to the resolution of dispute by the DRC.

11.7 Extension in time-limit to issue directions for implementing faceless regime

The faceless regime was introduced under sections 92CA, 144C, 253 and 264A through the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 and under section 255 through Finance Act, 2021. To implement the faceless regime, the said sections provide that CBDT will issue directions on or before 31-03-2022. In the case of the Appellate Tribunal, the said date is 31-03-2023. It is proposed to extend the date for issuing directions under all the above provisions till 31st March 2024.

11.8 No requirement to obtain approval for 148 notice

The requirement for approval to issue a notice under section 148 shall not be required if the Assessing Officer has passed an order under 148A(d) with prior approval.

11.9 No approval is required for the procedure before issuing a notice

Section 148A provides that the Assessing Officer shall conduct inquiries, if required, and provide an opportunity to be heard to the assessee with the prior approval of the specified authority. Now, the requirement of approval of specified authority is omitted.

11.10 Prior Approval of higher Authority is required in certain cases

No order of assessment or reassessment or recomputation shall be passed by an Assessing Officer below the rank of Joint Commissioner, in respect of an assessment year to which clause (i) or clause (ii) or clause (iii) or clause (iv) of Explanation 2 to Section 148 apply except with the prior approval of the Additional Commissioner or Additional Director or Joint Commissioner or Joint Director.

12. Unexplained or Undisclosed Income

12.1 Person giving loan or borrowing is required to explain source of income

The nature and source of any sum, whether in the form of a loan, borrowing or any other liability, shall be treated as explained only if the source of funds is explained in the hands of the creditor. However, this onus would not apply if the creditor is a well-regulated entity, i.e., it is a Venture Capital Fund, Venture Capital Company registered with SEBI.

12.2 No set-off of loss against undisclosed income discovered during search

No set-off of any loss or unabsorbed depreciation shall be allowed against undisclosed income discovered consequent to a search initiated under section 132, a requisition made under section 132A, or a survey conducted under section 133A.

13. Penalties

13.1 Penalty for passing unreasonable benefits to trustee or specified persons

New Section 271AAE is proposed to be introduced for a penalty on trusts or institutions covered under Section 12AB or Section 10(23C). The penalty shall be equal to the amount of income applied by such trust or institution for the benefit of a specified person if the violation is noticed for the first time during any previous year. The penalty shall be twice the amount of such income where the violation is noticed again in any subsequent year.

13.2 Penalties under Sections 271AAB, 271AAC and 271AAD

The provisions of Sections 271AAB, 271AAC, and 271AAD give powers to the Assessing Officer to levy penalties in cases related to undisclosed income, unexplained credits or expenditures, or deliberate falsification or omission in books of accounts. To improve deterrence against non-compliance among taxpayers, amendments have been proposed under these sections to enable the Commissioner (Appeals) also to levy penalties.

13.3 Penalty under Section 272A

Section 272A levies a penalty of Rs. 100 per day for failure to answer questions, sign statements, furnish information, returns or statements, allow inspections etc. The CAG, in a report, has commented that the penalty of Rs 100 is too low. Further, it had not been increased since the section was introduced in 1999. Thus, the Finance Bill has proposed increasing the penalty amount to Rs 500 from the existing sum of Rs 100.

14. Miscellaneous

14.1 Recovery of tax due from private company

Section 179 enables the Income-tax authorities to recover the tax of a private company from its directors if such tax cannot be recovered from the company itself. The section makes each director of the company jointly and severally liable for the payment of such tax with certain conditions.

The section’s title inadvertently refers to the ‘liability of directors of a private company in liquidation.’ However, the provisions of the section are not conditional upon the company being in liquidation and make no reference to liquidation.

Thus, to make the title of the section uniform with its provisions, it is proposed to amend the title of the section to ‘Liability of directors of private company.’

14.2 Reporting by producers of cinematograph films

The producer of cinematographic films shall furnish within 30 days from the end of the financial year or from the date of completion of the film, whichever is earlier, a statement containing particulars of aggregate payments over Rs. 50,000 made by him or due from him to each person engaged by him.

15. Amendments proposed under the GST laws

• • The Finance Bill has proposed the amendment in respect of below-mentioned scenarios for extending the time limit up to 30^th November following the end of the relevant financial year or date of furnishing the relevant annual return, whichever is earlier:
  • Time limit of availing Input Tax Credit
  • Time limit for reporting Credit Note transactions in Form GSTR 3B
  • Rectification of errors or omission or reporting of incorrect particulars in Form GSTR 1, Form GSTR 3B and Form GSTR 8
  • Retrospective amendment (with effect from July 01, 2017) has been proposed for levying interest on Input Tax Credit (‘ITC’) wrongly availed and utilized. The interest on such ITC would be 18% p.a. (instead of 24% p.a.). This proposed amendment seems to be in line with the judgement of Hon’ble Madras High Court in case of F1 Auto Components Private Limited vs State Tax officer, Chennai [2021] 128 taxmann.com 342 (Madras).
  • A new condition is proposed to be inserted to provide that the registered person would not be allowed to file Form GSTR 1 unless he files the Form GSTR-1 for any of the previous tax periods. Further, Form GSTR-3B would not to be allowed to be filed unless the Form GSTR-1 for the current tax period is not furnished
  • In order to bring the GST Act in line with the ongoing return filing system, the Finance Bill has proposed amendments in the following provisions relating to returns:
  • Section 37 and Section 38 has been amended to do away with two-way communication process in return filing
  • Concept of matching of returns would be no more as Section 42, Section 43 and Section 43A has been proposed to be omitted
  • The Finance Bill, 2022 has proposed to substitute Section 38. In terms of proposed amendment, the Form GSTR-2B would provide the details of supplies where ITC would be available and where ITC cannot be availed. The proposed provision has provided various scenarios where ITC can be restricted (such as where there is a default in payment of tax and such default is continued for a period to be prescribed, ). Further, it has been provided that the recipient cannot avail ITC in these cases.
  • The concept of provisional ITC has been proposed to be removed as the matching of returns would no more be there. The ITC taken in the electronic credit ledger would be a final ITC of the registered person. Further, the proposed provision also provides that where the supplier has not paid the tax, the recipient would be required to reverse the ITC of the same along with the interest. The ITC can be re-availed once the supplier pays the tax.
  • CGST Act is proposed to be amended to allow transfer of cash balance of CGST and IGST available in electronic cash ledger between distinct persons having same PAN. No such transfer would be permitted where there is unpaid liability in electronic liability ledger of the transferor. The amendment has been carried out in view of the decision taken by the GST Council in its 45th meeting.
  • Currently the law enables the Proper officer to withhold or deduct the refund amount relating to unutilized input tax credit in specified cases. An amendment has been proposed to extend such power in respect of all types of refunds.
  • A new clause is proposed to be inserted in the definition of relevant date for refund filing purposes relating to supplies made to SEZ Unit/Developer. It has been provided that the relevant date relating to supplies made to SEZ unit/developer would be computed from the due date of furnishing Form GSTR 3B.
  • Due date of filing From GSTR-5 by Non-Resident Taxable Person (‘NRTP’) has been proposed to be changed from 20th to 13th of subsequent month
  • Amendment has been proposed to provide legislative power to prescribe the extent up to which the credit can be used by a registered person from the electronic credit ledger for paying the tax. The proposed amendment seems to have provided a statutory backup to the existing Rule 86B of the CGST Rules.
  • Services by way of grant of alcoholic liquor licence by the State Government is currently neither treated as a supply of goods nor a supply of services (with effect from September 30, 2019) under the GST legislation. An amendment has been proposed to provide the same classification to the impugned transaction with retrospective effect from July 01, 2017. Further, it has also been provided that no refund would be allowed where tax has already been paid in this regard.
  • Amendment has been proposed for enabling proper officer to cancel the Registration of composite taxpayers where Form GSTR-4 not filed beyond 3 months from its due date
  • A retrospective amendment has been proposed to provide the GST exemption on unintended waste generated during the production of fish meal (falling under heading 2301) except fish oil for the period July 01, 2017, to September 30, 2019. It has also been provided that no refund would be available where tax has already been paid by the supplier on the impugned supplies. The exemption has been made in view of the decision taken by the GST Council in its 45^th
  • The time limit for filing refund application by the UIN entities is proposed to be increased up to 2 years from the last day of the quarter in which such impugned supply is received

16. Amendments proposed under the Customs Laws

• • The Customs Act is proposed to be amended to nullify the impact of the Judgment of Hon’ble Supreme Court in case of Canon India Private Limited Vs CC (2021) 125 taxmann.com 188 (SC) wherein it was held that the Directorate of Revenue Intelligence (‘DRI’) is not a proper officer for issuing a Show Cause Notice. In this regard, the following amendments has been proposed:
  • Retrospective amendment and a validation clause is proposed in relation to appointment and functions of Proper Officer under the Customs Laws
  • A new process would be introduced under the Customs law for reassessment proceedings in relation to goods imported into India
  • The CBIC would be empowered to make Rules to specify the additional obligations of the importer in respect of specified imported goods (whose value is not being declared correctly) which inter-alia includes criteria of selection of goods, various checks, etc.
  • The Advance Ruling application under the Customs laws can be withdrawn by the applicant at any time before the pronouncement of Ruling by the Advance Ruling Authority
  • The validity of advance ruling under Customs is proposed to be limited up to the three years except where there is change in the law or facts