Key GST Changes w.e.f 1 October 2022

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Key legal amendments linked to the Goods and Services Tax (GST) were incorporated in the Finance Act earlier this year, and according to an official order, they went into force on October 1. Knowing the GST Changes w.e.f from 1st October 2022 is thus essential. These changes will have direct as well as indirect impact on your business. Let’s discuss these key changes.

Restrictions on Claiming Input Tax Credit

The government can now restrict the Input Tax Credit if the taxpayer’s vendor has:

  • Failed to pay taxes for such a time frame or underpaid taxes by a certain amount
  • Recovered Excess ITC Below Such Limit or Used ITC to cover tax liabilities in excess of the cap.
  • Taken registration within such period
  • Other Situations That May Be Specified

Therefore, greater care must be used when utilizing ITC. You may avoid legal trouble while using the ITC option by making sure you only buy from reputable vendors. Furthermore, GST Return Filing should be done cautiously and assistance from an expert is also recommended.

Time Limit Extension for Claiming Input Tax Credit

The GST return filing deadline of September has been moved to November 30 so that businesses can claim input tax credits for the prior fiscal year. Furthermore, the original September 30th deadline for credit note issue and return declaration has been moved to November 30th.

With the new rules in place, an entity can only claim an input tax credit with respect to an invoice if the credit is not limited by a tax credit statement that was automatically prepared using data provided by the business’s suppliers.

GST Registration Cancellation for not filing GST Returns

Tax authorities have been given the authority to approve GST Registration Cancellation suo moto in the following predetermined cases:

  • A composite taxpayer missed the filing deadline for a fiscal year by more than three months.
  • Regular Taxpayers have not filed a return for as long as is legally required.

Keep in mind that under current Rule 21, registration can be revoked or canceled if a monthly return filer fails to file a return for a continuous period of 6 months or if a quarterly return filer fails to file a return for a continuous period of 2 tax periods. The current change will make sure that people follow the rules, since so many things, like getting ITC, are now tied to filing returns.

Changes in GSTR-1 Return Filing

Statement of outward supply (also known as GSTR-1 Return) filing must now follow a strict timetable. This means that return timing is crucial. No return for the current month can be submitted unless the prior month’s return has not been submitted. Furthermore, the government may impose conditions/restrictions on the completion of outbound supply information and subsequent communication to the receiver.

Other Changes in GST Return Filing

  • Filing GSTR 3B for the present period is limited if GSTR 1 for the prior time was not submitted.
  • The new deadline for submitting GSTR 5 and GSTR 5A forms is the 13th of the following month.
  • There is now a late filing penalty for the TCS Return.

Changes in Self-Assessment of Input Tax Credit

All Taxpayers’ self-reported ITCs will be recorded in GST PMT-02, the government’s computerized credit ledger. Provisional ITC, a notion that has been causing much confusion, has been removed. Additionally, ITC shall be revoked with Interest if one’s supplier did not pay taxes to the Government.

Updates for GST Refunds

  • If you have an excess amount in GST-PMT-03, the Electronic Cash Ledger, you can get it back by filling out a refund application.
  • Within 2 years after the date GSTR 3B was required to be filed, a claim for a refund must be submitted if the supplier was a SEZ Developer or SEZ Unit. There was a great deal of muddle over this, particularly over the date at issue.
  • Within two years, a UN agency, consulate, embassy, etc., can file for a tax refund on an inward supply. Consistent with other refunds, the time limit for claiming GST has been increased from the original six months at the time of GST’s inception to the current extended period of eighteen months from the last day of the quarter in which the supply was made.

Effects of late payments to suppliers under GST

If a taxpayer has taken advantage of ITC but has not yet paid the supplier in full 180 days from the date of the invoice, the taxpayer will be required to do so, along with interest. Previously, it was suggested that if an ITC was used, the buyer should pay the vendor interest on any payments that were late for more than 180 days. With the recent revisions, interest expense is now a growing concern. Even if the buyer can get their tax rebates after making payments, they will still have to pay the interest.

Modifications for GSTR-2 & GSTR-3

The matching idea and the two-way communication procedure in return filing, etc., have been removed since they were never announced (as was made evident during the budget presentation) and because the forms GSTR-2 and GSTR-3 have never been notified. Nonetheless, the self-policing mechanism for bona fide ITC availments has been taken care of by the newly incorporated requirements under Section 16(2).

Update for QRMP Dealers

Taxpayers who have opted for QRMP Scheme under GST may now make their tax payments based on their own self-assessment or in any other manner that the government may prescribe in the future.

Take a call from Expert


In conclusion, the fact that many alterations have been made, all of them have been made in the benefit of Trade and industry by drawing on the many lessons learned over the years and by soliciting advice and input from those with a vested interest in the sector to make it simpler to adhere to the law. If you wish to know more about these changes or need any guidance regarding GST, you can consult our GST Experts at: 8881-069-069. 

GST on Consultancy Services in India

moreover, If you want any other guidance relating to GST Return Filing or GST Registration, please feel free to talk to our business advisors at 8881-069-069.

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