CBIC Notifies Mechanism for Implementation of Newly Inserted Sub-sections (5) and (6) in Section 16 of the CGST Act
By: Admin
October 08, 2024
Categories: 54th GST Council
4 Min Read
The Central Board of Indirect Taxes and Customs (CBIC) has introduced a mechanism for implementing the newly inserted sub-sections (5) and (6) of section 16 of the CGST Act, as recommended in the 54th GST Council meeting. These provisions, introduced through sections 118 and 150 of the Finance (No. 2) Act, 2024, are effective retrospectively from July 01, 2017.
Key Provisions:
- Rectification of Orders: Taxable persons who received orders under sections 73, 74, 107, or 108 of the CGST Act, confirming demand for wrong availment of input tax credit (ITC) due to non-compliance with section 16(4), but now eligible for ITC under the new sub-sections (5) or (6), may apply for rectification.
- Special Procedure:
The application for rectification must be filed electronically on the common portal within six months from the date of the notification (October 08, 2024).
The applicant must upload details in the prescribed Annexure A.
The rectifying authority is the proper officer who issued the original order, and they must issue a rectified order within three months of receiving the application.
- Rectification Process:
Once rectified, the order summary will be uploaded electronically using FORM GST DRC-08 (for sections 73 or 74 orders) or FORM GST APL-04 (for sections 107 or 108 orders).
Rectifications will only address wrong availment of ITC under section 16(4) but now allowed under sub-sections (5) or (6).
- Natural Justice:
If the rectification adversely impacts the taxable person, the authority must ensure that natural justice principles are followed.
This notification is expected to provide relief to taxable persons who can now correct past orders regarding input tax credit under the newly inserted provisions of the CGST Act.
GSTUpdate #CGSTAct #InputTaxCredit #GSTCouncil #FinanceAct #TaxRelief #Rectification #CBIC #TaxCompliance
