Rule 37 of the CGST Rules mandates the reversal of Input Tax Credit (ITC) if a recipient fails to pay the supplier for goods or services (along with tax) within 180 days of the invoice date. The reversed ITC is added to the output tax liability in GSTR-3B.
Rule 37A was inserted in the CGST Rules through Finance Act 2022, effective from October 2022. Before Rule 37A, the government already had Rule 37, which required ITC reversal if the recipient did not make payment to the supplier within 180 days from the invoice date.
ITC reversal under CGST Rule 37A - Where the supplier fails to pay tax through the GSTR-3B by 30th September of the following year. ITC reversal under CGST Rule 42 - Where inputs are used to make an exempt supply or for manufacturing supplies, some of which were used for non-business or personal purposes.
The following category of tax persons are exempted from payment of 1% of GST in Cash 1. Registered taxpayers who have paid income tax above Rs 1.00 in Income Tax during the last two years continuously 2. Taxpayers who have zero-rated supplies without payment of duty and claimed refund of more than Rs 1.00 lac 3.
Section 16(2) and Rule 37
If No payment is made within 180 days, then whole the ITC has to be reversed. When the payment is made to the supplier ITC reversed will be reclaimed . If proportionate payment is made than proportionate ITC will be reclaimed.
Under the GST law, penalty for late filing of GST returns include a late fee of Rs. 50 per day (Rs. 25 each under CGST and SGST) for delayed return filing, capped at Rs. 5,000, and an interest rate of 18% per annum on outstanding tax amounts.
The claim has to be made before the expiry of two years from the last day of the quarter in which such supply was received. It may be noted that refund would be granted by central government as facility of a single UIN has been made available to such agencies. CBIC has issued instructions vide Circular No. F.
The New GST Rate Structure
The old four-slab structure (5%, 12%, 18%, 28%) has been simplified. The 12% and 28% slabs were eliminated and replaced with a new structure, which is now primarily 0%, 5%, 18%, and a 40% rate for luxury and “sin” goods.
No Cash Transaction Limit: The GST Act doesn't impose specific limits.
To be eligible for the credit, you need to be 19 years of age or older and a Canadian resident. The next GST/HST credit will be paid out on July 5, and Canadians can expect up to $496 if they are single, $650 for married and common-law couples, and $171 for each child under the age of 19.
Section 69 of CGST Act, 2017 : Section 69: Power To Arrest
(a) where a person is arrested under sub-section (1) for any offence specified under sub-section (4) of section 132, he shall be admitted to bail or in default of bail, forwarded to the custody of the Magistrate; (b) in the case of a non-cognizable and.
Section 49 of the CGST Act relates to tax payment, interest, penalty and other amounts. It talks about how a taxpayer must discharge his GST liabilities, including the following: Payment of tax, interest, penalties and other amounts through the electronic cash ledger.
Rule 62. (ii) furnish a return for every financial year or, as the case may be, part thereof in FORM GSTR-4, till the thirtieth day of April following the end of such financial year,] electronically through the common portal, either directly or through a Facilitation Centre notified by the Commissioner.
(1) Every registered person, other than an Input Service Distributor or a non- resident taxable person or a person paying tax under the provisions of section 10 or section 51 or section 52 shall, for every calendar month or part thereof, furnish, in such form and manner as may be prescribed, a return, electronically, ...
For any standard-rated supplies of goods or services that you make on or after 1 Jan 2024, you must charge GST at 9%. For instance, if you issue an invoice and receive payments for your supply on or after 1 Jan 2024, you must account for GST at 9%.
Types of GST in India
CGST (Central Goods and Services Tax) SGST (State Goods and Services. IGST (Integrated Goods and Services Tax) UTGST (Union Territory Goods and Services Tax)
It means at least 1% of tax liability must be paid by cash. It applies to such taxpayers who have monthly value of taxable supplies more than Rs. 50 lakh (not being exempt or zero-rated supplies).
Businesses must register for GST if their turnover exceeds ₹40 lakh, ₹20 lakh, or ₹10 lakh, depending on the supply and state/UT, and for specific categories like e-commerce sellers. GST simplifies the tax structure by eliminating cascading taxes and consolidating multiple indirect taxes into one.
Cash Method: GST is reported only when money changes hands. Accruals Method: GST is reported when invoices are issued or received.
Using the wrong tax codes or accounting method
Many GST mistakes are the result of using incorrect tax codes or the wrong accounting method: Tax codes: If a GST-free sale is coded as taxable in your accounting system, you'll pay GST unnecessarily. If a taxable sale is coded GST-free, you'll underpay.
The 'five year rule' states that residential premises are not considered to be 'new' if they have been rented out as residential premises for five or more years since they first became residential premises, or were last built or substantially renovated.
Barring of GST Return on expiry of three years
The GST network issued another advisory on 7th June 2025, implementing the rule of time-barring of GST return filing beyond three years from the due date. By this update, taxpayers will not be able to file GST returns after three years from the due date of such return.
The following documentary evidence is required to claim a refund under GST by registered tax payer.
Payment amounts are recalculated every July
For example, the information from your 2024 tax return determines the GST/HST credit amount you get for the payment period from July 2025 to June 2026. You could get up to: $533 if you are a single individual. $698 if you are married or have a common-law partner.
You are eligible for this credit if you are a resident of Canada for income tax purposes at the end of the month before and at the beginning of the month in which the CRA makes a payment (read When your GST/HST credit is paid). In the month before the CRA makes a quarterly payment, you must be at least 19 years old.