GST major additions and adjustments

Union Budget 2022

GST major additions and adjustments in the Union Budget 2022

This is a second Union budget since the Covid-19 impact in India so everyone had been very intrigued about the GST major additions and adjustments that would be presented in Union Budget 2022.
Finally, the Union Budget 2022 was unveiled by our Finance Minister Nirmala Sitharaman on Feb 1 via a speech including the country’s economic revival after the impact of the Pandemic. She mentioned that India’s 9.2% GDP growth is the highest amongst large economies. As per the policymakers, the union budget 2022 would lay the foundation and blueprint for the Indian economy over the next 25 years. There are several indications to prove that the Indian economy is moving in the direction of growth such as Reduced deficits, impressive GDP growth, improved foreign exchange reserves.

In terms of GST, it has been noticed that revenue is generated in favour of the Indian Economy irrespective of adverse effects of Covid-19, even a collection of Rs.138394 crore gross GST revenues in Jan 2022 has been recorded. This has been the highest ever collection since the beginning of GST
The GST law in the Union budget 2022 is loaded with numerous additions and amendments. Let's descend towards some of the major updates.

For Indian Businesses to Understand

Going forward this budget appears to establish strict laws for businesses in terms of GST. Especially return filing and input tax credit can be seen to have major reform
On 1st January 2022 the amendments to the GST law was made effective, in this Section 16(2)(aa) was introduced to enable taxpayers to claim input tax credit only if their vendors upload a particular invoice or debit note in their corresponding GSTR-1 or Invoice Furnishing Facility (IFF).

Updates on Direct Taxes

  • The alternate minimum tax paid by cooperatives has been decreased from 18.5% to 15%.
  • For those having a total income of more than Rs 1 crore and up to Rs 10 crores, the surcharge on cooperative societies is reduced from 12% to 7%.
  • Business expenditure would not include any surcharge or cess levied on income.
  • The provision has been presented which enables businesses to file an updated return on additional tax payments. Now entrepreneurs can declare the income which they skipped earlier and it must be filed within 2 years from the end date of the respective assessment year.
  • If any undisclosed amount is found during any survey or search then the loss would not be offset against the same.
  • On employer’s contribution to the NPS account of State Government employees the tax deduction limit has been increased from 10% to 14%.

Updates on Indirect Taxes

  • By 30th September the Customs Administration of SEZs will be operated on the IT platform and this process will be followed on the Customs National Portal.
  • The registration of composition taxable persons will be withdrawn if they fail to file an annual return for three months beyond the due date of 30th April of the assessment year.
  • If any amendments, uploading missed sales invoices or notes, or claiming any missed ITC have to be made then the last date for that is 30th November of the financial year.
  • More than 350 exemption entries are slated to be gradually phased out, like exemptions on certain agricultural products, chemicals, fabrics, medical devices, and drugs, as well as medicine for which sufficient domestic capacity exists.
  • Now the 13th of every month is the due date to file GSTR-5 by non-resident taxable individuals. Earlier this was the 20th of every next month as per the GST law.
  • Going forward sections 42, 43, and 43A of matching reversal of tax credits have been dismissed.

Impact on Manufacturing Sector

  • Keeping in view the objective of ‘Make in India’ and ‘Atmanirbhar Bharat’ there would be an exemption on items that can be manufactured in India and concessional duties on the raw material that goes into the manufacturing of intermediate products.
  • Production houses dealing in areas like chemicals, textiles, and metals for them the custom rate and tariff structure have been simplified.


  • From 31 March 2023 to 31 March 2024 is the extended last date for manufacturing units under section 115 BAB.
Manufacturing Units
GST with Mibook

Amendments in Electronic Ledgers

Union Budget 2022 shows a significant change in procedure to transferring cash balance from one head to another within the same registration or as CGST and IGST to the cash ledger of a distinct person. Keep a note that a ‘distinct person’ is a person with different GSTINs but bearing the same PAN.
The very benefit of this amendment is that now taxpayers have the flexibility to transfer excess cash balance from one state to another having multiple GSTINs. The circumstances can be avoided where one GSTIN has excess balance and an output liability is being paid in another state. Also, the procedure to apply for a refund and granting anyone can be ignored in cases where the taxpayer transfers such balance to another state to set off liability.

This year the Union Budget is developed to be people friendly and progressively. It is focused on providing basic amenities to the poor, middle class and youth due to the harsh impact of Covid-19. Union Budget 2022 is a step towards a modern and self-reliant India. proposes to make a four-fold increase in public investments as compared to those in the UPA regime and that the measure will open up immense opportunities, all outlined by Prime Minister Narendra Modi.

The Finance minister has also emphasised the positive endeavour of Budget 2022 by stating that “the conscious decision was taken not to increase tax because of the hardship that people have been facing due to the pandemic. Sitharaman, while presenting the Union Budget, said that the country is expected to grow at 9.27 per cent in the coming year. With a focus on four pillars of development — inclusive development, productivity enhancement, energy transition and climate action — the Budget give a blueprint of the economy from India at 75 to India at 100, Sitharaman said.

In the coming months, the year’s budget can be seen to aid growth by developing a greener economy, optimum usage of the digital revolution, and giving a more productive phase for Indian businesses. If you are willing to get GST benefits and meet mandatory compliance introduced in Union budget 2022 you can get in touch with our experts of Mibook.