CGST (Second Amendment) Rules, 2023 – Key Procedural Reforms

Notification No.: 38/2023 – Central Tax
Date of Notification: 4th August 2023

Relevant Sections and Rules:

• Central GST Act, 2017:
  • Section 16(2) – Conditions for availing ITC
  • Section 23, 25, 29, 30, 37, 39, 44, 45, 47, 50, 52, 73, 74, 79, 132, 164 – Various provisions amended through rules
  • Section 148 – Special procedure for certain processes
  • Section 158A – Consent-based data sharing
• CGST Rules, 2017 (Amended):
  • Rule 9, 10A, 21A, 23, 25, 43, 46, 59, 64, 67, 88D, 94, 96, 108, 109, 138F, 142B, 162, 163 – Amended/Inserted
  • Forms updated/introduced: GST REG-30, GSTR-3A, GSTR-5A, GSTR-8, GSTR-9, GSTR-9C, GSTR RFD-01 (Annexure-1), GSTR DRC-01C, GSTR DRC-01D

Summary of Notification:

1. Registration & Verification: Rule 9 amended (removal of “in presence” requirement), Rule 10A revised for bank account declaration within 30 days or before filing GSTR-1, Rule 21A expanded to allow suspension for anomalies/contraventions, Rule 25 substituted to mandate uploading verification reports with photos.
2. Return Filing & ITC Compliance:
   • Rule 23 – Revocation application time extended to 90 days (extendable up to 270 days).
   • Rule 43 – Clarification on duty-free shop sales as exempt supplies for ITC reversal.
   • Rule 59 – Restrictions added: ITC mismatch (Rule 88D intimation) or non-furnishing of bank details halts GSTR-1 filing.
   • Rule 88D introduced – System-based intimation (DRC-01C) for excess ITC claimed in GSTR-3B vs GSTR-2B; pay within 7 days or explain.
3. Refunds & Recovery:
   • Rule 94 – Exclusion of applicant’s delay in reply/bank validation from interest computation.
   • Rule 96 – Omission of provisos restricting IGST refund.
   • Rule 142B inserted – New form DRC-01D for recovery intimations under Section 79.
4. Appeals & Adjudication:
   • Rule 108 & 109 amended – Appeals to be filed electronically only, manual allowed only if portal not available; provisional acknowledgment introduced.
   • Compounding (Rule 162/163) – New slabs of compounding amounts prescribed based on offence categories under Section 132.
5. E-Way Bills: Rule 138F inserted – Mandatory e-way bills for intra-State movement of gold, precious stones (value > ₹2 lakh), subject to State notification.
6. Consent-Based Data Sharing: Rule 163 inserted – Enables taxpayers to share REG-01, GSTR-3B, GSTR-1 data with requesting systems under Section 158A (e.g., Account Aggregators).
7. Forms Updated:
   • GSTR-3A – Now covers annual return defaults.
   • GSTR-5A – Expanded to include supplies to registered persons (RCM basis).
   • GSTR-8 – Now captures supplies by unregistered suppliers through ECOs.
   • GSTR-9 & 9C – Updated instructions for FY 2022-23, including ITC reversals, reclaim disclosures, and new 6% tax slab.
   • RFD-01 – Statement-7 revised for refunds.

Source: Notification No.: 38/2023 – Central Tax