Notification No. 22/2021 – Central Tax (Rate) Explained

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Notification No. 22/2021- Central Tax (Rate): Seeks to supersede notification 15/2021- CT(R) dated 18.11.2021 and amend Notification No 11/2017- CT (Rate) dated 28.06.2017.

[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB- SECTION (i)]

G.S.R (E).- In exercise of the powers conferred by sub-section (1), sub-section (3) and sub-section (4) of section 9, sub-section (1) of section 11, sub-section (5) of section 15, sub-section (1) of section 16 and section 148 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on being satisfied that it is necessary in the public interest so to do, on the recommendations of the Council, and in supersession of notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 15/2021 – Central Tax(Rate), dated the 18^th November, 2021, published in the Gazette of India,

Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 807(E), dated the 18^th November, 2021, hereby makes the following amendments in the notification of the Government of India, in the Ministry of Finance (Department of Revenue) No.11/2017- Central Tax (Rate), dated the 28th June, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 690(E), dated the 28th June, 2017, namely:-

In the said notification, in the TABLE, against serial number 3,-

in column (3),in the heading “Description of Service”, in items (iii),(vi),(ix) and (x), for the words “Union territory, a local authority, a Governmental Authority or a Government Entity” the words “Union territory or a local authority” shall be substituted;

in column (3), in the heading “Description of Service”, in item (vii), for the words “Union territory, local authority, a Governmental Authority or a Government Entity” the words “Union territory or a local authority” shall be substituted;

in column (5), in the heading “Condition”, the entries against items (iii),(vi),(vii),(ix) and (x), shall be omitted.

2. This notification shall come into force with effect from the 1st day of January, 2022.

(Gaurav Singh)
Deputy Secretary to the Government of India

Note: - The principal notification No. 11/2017 - Central Tax (Rate), dated the 28th June, 2017 was published in the Gazette of India, Extraordinary, vide number G.S.R. 690 (E), dated the 28th June, 2017 and last amended by notification No. 06/2021 - Central Tax (Rate), dated the 30th September, 2021 vide number G.S.R. 687(E), dated the 30th September, 2021.

📚 Frequently Asked Questions (FAQs): Notification No. 22/2021- Central Tax (Rate)

Q1: What is Notification No. 22/2021 – Central Tax (Rate)?

Answer:
Notification No. 22/2021 – Central Tax (Rate), issued on 31st December 2021, supersedes Notification 15/2021 and amends Notification No. 11/2017 – Central Tax (Rate). The changes mainly impact the description of taxable services and remove certain conditions for specified service categories notfctn-22-2021-cgst-rate.

Q2: From when is this Notification effective?

Answer:
This notification came into effect on 1st January 2022.

Q3: What are the key changes in Notification No. 22/2021 – Central Tax (Rate)?

Answer:
References to Governmental Authority and Government Entity have been removed.
The scope of services is restricted to Union Territory or Local Authority.
Certain “Conditions” applicable to specific services (items iii, vi, vii, ix, and x) have been omitted.

Q4: Why was Notification No. 15/2021 superseded by this?

Answer:
To streamline GST applicability and avoid confusion in service descriptions and conditions, the Government issued Notification 22/2021, thereby consolidating changes for better clarity and compliance.

Q5: Which services are impacted under this amendment?

Answer:
Services listed in Serial No. 3 of Notification 11/2017 are impacted, particularly those relating to works contracts, government-related construction, and related supplies.

Q6: How does this affect taxpayers dealing with Government contracts?

Answer:
Taxpayers now need to note that only services provided to Union Territory or Local Authority qualify under the amended description. Services earlier extended to Governmental Authorities or Government Entities no longer fall under this scope.

Q7: What conditions have been removed?

Answer:
The Condition column entries for items (iii), (vi), (vii), (ix), and (x) have been deleted. This simplifies compliance, as taxpayers no longer need to satisfy earlier imposed restrictions.

Q8: Where can businesses seek help in implementing these changes?

Answer:
Businesses can consult a GST Expert for compliance. Finodha also provides end-to-end support for:
GST Registration
GST Return Filing
GST Compliance
Setup Business

Q9: Does this amendment impact Input Tax Credit (ITC)?

Answer:
While ITC provisions remain unchanged, the eligible recipient category has been narrowed. Businesses dealing with Government Entities (but not UT/local authority) should reassess ITC eligibility.

Q10: How should contractors and service providers adapt to this?

Answer:
Review all ongoing contracts to identify if the recipient qualifies under UT/Local Authority.
Reassess billing practices in line with revised service descriptions.
Take professional guidance to avoid GST disputes.

✅ Summary:

Notification No. 22/2021 – Central Tax (Rate) is a key amendment effective from 01.01.2022. It modifies Notification 11/2017 by restricting services to Union Territories and Local Authorities, while removing conditions that previously applied. Taxpayers must align contracts and compliance accordingly.