Summary of amendments in CGST & IGST Act 2017 by Finance Bill 2023

CA Ajay Kumar Mundada 01 Feb 2023 12,732 Views 0 comment Print Goods and Services Tax | Articles, Featured

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A brief summary of the amendments made in the CGST Act 2017 &IGST Act 2017 vide Finance Bill 2023

Amendments carried out in the Finance Bill 2023 except those in clause 142 will come into effect from the date when the same will be notified concurrently, as far as possible, with the corresponding amendments to the similar Acts passed by the States & Union territories with legislature. Amendments carried out in the Finance Bill, 2023, vide clause 142 will come into effect retrospectively from 1^st July, 2017.

S. No.	Clause of the Finance Bill, 2023	Amendment	Changes in brief
1	[128]	Clause (d) of sub-section (2) and Clause (c) of sub-section (2A) in section 10 of the CGST Act is being amended so as to remove the restriction imposed on registered persons engaged in supplying goods through electronic commerce operators from opting to pay tax under the Composition Levy.	Now the registered person selling the goods through an e-commerce operator will now be allowed to opt for composition scheme under Section 10.
2	[129]	Second and third provisos to sub-section (2) of section 16 of the CGST Act are being amended to align the said sub-section with the return filing system provided in the said Act.	Before the provio has stated that the ITC which has to be reversed for non-payment of amount to the suppliers within 180 days was to be added in the output tax liability but the form GSTR-3B have stated to reverse the said ITC from the All Other ITC coloumn. Thereby this amendment is clearing the ambiguity and is stating that the reversal for non-payment has to be made in the table 4 of the GSTR-3B.
3	[130]	Explanation to sub-section (3) of section 17 of the CGST Act is being amended so as to restrict availment of input tax credit in respect of certain transactions specified in para 8(a) of Schedule III of the said Act, as may be prescribed, by including the value of such transactions in the value of exempt supply.	For the purpose of reversal of ITC as per Rule 42 & 43 of the CGST Rules 2017, the value of supplies of warehoused goods to any person before celerance for home consumption would now be treated as exempted supplies. Thereby increasing the reversal amount to be made under Rule 42 & 43 (availment of proportionate ITC).
3	[130]	Further, sub-section (5) of said section is also being amended so as to provide that input tax credit shall not be available in respect of goods or services or both received by a taxable person, which are used or intended to be used for activities relating to his obligations under corporate social responsibility referred to in section 135 of the Companies Act, 2013.	Reversing the judgment of M/s. Bambino Pasta Food Industries Pvt. Limited (GST AAR Telangana) and many more such judgements which allowed ITC on the expenditure incurred for CSR Activites. Thereby from the effective date of notification, no ITC can be claimed on the CSR expenditure incurred by the company.
4	[131]	Sub-section (1) and sub-section (2) of section 23 of the CGST Act are being amended, with retrospective effect from 01^st July, 2017, so as to provide that persons for compulsory registration in terms of sub section (1) of section and section 22 of the Act need not register if exempt under sub section (1) of section 23.	Clearing the doubts for obtaining registeration, the Act is now clarifying that Section 23 will superseed Section 24 (Compulsory Registration) & Section 22(1)(Registration if turnover is greater than 20 Lakhs). Thereby to conclude if a person is even required for obtaining compulsory registration & whose turnover is crossing 20 Lakhs would still not be required to obtain registration.
5	[132]	A new sub-section (5) in section 37 of the CGST Act is being inserted so as to provide a time limit upto which the details of outward supplies under sub-section (1) of the said section for a tax period can be furnished by a registered person. Further, it also seeks to provide an enabling provision for extension of the said time limit, subject to certain conditions and restrictions, for a registered person or a class of registered persons.	Now the registered person would not be able to file the GSTR-1 after 3 years from the due date of filing return
6	[133]	A new sub-section (11) in section 39 of the CGST Act is being inserted so as to provide a time limit upto which the return for a tax period can be furnished by a registered person. Further, it also seeks to provide an enabling provision for extension of the said time limit, subject to certain conditions and restrictions, for a registered person or a class of registered persons.	Now the registered person would not be able to file the GSTR-3B after 3 years from the due date of filing return
7	[134]	A new sub-section (2) in section 44 of the CGST Act is being inserted so as to provide a time limit upto which the annual return under sub-section (1) of the said section for a financial year can be furnished by a registered person. Further, it also seeks to provide an enabling provision for extension of the said time limit, subject to certain conditions and restrictions, for a registered person or a class of registered persons.	Now the registered person would not be able to file the GSTR-9 i.e. the Annual Return after 3 years from the due date of filing return.
8	[135]	A new sub-section (15) in section 52 of the CGST Act is being inserted so as to provide a time limit upto which the statement under sub-section (4) of the said section for a month can be furnished by an electronic commerce operator. Further, it seeks to provide an enabling provision for extension of the said time limit, subject to certain conditions and restrictions, for an electronic commerce operator or a class of electronic commerce operators.	Now the registered person would not be able to file the GSTR-8 i.e. the Annual Return after 3 years from the due date of filing return.
9	[136]	Sub-section (6) of section 54 of the CGST Act is being amended so as to remove the reference to the provisionally accepted input tax credit to align the same with the present scheme of availment of self- assessed input tax credit as per sub-section (1) of section 41 of the said Act.	The said amendment is in alingment with the present scenario, as there is no concept of provisional acceptance in the pratical scenario
10	[137]	Section 56 of the CGST Act is being amended so as to provide for an enabling provision to prescribe manner of computation of period of delay for calculation of interest on delayed refunds.	This amendment prescribe the manner in which the interest computation has to be made.
11	[138]	A new sub-section (1B) in section 122 of the CGST Act is being inserted so as to provide for penal provisions applicable to Electronic Commerce Operators in case of contravention of provisions relating to supplies of goods made through them by unregistered persons or composition taxpayers.	This section prescribed penalty for an E-Commerce operation. The penalty for an e-commerce opertator would be levied for the following defaults. 1. If he allows an unregistered person to supply goods or services 2. Allows an inter state supply of services by a person registered under composition scheme 3. Failes to pay tax or furnish incorrect details. The said penalty would be Rs. 10,000/- or the amount involved which ever is higher.
12	[139]	Sub-section (1) of section 132 of the CGST Act is being amended so as to decriminalize offences specified in clause (g), (j) and (k) of the said sub-section and to increase the monetary threshold for launching prosecution for the offences under the said Act from one hundred lakh rupees to two hundred lakh rupees, except for the offences related to issuance of invoices without supply of goods or services or both.	The said section is decriminalize offences and increasing the monetary threshold.
13	[140]	First proviso to sub-section (1) of section 138 of the CGST Act is being amended so as to simplify the language of clause (a), to omit clause (b) and to substitute the clause (c) of said proviso so as to exclude the persons involved in offences relating to issuance of invoices without supply of goods or services or both from the option of compounding of the offences under the said Act. It further seeks to amend sub-section (2) so as to rationalize the amount for compounding of various offences by reducing the minimum as well as maximum amount for compounding.	Clearing the ambiguity and to exclude the persons involved in offences relating to issuance of invoices without supply of goods or services or both from the option of compounding of the offences under the said Act. It further seeks to amend sub-section (2) so as to rationalize the amount for compounding of various offences by reducing the minimum as well as maximum amount for compounding.
14	[141]	A new section 158A in the CGST Act is being inserted so as to provide for prescribing manner and conditions for sharing of the information furnished by the registered person in his return or in his application of registration or in his statement of outward supplies, or the details uploaded by him for generation of electronic invoice or E- way bill or any other details, as may be prescribed, on the common portal with such other systems, as may be notified.	The said act provides for sharing of information with such departments as the government deems fit.
15	[142]	Schedule III of the CGST Act is being amended to give retrospective applicability to Para 7, 8 (a) and 8 (b) of the said Schedule, with effect from 01^st July, 2017, so as to treat the activities/ transactions mentioned in the said paragraphs as neither supply of goods nor supply of services. It is also being clarified that where the tax has already been paid in respect of such transactions/ activities during the period from 01^st July, 2017 to 31^st January, 2019, no refund of such tax paid shall be available.	The supply of goods from a place in the non-taxable territory to another place in the non-taxable territorry without such goods entering into India & the supply warehoused goods to any person before clearance for home consumption & supply of goods by consignee to any other person by endosement of documents of title to the goods after the goods have been dispatched from the port of origin located outside India but before clearance for home consumption, shall be deemed to have been instered from 01.07.2017 and not from 01.02.2019. Further for any payment made of taxes during the period of 01.07.2017 to 01.02.2019 shall not be refunded.
16	[143]	Clause (16) of section 2 of the IGST Act is being amended so as to revise the definition of “non-taxable online recipient” by removing the condition of receipt of online information and database access or retrieval services (OIDAR) for purposes other than commerce, industry or any other business or profession so as to provide for taxability of OIDAR service provided by any person located in non- taxable territory to an unregistered person receiving the said services and located in the taxable territory. Further, it also seeks to clarify that the persons registered solely in terms of clause (vi) of Section 24 of CGST Act shall be treated as unregistered person for the purpose of the said clause.	The government has broden up the defination of Non Taxable Online Receipient and have made it applicable for the purpose of commerce, indusrty and other business or professions
16	[143]	Also, clause (17) of the said section is being amended to revise the definition of “online information and database access or retrieval services” to remove the condition of rendering of the said supply being essentially automated and involving minimal human intervention.	Brodening the scope of the defination of OIDAR Services by removing the condition of rending the supply though minimal human intervention.
17	[144]	Proviso to sub-section (8) of section 12 of the IGST Act is being omitted so as to specify the place of supply, irrespective of destination of the goods, in cases where the supplier of services and recipient of services are located in India.	The amendment seeks to charge tax from the supplies made with respect to transportation of goods to a place outside india by amending the place of supply and making the POS as the date of booking or handing over the package from the date of delivery.