Section-Wise Brief Analysis of Changes in GST in Union Budget 2023-24

Section-Wise Brief Analysis of Changes Made In Goods And Service Tax In Union Budget For Fy 2023-24

AMENDMENTS IN THE CGST ACT, 2017

Section 10: Composition Levy

• Presently, the person engaged in supplying goods or services through electronic commerce operator is not eligible to opt for composition scheme.
• Now, it is proposed that person engaged in supplying goods through electronic commerce operator is eligible for opting composition scheme.

Section 16: Eligibility and Conditions for taking Input Tax Credit

• Presently, where the recipient of goods or services fails to pay to the supplier of goods or services or both within 180 days from the date of issue of invoice, the recipient shall be  liable to add the said GST credit amount in the output tax liability along with the interest. [As per section 50(1) the interest rate is 18%].
• Now, it is proposed that the recipient shall pay the amount along with the interest (i.e. needs to reverse the GST credit) as per Section 50. [Now, the interest rate is 18%/24%]
  This seems that, the purpose of the same is to reverse the GST credit rather that adding the same into output tax liability.
• Presently the provision of re-availment of credit is as under: ‘Provided also that the recipient shall be entitled to avail of the credit of input tax on payment made by him of the amount towards the value of supply of goods or services or both along with tax payable thereon.’
• Now, it is also proposed that the recipient shall avail the credit which was reversed on the payment made to the supplier. The word made to the supplier is inserted in the provision.

Section 17: Apportionment of Credit and Blocked Credit

• Presently, for the purpose of calculation of reversal of common credit (Common Credit means ITC is partially used for taxable supply and partially for exempt supply) the exempt supply includes sale of land and sale of building after issuance of completion certificate.
• Now, it is proposed that in addition to the above, the exempt supply also includes the Supply of warehoused goods to any person before clearance for home consumption.
• Further, it is also proposed that, input tax credit shall not be available if taxable person receives goods or services which are being used for the betterment of society (Corporate Social Responsibility) as per companies act.

Section 23: Person not liable for registration

• Presently, person who is exclusively engaged in exempt supply and an agriculturist to the extent of supply of produce out of cultivation of land is not liable for registration.
• Now, it is proposed to be substituted that, the said section will also apply even if,
  • the aggregate turnover in financial year exceeds the specified limit (i.e. 10lakhs/20lakhs/40lakhs) or
  • the person falls under the cases of compulsory registration.

Section 37: Furnishing details of Outward Supplies

• As per the proposed amendment, a time limit for filing of GSTR 1 has been inserted for the registered person. The registered person shall not be allowed to file GSTR 1 after the expiry of the period of 3 years from the date of filing of the said details unless it is  specifically allowed by the government.

Section 39:Furnishing of Returns

• As per the proposed amendment, a time limit for filing of GSTR 3B has been inserted for the registered person. The registered person shall not be allowed to file GSTR 3B after the expiry of the period of 3 years from the due date of filing of the said return unless it is specifically allowed by the government.

Section 44: Annual Return

• As per the proposed amendment, a time limit for filing of GSTR 9 has been inserted for the registered person. The registered person shall not be allowed to file GSTR 9 after the expiry of the period of 3 years from the due date of filing of the said return unless it is specifically allowed by the government.

Section 52: Collection of Tax at source

• As per the proposed amendment, a time limit for filing of GSTR 8 has been inserted for the E-commerce operator. The Ecommerce operator shall not be allowed to file GSTR 8 after the expiry of the period of 3 years from the due date of filing of the said return unless it is specifically allowed by the government.

Section 54: Refund of Tax

• Presently, In case of refund of zero rated supply of goods or services or both, the proper officer allows only the 90 % of the Input tax credit claimed excluding the ITC which was provisionally accepted (i.e. 5%/10% of GSTR 2A ITC claimed in GSTR 3B).
• Now, the above said exclusion is removed. Since the taxpayer cannot avail ITC on  provisional basis as per section 41, there is no question of provisional ITC to be excluded from the refund amount to be paid on provisional basis by the Proper Officer.

Section 56: Interest on delayed refunds

• As per the proposed amendment the applicant is eligible for interest on delayed refund for the period of delay beyond sixty days from the date of receipt of such application till the date of refund of such tax.

Section 122: Penalty for certain offences

• As per the proposed amendment the electronic commerce operator is liable for penalty amounted to Rs. 10,000 or an amount of tax involved whichever is higher if any electronic commerce operator who;
  • Allows unregistered person for supply of goods or services through ECO(other that the person is exempted from GST registration)
  • Allows a person (who is ineligible to make an inter state supply) making an inter state supply through such ECO.
  • Allows to a person who is exempted from the GST registration and made supplies through ECO and if the ECO fails to furnish correct details in its return i.e. GSTR-8.

Section 132: Punishment for certain offences

• As per the proposed amendment following offences shall not be punishable;
  • Who stops any officer for performing his duties
  • Who tampers or destroy the material evidences
  • Who fails to supply or supply false information which is required under law
• Further, who issues invoice without supply of goods or services which leads to wrongful availment of credit or refund amounted to Rs.100lakhs to Rs.200 lakhs shall be punishable with imprisonment (Upto 1year) and fine.

Section 138: Compounding of offence

• As per the proposed amendment the amount for the settlement of an offence under the said section is 25% of the amount of tax involved but not more than 100% of tax involved.

Section 158A: Consent based sharing of information furnished by taxable person

• As per proposed amendment, the following details filed by the registered person is made available on the common portal by the government;
• • Particulars furnished in application for GST registration
  • Particulars furnished in periodical GSTR-3B or GSTR-9
  • Particulars furnished in periodical GSTR-1
  • Particulars furnished for generation of E-way bills.
• For the sharing of above details the consent of the supplier and the recipient is required.

Schedule III: Activities Or Transactions Which Shall Be Treated Neither As A Supply Of Goods Nor A Supply Of Services

• As per the proposed retrospective amendment the following activities or transaction shall neither be treated as good nor services.
  • Supply of goods from a place in the non-taxable territory to another place in the non-taxable territory without such goods entering into India.
  • Supply of warehoused goods to any person before clearance for home consumption Supply of goods by the consignee to any other person, by endorsement 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.
• Further, no refund of tax shall be allowed if the tax has been paid by the registered person in respect of the above transaction and activities..

AMENDMENTS IN THE IGST ACT, 2017

Section 2(16): Non-taxable online recipient

• As per the proposed amendment the definition of non-taxable recipient is any unregistered person receiving online information and database access or retrieval services located in taxable territory.
• This seems the amendment has proposed for the 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
  • a department or establishment of the Central Government or State Government; or
  • local authority; or
  • Governmental agencies; or
  • such persons or category of persons as may be notified by the Government
• shall be treated as unregistered person for the purpose of the said clause.

Section 2(17): Online information and database access or retrieval services

As per the proposed amendment the definition of Online information and database access or retrieval services is services whose delivery is mediated by information technology over the internet or an electronic network and the nature of which renders their supply  impossible to ensure in the absence of information technology and includes electronic services such as,-

• (i) advertising on the internet;
• (ii) providing cloud services;
• (iii) provision of e-books, movie, music, software and other intangibles through telecommunication networks or internet;
• (iv) providing data or information, retrievable or otherwise, to any person in electronic form through a computer network;
• (v) online supplies of digital content (movies, television shows, music and the like);
• (vi) digital data storage; and
• (vii) online gaming;

Section 12: Place of supply of services where location of supplier and recipient is in India

• As per the proposed amendment, the said provision has been omitted: where the transportation of goods is to place outside India.
• This seems to have been done to bring in line with the section i.e. Place of supply of services where location of supplier and recipient is in India.