Article analyses changes in GST vide Finance Bill 2023 in Section 10 – Composition Levy, Section 16 – Eligibility and conditions for taking input tax credit, Section 17 – Apportionment of credit and blocked credits, Section 23 – Persons not liable for registration, Section 37 – Furnishing details of outward supplies, Section 39 – Furnishing of returns, Section 44 – Annual return, Section 52 – Collection of tax at source and Section 54 – Refund of tax.
| Sl. No. | Finance Bill 2023 Section | CGST Act Section | Amendment via Finance Bill 2023 | Effect of the amendment |
| 1 | 128 | Section 10 – Composition Levy | Deletion of word “goods” from Clause (d) of sub-section (2) and Clause (c) of sub-section (2A) of section 10 |
At present, a person supplying goods through electronic commerce Operator (who is liable to deduct TDS under section 52) is not permitted to opt for composition scheme, but now, it is proposed that such persons shall be permitted to opt for composition scheme. |
| 2 | 129 | Section 16 – Eligibility and conditions for taking input tax credit | 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. | With the recent changes in rule 37 (Reversal of input tax credit in the case of non-payment of consideration) , it is now proposed to amend the provision of section 16(2) also.
As of now, If payment is not made to supplier within 180 days then availed ITC to be added to the output tax liability along with interest and 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. But now to align the same with the return filing system, ITC reversal will be done along with interest u/s 50 in this case and it has been also provided that re-availment would only be allowed if the said value of supply has been paid to the supplier. |
| 3 | 130 | Section 17 – Apportionment of credit and blocked credits | 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. 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. |
The scope of ITC reversal had now been extended as supply of warehoused goods to any person before clearance for home consumption will be considered as exempt supply for ITC reversal calculation.
Now it has been cleared that ITC shall not be available for 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. |
| 4 | 131 | Section 23 – Persons not liable for registration | Sub-section (1) and sub-section (2) of section 23 of the CGST Act are being amended, with retrospective effect from 01st 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. |
it has been clarified that Section 23 (persons not liable for registration) will prevail over Section 22 (turnover-based registration limits) and Section 24 (persons liable for compulsory registration).
Hence, a person exempt from registration under Section 23 would not be required to take registration irrespective of coverage under other registration provisions even if for the payment of RCM. |
| 5 | 132
133 134 135 |
Section 37 – Furnishing details of outward supplies
Section 39 – Furnishing of returns Section 44 – Annual return Section 52 – Collection of tax at source |
A new sub-section (5) in section 37 , sub-section (11) in section 39 of the CGST Act ,sub-section (2) in section 44 and sub-section (15) in section 52 of the CGST Act are being inserted so as to provide a time limit upto which the the respective return for a tax period can be furnished by a registered person.
A registered person shall not be allowed to furnish the respective return for a tax For Section 44 :- A registered person shall not be allowed to furnish an annual return for a financial year after the expiry of a period of three years from the due date of furnishing the said annual return. Further, it also seeks to provide an enabling provision for extension of the said time limit, |
Now, it is proposed to provide that GSTR-1, 3B, 9, 9C and 8 would not be allowed to be filed after expiry of 3 years from the due date of furnishing of said return.
However, This time limit can be extended by certain class of registered person by the government. |
| 6 | 136 | Section 54 – Refund of tax | 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 | When the GST law was introduced there was a concept of provisional ITC but that concept was removed through section 41 of CGST Act via Finance Act 2022.
Therefore, a similar amendment has been made in section 54(6) on provisional grant of refund. |
Article will be updated with analysis of remaining sections in which changes been proposed by Finance bill 2023.
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