CBIC notifies amendment in section 16 of CGST Act 2017 wef 01st October 2023 vide Notification No. 27/2023–Central Tax Dated: 31st July, 2023.
Section 123 of the Finance Act, 2021 introduces amendments to section 16 of the CGST Act, 2017. The changes include the insertion of the words “for authorised operations” in sub-section (1), clause (b) of the Integrated Goods and Services Tax Act. Additionally, sub-section (3) is substituted, enabling registered persons making zero-rated supplies to claim refunds of unutilized input tax credit without payment of integrated tax, subject to prescribed conditions and procedures.
Furthermore, the Government, on the recommendation of the Council, can specify a class of persons making zero-rated supplies on payment of integrated tax and claiming refunds of the tax paid, as well as a class of goods or services that may be exported on payment of integrated tax, with the supplier eligible to claim a refund of the tax paid.
Conclusion: The provisions of section 123 of the Finance Act, 2021 will come into force on October 1, 2023. These amendments aim to facilitate zero-rated supplies and streamline the process of claiming refunds, providing clarity and benefits to registered persons involved in such transactions.
Extract of Section 123 of Finance Act, 2021 (13 of 2021)
Amendment of section 16 of CGST Act, 2017
In the Integrated Goods and Services Tax Act, 2017, in section 16, –
(a) in sub-section (1), in clause (b), after the words “supply of goods or services or both”, the words “for authorised operations” shall be inserted;
(b) for sub-section (3), the following sub-sections shall be substituted, namely:––
“(3) A registered person making zero rated supply shall be eligible to claim refund of unutilised input tax credit on supply of goods or services or both, without payment of integrated tax, under bond or Letter of Undertaking, in accordance with the provisions of section 54 of the Central Goods and Services Tax Act or the rules made thereunder, subject to such conditions, safeguards and procedure as may be prescribed:
Provided that the registered person making zero rated supply of goods shall, in case of non-realisation of sale proceeds, be liable to deposit the refund so received under this sub-section along with the applicable interest under section 50 of the Central Goods and Services Tax Act within thirty days after the expiry of the time limit prescribed under the Foreign Exchange Management Act, 1999 for receipt of foreign exchange remittances, in such manner as may be prescribed.
(4) The Government may, on the recommendation of the Council, and subject to such conditions, safeguards and procedures, by notification, specify––
(i) a class of persons who may make zero rated supply on payment of integrated tax and claim refund of the tax so paid;
(ii) a class of goods or services which may be exported on payment of integrated tax and the supplier of such goods or services may claim the refund of tax so paid.”.
Ministry of Finance
(Department of Revenue)
(Central Board of Indirect Taxes and Customs)
New Delhi
Notification No. 27/2023–Central Tax | Dated: 31st July, 2023
S.O. 3421(E).— In exercise of the powers conferred by clause (b) of sub-section (2) of section 1 of the Finance Act, 2021 ( 13 of 2021), the Central Government hereby appoints the 1st day of October, 2023, as the date on which the provisions of section 123 of the said Act shall come into force.
[F. No. CBIC-20006/20/2023-GST]
ALOK KUMAR, Director
