CA Palash Sharma
Introduction: The Union Budget 2024 introduces significant amendments to the Goods and Services Tax (GST) framework, focusing on areas such as Input Service Distribution and penalties for non-registration of specified machines. This article provides a detailed analysis of the proposed changes, aiming to offer clarity on the implications for businesses and taxpayers.
UNION BUDGET 2024
PROPOSED AMENDMENTS IN GST
Central Goods and Services Tax Act, 2017 (CGST Act)
Section 2(61) and Section 20: Input Service Distributor and Manner of distribution of credit
- It has been proposed to amend the definition of Input Service Distributor as the office of the supplier who receives the tax invoices towards the input services for or on behalf of distinct persons. The said input services shall also include services on which tax is payable on reverse charge basis u/s 9(3) and (4) of the CGST Act.
- Currently, the conditions to distribute the said credit are specified u/s 20 of the CGST Act. However, the said section has now been proposed to be substituted and the revised manner to distribute the credit shall be prescribed.
Section 122A: Penalty for failure to register certain machines used in manufacture of goods as per special procedure.
- A new Section 122A has been proposed to be inserted which will be an overriding section. It imposes penalty on the person who is required to comply with the special procedure relating to registration of machines u/s 148 of the CGST Act, for contravention of the said special procedure. The amount of penalty shall be one lakh rupees for every machine not so registered. The said penalty shall be in addition to any other penalty under Chapter XV or any other provisions of Chapter XV of the CGST Act.
- In addition to the aforesaid penalty, every machine shall be liable for seizure and confiscation. However, no confiscation shall be done if the following conditions are satisfied:
(a) the penalty so imposed is paid, and
(b) the registration of such machine is made in accordance with the special procedure within three days of the receipt of communication of the order of penalty
Conclusion: The proposed GST amendments in the Union Budget 2024 signify a nuanced shift in the tax landscape. Businesses must closely evaluate the changes in Input Service Distribution and understand the implications of non-compliance with the new machine registration procedure. The article serves as a comprehensive guide, aiding taxpayers in navigating the evolving GST framework and adapting to the impending modifications.
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