GST Budget 2024 Amendments At A Glance

The GST budget amendments for 2024 bring about several crucial changes that impact various aspects of the GST framework. These amendments include modifications to levy provisions, demand and recovery processes, ITC availment, and time of supply rules. This comprehensive article provides an overview of these significant changes, helping businesses and professionals navigate the updated GST landscape effectively.

Clause 110, 147, 151

Extra Neutral Alcohol for alcoholic liquor outside GST levy

> As per the amended leviability provision, Extra Neutral Alcohol used in manufacture of alcoholic liquor for human consumption would be out of the purview of GST.

Clause 111, 116, 119, 121, 122, 123, 125, 126, 127, 128, 129, 130, 135, 136, 137(b), 141

Consequential additions to reference of Section 74A – new demand provision

> As a consequence of the insertion of new demand and recovery provision under Section 74A, relevant insertions of Section 74A have been made where Section 73 or 74 had been referred.

Clause 112, 148, 152, 153

Waiver of additional taxes in matters of general practice of trade / industry

> An overriding provision has been inserted for the general practices currently prevailing.

> The general practice may be causing any of the following:

• • Payment of taxes where no tax is being levied as per general practice
  • Higher payment of tax whereas lower tax is being levied as per general practice

> In such cases, no further taxes would be required to be paid upon notification by the Government

Clause 113

Time of supply modified under RCM for registered / unregistered suppliers

> In respect of Reverse charge, separate time of supply have been provided for supplies received from

• • Registered suppliers
  • Unregistered suppliers

> For supplies received from registered suppliers, the time of supply would be earlier of:

• • Date of payment as per books of recipient or debit in bank whichever is earlier
  • Date immediately following 60 days of the date of issue of invoice by the supplier in all cases where supplier is required to issue invoices

> For supplies received from unregistered suppliers, the time of supply would be earlier of:

• Date of payment as per books of recipient or debit in bank whichever is earlier
• Date of issue of invoice where invoice is to be issued by recipient

Clause 114, 146

ITC availment extension for past periods and revocation cases

> In respect of the FY 2017-18, 2018-19, 2019-20 and 2020-21, ITC would be available in any GSTR-3B filed upto 30/11/2021. This would put to rest all disputes where the ITC had been availed after the time limit u/s 16(4).

> However, no refund would be provided where a person has already made payment of taxes or ITC reversal.

> If the registration was cancelled for a registered person and the said cancellation is revoked thereafter, the ITC would be available to the recipient subject to the following conditions:

• • ITC was not restricted u/s 16(4) on the date of order of cancellation
  • ITC was availed within later of the following time limit:

30^th November following the financial year to which the invoice / debit note pertains whichever is earlier

30 days from the date of revocation of cancellation for the return period from the date of cancellation of registration till the date of order of revocation

Clause 115

ITC not blocked for recipient if payment made by supplier in evasion cases

> There is no requirement of payment of taxes under Section 129 and 130. Therefore, consequently the blockage of ITC u/s 17(5) for payment under these sections have been removed.

> Sub-section (5) of section 17 of the CGST Act is being amended, so as to restrict the non-availability of input tax credit in respect of tax paid under section 74 of the said Act only for demands upto Financial Year 2023-24

> From 2024-25, there would be no blockage of ITC for taxes paid by the supplier through demand and recovery provisions. However, this would continue to be subject to the time limit for ITC availment u/s 16(4).

Clause 117

Conditions for revocation of cancellation of registration

> The conditions and restrictions for the revocation of cancellation of registration would be prescribed through the rules

Clause 118

Time limit for self-invoice issuance and scope of unregistered persons

> Section 31(3)(f) of the CGST Act is being amended, so as to incorporate an enabling provision for prescribing the time period for issuance of invoice by the recipient in case of reverse charge mechanism supplies from unregistered persons.

> If a person is registered solely for the purpose of TDS, he would still be considered as an unregistered person under GST.

Clause 120

Mandatory furnishing of GSTR-7 for all applicable taxpayers

> For all persons required to deduct TDS, mandatory furnishing of GSTR-7 would be required irrespective of whether any deduction has been made in the said month or not.

> It also empowers the Government to prescribe by rules, the form, manner and the time within which such return shall be filed

Clause 124

Refund not allowed in case of export duty and Restriction of refund removed on duty drawback for CGST portion

> In all cases where the zero rated supplies (exports and supply to SEZ) are subject to export duty, refund of unutilized ITC would not be allowed.

> Further, given that the drawback is no longer applicable to CGST, the restriction of refund blockage on it has been removed

Clause 131

Attendance of summons by authorized representative at officer’s discretion

> Currently, it is mandated that only a person who has been called under summons can attend the same.

> After the amendment, a person can attend through an authorized representative. However, such authorized representative would be allowed only under the direction of the officer.

> The person would be bound to attend the same and state the truth during examination or make statements or produce documents and things as required.

Clause 132

Removal of Demand u/s 73 prospectively for insertion of 74A

> Section 73 would be applicable only till the Financial year 2023-24.

Clause 133

Removal of Demand u/s 74 prospectively for insertion of 74A

> Section 74 would be applicable only till the Financial year 2023-24.

Clause 134

New time limit and provisions for all demand notices and order cases

> A common section 74A has been inserted for all demand and recovery provisions in lieu of Section 73 and 74

>  Common time limit for all evasion and non-evasion cases has been prescribed to be 42 months from the due date for furnishing of annual return for the relevant FY

>  The time limit for passing of order would be 12 months from the date of issue of notice. Where the Commissioner or any officer not below the rank of JC records the reasons for delay in writing before the expiry, the said period can be extended by a further 6 months.

>  The time limit for reduced penalty for all cases has been increased from 30 days of notice / order to 60 days of notice / order

Clause 137

Reduction of predeposit for Appeal cases

> The maximum amount of predeposit for filing appeal before Appellate Authority has been reduced from Rs. 25 crores to Rs. 20 crores under CGST.

Clause 138

Tribunal empowered to hear Anti Profiteering cases

>  The Appellate Tribunal have got the jurisdiction to also hear the cases of Anti Profiteering. Such matters would be heard only by the Principal Bench

> Further, the Government have got the power to prescribe certain cases or class of cases which can be heard by the Principal Bench only

Clause 139, 150

Due date of Tribunal appeal filing and the predeposit

>  This empowers the Government to notify the date for filing appeal before the Appellate Tribunal and provide a revised time limit for filing appeals or application before the Appellate Tribunal. The said amendment is made effective from the 1st day of August, 2024.

>  This also enables the Appellate Tribunal to admit appeals filed by the department within three months after the expiry of the specified time limit of six months.

> The reduction of the maximum amount of pre-deposit for filing appeals before the Appellate Tribunal would be as follows:

• • from the existing 20% to 10% of the tax in dispute and
  • also reduce the maximum amount payable as pre-deposit from Rs. 100 crores (CGST – Rs. 50 crores and SGST – Rs. 50 crores or IGST – Rs. 100 crores) to Rs. 40 crores (CGST – Rs. 20 crores and SGST – Rs. 20 crores or IGST – Rs. 40 crores)

Clause 140

Penalty only for e-commerce operators required to collect TCS

>  From 1^st October 2023, penalty had been prescribed for electronic commerce operators making contraventions of law

>  It has been provided that this would be applicable for electronic commerce operators who are required to collect TCS only

Clause 142

New Amnesty scheme for waiver of interest / penalty upon full tax payment for 2017-18 to 2019-20 non-evasion cases

>  A New Amnesty scheme has been proposed for certain tax periods in respect of non-evasion cases. The waiver would cover the entire interest and penalty under the case.

> The conditions for opting this scheme are as follows:

• • The Demand should pertain to the period from 1^st July 2017 to 31^st March 2020
  • The demand falls under any of the following categories:
• Notice has been issued u/s 73 but adjudication order not yet issued
• Adjudication order issued u/s 73 but first appeal not yet issued
• First appeal order issued but the order from Tribunal has not been issued
  • It would cover cases where notice was issued u/s 74 but was reclassified u/s 73 by Appellate Authority / Tribunal / Court
  • In case of Revision or Appeal by the Department before First Appellate Authority / Appellate Tribunal, the amnesty would be subject to the condition that the person pays the additional tax payable within 3 months of the order of Appellate Authority / Tribunal / Court / Revisional Authority
  • The entire tax amount as per the relevant demand / notice has been discharged within the due date to be specified (likely to be 31^st March 2025 as per the Council recommendations)
  • Interest and penalty would stand waived
  • No refund would be granted for the interest and penalty already paid in the case
  • This would be only for demand cases and not for erroneous refund
  • The Appeal or Writ Petition before the Appellate Authority / Tribunal / Court would be withdrawn within the specified due date
  • Once the proceedings stand concluded upon payment, no appeal can be made against the relevant adjudication / appeal order

Clause 143

Transitional credit for ISD for invoices before appointed date

>  Section 140(7) is being amended so as to enable availment of the transitional credit of eligible CENVAT credit on account of input services received by an Input Services Distributor prior to the appointed day, for which invoices were also received prior to the appointed date

Clause 144

Sunset clause for Anti Profiteering cases

>  The Government has been empowered to notify the date from which the Authority will not accept any application for anti-profiteering cases

Appellate Tribunal empowered to deal with anti-profiteering cases

> Apart from the Competition Commission of India, the Appellate Tribunal have also been included as an authority for dealing with Anti-profiteering cases

Clause 145

Activities of insurance not considered as supply

> The following activities would neither be considered as supply of goods nor as supply of services for the insurance industry:

• • Activity of apportionment of co-insurance premium by the lead insurer to the co-insurer for the insurance services jointly supplied by the lead insurer and the co-insurer to the insured in coinsurance agreements provided that the lead insurer pays the tax liability on the entire amount of premium paid by the insured.
  • Services by the insurer to the re-insurer, for which the ceding commission or the reinsurance commission is deducted from reinsurance premium paid by the insurer to the reinsurer provided that tax liability on the gross reinsurance premium inclusive of reinsurance commission or the ceding commission is paid by the reinsurer

Clause 149

No refund on export duty cases and class of supplies / persons who can make export with payment of tax

> 16(4) amended to provide for notification of class of persons who may make zero rated supplies of goods or services or both or class of goods or services which may be supplied on zero rated basis, and refund under export with payment of tax can be claimed.

> It would be in accordance with the provisions of Section 54 of the Central Goods and Services Tax Act, subject to such conditions, safeguards and procedures as may be prescribed.

> 16(5) provides that no refund on account of a zero-rated supply of goods shall be allowed in cases where they are subjected to export duty

Conclusion: The 2024 GST budget amendments introduce substantial changes aimed at simplifying tax compliance, providing relief for trade practices, and refining demand and recovery mechanisms. These amendments address various industry concerns and streamline GST processes, ensuring a more efficient and transparent tax regime. Businesses and tax professionals must familiarize themselves with these updates to ensure compliance and leverage the benefits offered by the new provisions.