GST: Govt notifies section 11 to 13 of Finance Act (No. 8) 2024 vide Notification No. 16/2024–Central Tax | Dated: 6th August, 2024
The Indian government has notified sections 11 to 13 of the Finance Act (No. 8) 2024 through Notification No. 16/2024–Central Tax dated 6th August 2024. These amendments to the Central Goods and Services Tax (CGST) Act, 2017, will be effective from 1st October 2024 and 1st April 2025. Section 11 revises the definition of “Input Service Distributor” (ISD), specifying the office responsible for receiving and distributing input tax credits. Section 12 replaces the existing Section 20 of the CGST Act, detailing the manner of credit distribution by ISDs, including requirements for registration and the distribution method of central and integrated taxes. Section 13 introduces a new Section 122A, which imposes a penalty of ₹1 lakh per machine on manufacturers who fail to register certain machines under a special procedure outlined in Section 148 of the Act. Additionally, unregistered machines may be subject to seizure and confiscation unless penalties are paid and registration is completed within three days. These amendments aim to streamline GST processes and enforce compliance more effectively.
Extract of Section 11 to 13 of Finance Act, 2024 (8 of 2024)
11. Amendment of section 2.
In the Central Goods and Services Tax Act, 2017 (hereinafter referred to as the Central Goods and Services Tax Act), in section 2, for clause (61), the following clause shall be substituted, namely:––
‘(61) “Input Service Distributor” means an office of the supplier of goods or services or both which receives tax invoices towards the receipt of input services, including invoices in respect of services liable to tax under sub-section (3) or sub-section (4) of section 9, for or on behalf of distinct persons referred to in section 25, and liable to distribute the input tax credit in respect of such invoices in the manner provided in section 20;’.
12. Substitution of section 20.
For section 20 of the Central Goods and Services Tax Act, the following section shall be substituted, namely:––
“20. Manner of distribution of credit by Input Service Distributor.
(1) Any office of the supplier of goods or services or both which receives tax invoices towards the receipt of input services, including invoices in respect of services liable to tax under sub-section (3) or sub-section (4) of section 9, for or on behalf of distinct persons referred to in section 25, shall be required to be registered as Input Service Distributor under clause (viii) of section 24 and shall distribute the input tax credit in respect of such invoices.
(2) The Input Service Distributor shall distribute the credit of central tax or integrated tax charged on invoices received by him, including the credit of central or integrated tax in respect of services subject to levy of tax under sub-section (3) or sub-section (4) of section 9 paid by a distinct person registered in the same State as the said Input Service Distributor, in such manner, within such time and subject to such restrictions and conditions as may be prescribed.
(3) The credit of central tax shall be distributed as central tax or integrated tax and integrated tax as integrated tax or central tax, by way of issue of a document containing the amount of input tax credit, in such manner as may be prescribed.”.
13. Insertion of new section 122A.
After section 122 of the Central Goods and Services Tax Act, the following section shall be inserted, namely:––
“122A. Penalty for failure to register certain machines used in manufacture of goods as per special procedure.
(1) Notwithstanding anything contained in this Act, where any person, who is engaged in the manufacture of goods in respect of which any special procedure relating to registration of machines has been notified under section 148, acts in contravention of the said special procedure, he shall, in addition to any penalty that is paid or is payable by him under Chapter XV or any other provisions of this Chapter, be liable to pay a penalty equal to an amount of one lakh rupees for every machine not so registered.
(2) In addition to the penalty under sub-section (1), every machine not so registered shall be liable for seizure and confiscation:
Provided that such machine shall not be confiscated where––
(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.”.
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GOVERNMENT OF INDIA
MINISTRY OF FINANCE
(DEPARTMENT OF REVENUE)
CENTRAL BOARD OF INDIRECT TAXES AND CUSTOMS
Notification No. 16/2024–Central Tax | Dated: 6th August, 2024
S.O. …..(E).—In exercise of the powers conferred by clause (b) of sub-section (2) of section 1 of the Finance Act, 2024 (8 of 2024), the Central Government hereby appoints, —
(a) the 1st day of October, 2024, as the date on which the provisions of sections 13 of the said Act shall come into force;
(b) the 1st day of April, 2025, as the date on which the provisions of sections 11 and 12 of the said Act shall come into force.
[F.No. CBIC-20006/20/2023-GST]
(Raghavendra Pal Singh)
Director
