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Hello readers, Today I will discuss changes in GST in Union Budget 2023 in simplified manner-

Amendments in CGST ACT 2017-

1. Section 10- Composition Levy – Suppliers of goods through E-commerce operators will now be eligible to opt for the composition scheme-

Now Unregistered suppliers and composition taxpayers can now opt for the composition scheme to make intra -state supply of goods through e-commerce operators ,subject to certain conditions.

2. Section 16- Eligibility and conditions for taking input tax credit –

Earlier, In case recipient fails to pay to the supplier of goods or services the amount towards value of supply along with tax payable thereon with in period of 180 days from the date of issue of invoice by supplier ,an amount equal to ITC availed shall be added to his output tax liability along with interest thereon.

Proposed Amendment-  In case recipient fails to pay to the supplier of goods or services or both, other than the supplies on which tax is payable on reverse charge basis, the amount towards the value of supply along with tax payable thereon within a period of one hundred and eighty days from the date of issue of invoice by the supplier, an amount equal to the input tax credit availed by the recipient shall be paid by him along with interest payable under section 50, in such manner as may be prescribed: Also recipient would be entitled to re-avail the ITC on payment made by him to supplier towards value of supply along with tax thereon.

3. Section 17 – Apportionment of credit and blocked credit

Proposed Amendment- Restrict  availment of ITC in respect of certain transactions specified in Para 8(a) of Schedule III –

Supply of custom bonded warehouse goods before clearance for home consumption.

Above stated supply will be included in exempt supply.

But whether this amendment will be prospective or retrospective still not clear.

4. Section 17 (5) -Blocked ITC – ITC on CSR expenses (Corporate social responsibility) referred to in Section 135 of the companies act 2013 now blocked .

5. Section 23/22/24-  Persons who are required to take compulsory registration u/s 24 of CGST ACT 2017 need not to register themselves if they are not liable for registration /exempted u/s 23(1) of CGST ACT 2017. Very important amendment- A person engaged in exempted supply of goods or services  need not required to take compulsory registration even if required to do so as per section 24 of CGST ACT 2017.

6. Filling of belated GSTR-1, GSTR-3B, GSTR-9/9A & GSTR-8 not beyond three years of the due date-  Now three years time limit have  been allowed from due date of filling GSTR-1/GSTR-3B /GSTR-9/GSTR-9A/ GSTR-8 for furnishing these returns .

7. Section 54- Refund of tax- Provisional refund of 90 % of total amount claimed in case of zero rated supplies is being amended to remove the reference to provisionally accepted input tax credit to align with present scheme of availment of self assed input tax credit as per sec 41 (1) of the CGST ACT.

8. Section 56 -Interest on delayed refunds- In case refund is delayed beyond the period of 60 days then Interest will be calculated from the date of receipt of application till the date of refund.

9. New Section  122(IB) -Penalty on E-commerce operators- Penal provisions applicable to e-commerce operators in case of contravention of provisions relating to supplies of goods made through them by unregistered persons or composition taxpayers. So they need to build a system so that composition taxpayers need not make inter state supplies.

10. Section 132 – Decriminalization of certain offenses- Following offenses were decriminalized-

Clause (g) – obstruct or prevents any officer in the discharge of his duties.

clause (j) tampers with or destroys any material evidence or documents

clause (k) fails to supply any information.

Further, Monetary threshold for launching prosecution for offenses under the Act increased from 1 crore to 2 crores except in case of fake invoices.

11. Section 138 -Compounding of offenses- Following persons were excluded from compounding of offenses –

  • Issue of invoice without the supply of goods or services or both( Fake Invoices

Further , amount of compounding of offenses reduced except offense of fake invoices.

Existing compounding amount- Rs 20000 or 50 % to 150% of tax amount involved.

Proposed compounding amount – Rs 20000 or 25 % to 100 % of tax amount involved.

12. Retrospective amendment of changes in Schedule III

Certain activities such as-

    • Supply of goods from place outside the taxable territory to another place outside taxable territory
    • High Sea Sales
    • Supply of warehouse goods before their home consumption

Treated as neither supply of goods nor supply of services w.e.f 01.07.2017

It is also clarified that in case tax has been paid on above stated supplies , no refund of such tax shall be available.

13. Section 2(17 ) of  IGST ACT  2017 -Amendment in definition of OIDAR services – Widened the scope of services by excluding the condition of ‘’essentially automated and involving minimal human intervention’’ from the said definition.

14. Section 12(8) of IGST ACT-

Proviso to sub-section (8) of section 12 of the IGST Act is being omitted so as to specify the place of supply, irrespective of destination of the goods, in cases where the supplier of services and recipient of services are located in India.

But what about circular 184/16/2022 – dated 27.12.2022 – which states that supplier of services shall report place of supply as foreign country by selecting code as ‘foreign country’

That s all for today – Queries/doubts related to above mailed at [email protected]

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