Union Budget 2023-Key highlights 1 February 2023 –Indirect tax proposals
Amendments proposed in Goods and Services Tax 2017
1. POSITIVE IMPACT:-
a. Composition Scheme shall now be allowed to the person making supply of GOODS through ecommerce operators who is required to collect TCS u/s 52.
b. Giving overriding effect to Section 23 on Section 22(1) and 24. As a result, cases where tax not liable but mandated by S.24 are now excluded from registration condition.
c. Empowering to prescribe rule and procedure for calculation of interest on delayed refunds beyond 60 days.
d. Decriminalization of offenses in GST such as Preventing the officer in discharge of duties, tampering of material evidences, Fails to supply required information or false information.
e. Imprisonment for 1 year is applicable to Fake Invoicing only and not any other offence i.e. increase in monetary limit to launch prosecution in case of any other offence to 2 crores.
f. Simplification of Compounding Provisions.
g. Reduction of amount for compounding to now range from 25% of tax to 100% of tax.
h. Prescribing the manner and conditions for sharing of information such as registration details, GSTR-1 particulars, GSTR-3B particulars, e-invoice details. EWB details between RTPs on GSTIN portal.
i. Para 7 and 8 of SCH III now made retrospective from 01st July 2017. Earlier 01st Feb 2019. No refund allowed for such taxes, if paid.
2. NEGATIVE EFFECT
a. Widening of meaning of “Exempt Supply” for the purposes of Section 17(3) i.e. for Rule 42/43 reversals. The same now includes High Seas Sales of W/H supplies ONLY before HC clearance.
b. ITC in respect of CSR activities shall be disallowed u/s 135 of the Companies Act, 2013.
c. Prohibition on filling of GSTR-1/ IFF, GSTR-3B, GSTR-8 & Annual return after 3 years from the due date of such return subject to exceptions.
d. Introduction of Penal provisions on E-Commerce Operators for contraventions of supply of goods by URP or Composition.
e. Excluding compounding for fake invoicing transactions.
f. Removal of conditions in IGST Act for OIDAR and widening tax ambit and clarification added.
g. Widening of OIDAR service definition.
3. RATIONAL EFFECT
a. Rationalized the new scheme of composition applicable to a person making supply of SERVICES ONLY through e-commerce operators who is required to collect TCS u/s 52. (Scheme in S. 10(2A))
b. Alignment of 2nd Proviso to Section 16(2) with Rule 37. Not to be added to OTL, rather pay the tax.
c. Making 3rd Proviso more specific in respect of ITC re-availement after payment is “made to the supplier”.
d. Rationalized the scheme of ITC and ambiguity in section 54 to the current scheme of Self assessed ITC.
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