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Central Goods and Services Tax Act, 2017 (CGST Act)

Section 10: Composition Levy

  • Currently, section 10(2)(d) and 10(2A)(c) of the CGST Act restricts the registered person supplying goods through ecommerce operator from opting the composition scheme under the GST law.
  • It has been proposed to amend section 10(2)(d) and 10(2A)(c) of the CGST Act and omit the word ‘goods’. Consequently, the registered persons engaged in supplying goods through electronic commerce operators will also be eligible to opt to pay tax under the Composition Levy. 

Section 16: Eligibility and Conditions for taking input tax credit

  • As per second proviso to section 16(2) of the CGST Act, in case the recipient fails to pays its supplier within 180 days from the date of issue of invoice then the amount of input tax credit availed shall be added to the output tax liability of the said recipient alongwith interest.
  • To align the said provision with the current return filing provisions under the GST law the, amendments has been done in second and third proviso to section 16(2) of the CGST Act.

Union Budget 2023 - Proposed Amendments In GST

Section 17: Apportionment of credit and blocked credits

  • Section 17(2) of the CGST Act restricts the credit of goods or services or both used for making the exempt supplies.
  • Now it has been proposed that for the purpose of section 17(2) of the CGST Act, supply of warehoused goods before clearance for home consumption shall be treated as exempt supply and its credit shall not be allowed.
  • It has further been proposed that no credit shall be allowed for the goods or services or both used by the registered person to meet its corporate social responsibility, as referred to in section 135 of the Companies Act, 2013. 

Section 23: Persons not liable for registration

  • Section 23 of the CGST Act exempts certain category of persons from getting registration under the CGST Act. The said section came in to force on 22.06.2017.
  • Now the said section has been proposed to be amended to make the said section retrospectively applicable from 01.07.2017 so as to provide exemption from registration to the persons who are compulsory required to get registered in terms of section 22(1) or section 24 of the CGST Act, if they are covered under the amended section 23(1).

Section 37: Furnishing the details of the outward supplies

  • Section 37 lays down the provision regarding the furnishing of details for outward supplies. Currently, there is no time limit to furnish the details of outward of supplies for a tax period in GSTR-1.
  • Now, it has been proposed to insert section 37(5) which states that no details of outward supplies shall be furnished after 3 years from the due date of furnishing the same.

Section 39: Furnishing of returns

  • Section 39 of the CGST Act lays down the provision for filing of return of inward and outward supplies (i.e. GSTR-3B). Currently, there is no restriction of time limit for filing the same.
  • Now, it has been proposed that no return shall be filed after the expiry of 3 years period from the due date of filing the said return. 

Section 44: Annual Return

  • Section 44 of the CGST Act lays down the provision regarding the filing of annual return (GSTR-9). Currently, the said return has to be filed within the specified time limit to avoid any late fee. However, there is no time limit beyond which the said return cannot be filed.
  • Now, the section has been proposed to amended to provide a time limit of 3 years from the due date of furnishing the said return within which the said return can be filed. 

Section 52: Collection of tax at source

  • Section 52(4) of the CGST Act lays down the provision regarding filing of statement (in GSTR-8) by every electronic commerce operator. As per the said section, the said return has to be filed within the specified time limit to avoid any late fee. However, there is no time limit beyond which the said return cannot be filed.
  • Now, the section has been proposed to amended to provide a time limit of 3 years from the due date of furnishing the said return within which the said return can be filed.

Section 54: Refund of tax

  • Currently section 54(6) of the CGST Act, in case of refund claim for zero rated supply, enables the proper officer to grant the refund equals to 90% of the total refund claim on provision basis, subject to fulfillment of other specified conditions. However, while allowing the said provisional refund, the amount of input tax credit provisionally accepted by the applicant has to be excluded.
  • Now, it has been proposed to amend section 54(6) of the CGST Act to remove the reference of provisional acceptance of input tax credit, to align the same with the present module of GST wherein the credit is claimed on self assessment basis in accordance with section 41(1) of the CGST Act.

Section 56: Interest on delayed refunds

  • Section 56 of the CGST Act lays down the provision regarding payment of interest to the refund applicant in case, the refund application is not processed within 60 days from the date of application. 
  • Now, the said section has been proposed to be amended to provide the manner and conditions subject to which the said interest shall be computed.

Section 122: Penalty for certain offenses

  • Section 122 of the CGST Act lays down the penalties for the contraventions specified therein.
  • Now, it has been proposed to insert sub-section (1B) in it which states that any electronic commerce operator who-

(a) allows a supply of goods or services or both through it by an unregistered person (other than a person exempted from registration) to make the said supply;

(b) allows an inter-State supply through it by a person who is not eligible to make such inter-State supply; or

(c) fails to furnish the correct details in its GSTR-8 of any outward supply of goods effected through it by a person exempted from obtaining registration under this Act,

shall be liable to the penalty, higher of, Rs.10,000 or the amount equivalent to tax involved had such supply been made by a registered person other than the composite taxable person.

Section 132: Punishment for offenses

  • Section 132 of the CSGT lays down punishment provisions for the specified offenses which includes both payment or penalty and imprisonment.
  • Now, it has been proposed to amend section 132 by omitting section 132(1)(g), (j) and (k) which leads to decriminalization of the following offenses:

(a) Obstructing and preventing any officer in the discharge of his duties under the CSGT Act

(b) Tampering or destroying any material evidence or evidence

(c) Failing in supplying any information which is required to be supplied under the CGST Act or the rules made thereunder or supplying the false information;

  • Further, amendment has also been proposed u/s 132(1)(iii) to increase the threshold for imprisonment from one hundred lakh rupees to two hundred lakh rupees. However, the proposed increase in threshold shall not be applicable in case of issue of invoice without actually supplying goods or services or both.

Section 138: Compounding of offenses

  • Section 138 of the CGST Act lays down the provision regarding compounding of offenses. Sub-section 2 of the said section specifies certain offenses wherein the compounding shall not be allowed.
  • Now, it has been proposed to amend section 138(2) of the CGST Act, as follows:

(a) Compounding shall be allowed only once in respect to the offenses mentioned u/s 132(1), after the proposed amendment, as discussed above.

(b) No compounding shall be allowed in case of offense involving of issuance of invoice without actually supplying goods or services or both.

(c) Currently no compounding was allowed for the persons who are involved in an act which is an offense both under the GST law and also under any other law in force. However, the same has been omitted.

  • It has been further proposed to amend the minimum and maximum limit of the amount of compounding offences as 25 per cent of the tax involved and 100 per cent of the tax involved, respectively.

Section 158A: Consent based sharing of information furnished by taxable person

  • It has been proposed to insert a new section in the CGST Act wherein the certain specified information furnished by the registered person shall be shared by the GST portal with other systems, as may be notified.
  • As per the proposed section, following information shall be shared:

(a) Particulars furnished at the time of registration, in GSTR-3B and annual return;

(b) Particulars uploaded on the common portal for preparation of invoice, details of outward supplies in GSTR-1 and particulars furnished in E-way bill.

(c) Such other details as may be prescribed.

  • For the purpose of sharing the above information, consent of the supplier shall be obtained. Consent of recipient shall be obtained where such details include identity information of the recipient.

Schedule III: Activities or transactions which shall be treated neither as a supply of goods nor a supply of services

  • Under Schedule III, it has been proposed to give retrospective exemption to the following entries:

(a) Supply of goods from a place in the non-taxable territory to another place in the non-taxable territory without such goods entering into India.

(b) Supply of warehoused goods to any person before clearance for home consumption;

(c) Supply of goods by the consignee to any other person, by endorsement of documents of title to the goods, after the goods have been dispatched from the port of origin located outside India but before clearance for home consumption.

Integrated Goods and Services Tax Act, 2017 (IGST Act) 

Section 2: Definition

Definition of non-taxable online recipient

  • Under section 2 of the IGST Act, the definition of “non-taxable online recipient” has been proposed to be amended by omitting the condition of receipt of online information and database access or retrieval services (OIDAR) for purposes other than commerce, industry or any other business or profession so as to provide for taxability of OIDAR service provided by any person located in nontaxable territory to an unregistered person receiving the said services and located in the taxable territory. Vide the said proposed amendment, the scope of the non taxable online recipient has been widened.
  • For the purpose of the above definition, it has been proposed that the persons who are registered only for the purpose of deducting tax u/s 51, shall also be treated as unregistered persons.

Definition of online information and database access or retrieval services

  • Definition of “online information and database access or retrieval services” has also been proposed to be changed by omitting the condition of rendering of the said supply being essentially automated and involving minimal human intervention

The above amendments shall be made effective will come into effect on the date of its enactment, unless otherwise specified. 

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Compiled by : CA Palash Sharma | Partner, M/s Sharma Pareek & Associates | 9782115992, 9672149979

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