RECENT DEVELOPMENTS IN GST

[Dr. Sanjiv Agarwal]

According to recent SBI and ICRA research reports, the economic growth in Q1 of 2023-24 is expected to be over 8% in the range of 8.3% to 8.5%. This is attributable to pick-up in services sector and growth in manufacturing, improved investment and surge in government expenditure. The growth is also reflected in the GST numbers. On the other hand, a group of 20 economists have estimated the same between 7.5% and 8.5% with 7.8% as median. According to RBI, Indian economy may regain momentum in Q2 of current fiscal 2022-23. This should counter balance unfavorable base effects. GDP growth for first quarter is expected to be 7.8%.

India’s digital economy is also growing at an accelerating pace and is expected to contribute about 20% to the GDP by the year 2026. It is presently 11%. Innovation and technology are now becoming the key drivers for future growth including its pace.

Finance Minister has advised chartered accountants to embrace technology in their professional working and that such an endeavor would yield them huge productivity gains in their functioning.

An interesting fact on GST has emerged. GST contribution as a share of GDP is now at par with personal income tax. Share of GST in GDP in 2022-23 was 3.1% which is equal to 3.1% personal income tax and 3.0% corporation tax. Custom duty shared is 1.2% while central excise duty contribution is just 0.8%.

The Central Government has introduced three Bills in the Parliament to replace age old criminal laws in the Lok Sabha. These have since been referred to a Select Committee to vet the same. The three legislations which are sought to be replaced form the backbone of criminal jurisprudence in India and are the Indian Penal Code, 1860 (IPC); Indian Evidence Act, 1872 and Criminal Procedure Act, 1898 (CrPC). These continue to be on the statute book since over more than 125 years and even India becoming Independent 76 years earlier. These shall be replaced by Bhartiya Nyaya Sanhita (BNS), Bhartiya Sakshya Act and Bhartiya Nagarik Suraksha Sanhita (BNSS) respectively.

Finance Minister had introduced CGST Act (Amendment) Bill, 2023 and IGST Act (Amendment) Bill, 2023 in the Parliament on 11^th August, 2023 to implement decisions of GST Council to levy 28% tax on online gaming. Both the Bills have been passed by the Lok Sabha on same day and later by Rajya Sabha. These have since been enacted as Act Nos. 30 and 31 on 18.08.2023. This will come into effect from a notified date. It provides for defining online gaming, registration and change in scope of supply (Schedule III) etc. Similar changes including place of supply are stipulated in IGST Act, 2017. It is expected that all the states will also make the necessary amendments in state GST laws in next two months in the ongoing monsoon sessions or by way of an Ordinance on online gaming.

With the amendment laws, now there is sufficient clarity on taxation of online games, casinos and horse races. However, the new tax may add to more litigation on this levy. While the law would be applicable prospectively, the ongoing litigation would continue but the law may be looked as guidance for matters under dispute.

Recenlty, it was decided by GST Council tax all utility vehicles shall be subjected to compensation cess @ 22%. The Fitment Committee is expected to provide an explanation on ‘ground clearance’ criteria and its implementation for the purpose of levy of GST on utility vehicles. There is a confusion prevailing over ‘unladen ground clearance’.

The Indian government is launching a scheme for incentivizing seeking a bill every time a purchase is made. A cash prize ranging between Rs 10,000 to Rs 1 crore will be announced. The scheme - 'Mera Bill Mera Adhikar' invoice incentive scheme, will be launched in six states and Union Territories  from September 1, 2023, to begin with.

Amendment in Territorial jurisdiction

• CBIC has amended Notification No. 02/2017-Central Tax dated 19.06.2017 for changing Territorial jurisdiction for Guntur, Tirupati  and Visakhapatnam.
• CBIC has notified amendment in Territorial jurisdiction of Principal Commissioner / Commissioner of Central Tax and Central Tax Officers sub-ordinate to them in respect of:

Entry No.	City	Old Jurisdiction	New Jurisdiction
39	Guntur	Districts of Guntur, Krishna, West Godavari, PottiSriramulu Nellore and Prakasam in the State of Andhra Pradesh.   The Territorial waters and the seabed and sub soil underlying such waters from where the nearest point of the appropriate baseline is located in the state of Andhra Pradesh.	Districts of West Godavari, Krishna, NTR, Eluru, Guntur, Bapatla, Palnadu, Prakasam, SPS Nellore, mandals of Kovvur, Chagullu, Tallapudi, Nidadavole, Undrajavaram, Peravali, Devarapalle, Gopalapuram and Nallajerla of East Godavari District and mandals of Gudur, Chillakaur, Kota, Vakadu, Chittamur, Balayapalli, Venkatagiri, Dakkili, Ozili, Naidupet, Pellakur, Doravarisatram, Sullurpeta and Tada of Tirupati District in the state of Andhra Pradesh. The territorial waters and the seabed and sub soil underlying such waters from where the nearest point of the appropriate baseline is located in the state of Andhra Pradesh.”;
101	Tirupati	Districts of Chittoor, Anantapur, Dr. Y.S. Rajasekharreddy Cuddapah (Kadapa) and Kurnool in the State of Andhra Pradesh.	Districts of Chittoor, YSR Kadapa, Anantpur, Annamayya, Sri Satyasai, Nandyal, Kurnool and mandals of Buchi Naidu Kandriga, Varadaiahpalem, Satyavedu, Srikalahasti, Thottambedu, Renigunta, yerpedu, Kumara Venkata Bhupala Puram, Nagalapuram, Pichatur, Narayanavanam, Tirupati Urban, Tirupati Rural, Chandragiri, Pakala, Ramachandrapuram, Vadamalapet, Puttur, Yerravaripalem and Chinnagottigallu of Tirupati district in the State of Andhra Pradesh.”;
107	Visakhapatnam	Districts of Srikakulam, Vizianagram, Visakhapatnam and East Godavari in the State of Andhra Pradesh.	In the Districts of Srikakulam Vizianagaram, Visakhapatnam, Anarkapalli, Alluri Sitaramaraju, Parvatipurammanyam, Dr. B.R. Ambedkar Konaseema, Kakinada and mandals of Rajamahendravaram Urban, Rajamahendravaram Rural, Kadiam, Rajanagaram, Seethanagaram, Korukonda, Gokavaram, Anaparthi, Biccavolu and Rangampeta of East Godavari District in the State of Andhra Pradesh.”.

• This shall be effective from 04.04.2022.

(Source: Notification No. 39/2023-Central Tax dated 17.08.2023)

GST (Amendment) Acts

• CGST (Amendment) Act, 2023 has been legislated as Act No. 30 of 2023 as per Gazette Notification S.No. 33 dated 18.08.2023 of the Gazette of India.
• IGST (Amendment) Act, 2023 has been legislated as Act No 31 of 2023 as per Gazette Notification S.No. 34 dated 18.08.2023 of the Gazette of India.
• These shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint.  

[Source: Gazette Notifications published in The Gazette of India]