GST Amendments w.e.f. 01.10.2023

[Swapnil Jain]

Exports

Section 16 of IGST Act

• Earlier, there were two options to exporters Export with payment of tax and export without payment of tax. An amendment has been made to take away the option and now it provides specifically for export of goods/services without payment of tax.

The government has been vested with powers to specify the class of persons or class of goods/services which can be exported with payment of tax and subsequent refund.

N.N.01/2023 dated 31.07.2023 has been issued to notify that all the export of goods or services shall be allowed to be made with payment of tax except for goods like cigarette etc. as mentioned in the notification.

Presently, no notification has been issued to notify the class of persons who may be allowed to make zero-rated supplies with payment of taxes. Hence, supplies to SEZ with payment of tax shall not be allowed until notified.

• Substantive provision has been inserted in law to receive the export proceeds within the time limit prescribed under FEMA. Earlier it was only through rules, such restriction was present in law.
• Supply of goods/services to SEZ shall be zero rated only if it is used for authorized operations of the SEZ.

E commerce Operators (ECO)

Section 10

• The restriction placed on registered persons engaged in supplying goods through ECO from opting to pay tax under the Composition Levy has been done away with. Now such persons can undertake registration under the composition scheme and supply goods through ECO.
• ECO are now required to follow a special procedure for supplies made through them by composition taxpayers and supply of goods by unregistered persons as below:

Supplies made by Composition taxpayer	Supply of goods by unregistered persons
No inter-State supply of goods by the taxpayer	No inter-State supply of goods by the taxpayer
Collection of tax at source by the ECO	No collection of tax at source by the ECO
Mandatory furnishing of supply details through FORM GSTR-8 on the common portal	Mandatory furnishing of supply details through FORM GSTR-8 on the common portal
	ensure that such supplier has obtained an enrollment number

• A new sub-section (1B) in section 122 of the CGST Act has been inserted to provide for penal provisions applicable to ECO in case of contravention of provisions relating to supplies of goods made through them by unregistered persons or composition taxpayers.
• Amendment in Form GSTR 8 to include details of supplies made by Unregistered persons through ECO.
• GST registration exemption for online seller of Goods with an aggregate turnover in the previous FY and the current FY not exceeding the specified amount are exempted from obtaining registration under the Act.
• Restrictions:
  • Such a supplier cannot engage in inter-State supply of goods.
  • Restrict to sell goods only in one State/UT of registration.
  • Before making a supply, the seller must obtain an enrollment number.
  • Each seller can be granted only one enrolment number in a State or Union territory.
  • If these exempted sellers are subsequently granted registration under section 25 of the Act, their enrolment number will become invalid from the effective date of registration.

Input Tax credit

Section 17 and Rule 43

• ITC reversal shall be required for supply of warehoused goods to any person before clearance for home consumption.
• Input tax credit (ITC) will not be available for goods or services used in activities relating to Corporate Social Responsibility (CSR).
• Amendment in Section 54 of the CGST Act to remove the reference to provisional accepted ITC and align it to the present scheme of availing ITC on self-assessment basis u/s 41 of the CGST Act.

Schedule III

• Merchant trading, in bond sales and high sea sales that were covered under Schedule III w.e.f. February 01, 2019, are now to be covered under Schedule III w.e.f. July 1, 2017, to remove the ambiguity for the intervening period.

However, no refund of tax paid shall be available in cases where any tax has already been paid in respect of such transactions/ activities during the period 01-07-2017 to 31-01-2019.

Returns

Section 37, 39, 44, 52

• Filing of returns and statements (GSTR 1, GSTR 3B, GSTR 9, GSTR 8) will not be allowed after three years from the relevant due dates.

Section 62

• Non-filers of GST returns have a window of 60 days (earlier it was 30 days) from the date of ASMT-13 to file their returns and get their ASMT-13 withdrawn. Further, the returns can be filed beyond 60 days within a further period of 60 days subject to payment of an additional late fee of one hundred rupees for each day of delay beyond sixty days and the ASMT 13 shall be withdrawn.

Section 16

• Minor changes have been made to align the same with the return-filing system. The ITC availed by the recipient on the invoices whose payment has not been made within a period of 180 days shall be paid by the recipient along with the interest leviable u/s 50.

Registration

Section 23

• The government, on the recommendation of the council, may specify the category of persons who may be exempted from obtaining registration under this Act. Such persons shall be exempted from registration even though they might be liable for registration u/s 22(1) or 24.

Section 30 and Rule 23

• The time period to submit an application for revocation of cancellation of GST registration has been extended from 30 days to 90 days from the date of order of cancellation. Further, this time period can be extended for a further period of 180 days by the designated officer.

Interest on Delayed Refunds

Section 56 and Rule 94

• Section 56 of the CGST Act has been amended to provide for an enabling provision to prescribe manner of computation, conditions, and restrictions for interest on delayed refund for the period of delay beyond 60 days from the date of receipt of application.
• The following period shall be excluded from the period of delay of refund:
  • any period beyond 15 days of receipt of notice in FORM GST RFD-08 that the applicant takes to furnish a reply in FORM GST RFD-09 submit additional documents or reply and
  • Time taken either by the applicant for furnishing or validating the correct bank details, where the amount of refund sanctioned could not be credited to the bank account furnished by the applicant.

Consent based sharing of information furnished by taxable person.

Section 158A and Rule 163

• A new section 158A and Rule 163 in the CGST Act is being inserted to provide for prescribing manner and conditions for sharing of the information furnished by the registered person in his application for registration, GSTR 1, GSTR 3B, GSTR 9, E invoice, E waybill as may be prescribed, on the common portal with such other systems, as may be notified.  
• W.e.f. 01.10.2023, “account aggregator”, as defined in the Non-Banking Financial Company - Account Aggregator (Reserve Bank) Directions, 2016, has been notified as the system with which the information can be shared.
• The sharing of information shall be done after obtaining the consent of the supplier in all cases and of the recipient in cases where his identity is involved.

Online Information and Database Access or Retrieval Services

Section 2 of IGST Act, Rule 64 of CGST Rules and Form GSTR 5A          

• The definition of non-taxable online recipient has been simplified by removing the condition of receipt of OIDAR for purposes other than commerce, industry or any other business or profession.
• The condition of minimal human intervention has been removed from the definition of “Online Information and Database Access or Retrieval Services”, thus placing emphasis only on information technology required to provide such a service.
• Rule 64 and Form GSTR 5A have been amended to include details of service provided by OIDAR operators to non-taxable online recipients or to a registered person.

Place of supply

• Amendments in section 12(8) & 13(9) of the IGST Act to remove ambiguity for determining Place of supply w.r.t. transportation of goods.

E invoicing and E waybill

• As per the Notification No. 78/2020 dated 15th Oct 2020, taxpayers having Aggregate Annual Turn Over (AATO) above Rs 5 Crore, shall use valid 6-digit HSN code in e-Invoices and e-Waybills and other taxpayers shall use at least 4-digit HSN code (only for B2B supplies) in E-Invoices and E-Way Bills. This will be made Mandatory from 1st October 2023 in e-Waybill and e-Invoice Systems.

Online Gaming

• The decision to impose a 28% tax on the full-face value of bets placed on online gaming will be implemented from October 1, 2023. The GST Council will review the implementation of the 28% GST on online gaming and casinos after six months.

RCM on Ocean Freights

• In the decision of Apex Court in case of UNION OF INDIA & ANR. VERSUS M/S MOHIT MINERALS PVT. LTD. THROUGH DIRECTOR - 2022 (5) TMI 968 - SUPREME COURT  it was determined that Notification No. 8/2017 – IGST (Rate) and Notification No. 10/2017 – IGST (Rate), both dated 28.6.2017, which aimed to impose IGST on ocean freight by considering the importer in India as the service recipient of the transportation service, were found to be ultra vires the IGST Act, 2017.
• To address this issue, the above notifications have been amended to eliminate the taxation of ocean freight on a reverse charge mechanism (RCM) basis on the importer of goods for services provided by foreign shipping line, w.e.f. 1.10.2023.