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TMI BlogBUDGETARY CHANGES IN GST LAWSX X X X Extracts X X X X X X X X Extracts X X X X ..... BUDGETARY CHANGES IN GST LAWS - By: - Mr. M. GOVINDARAJAN - Budget - Dated:- 2-2-2023 - - Finance Bill 2023 The Finance Minister submitted her Budget in the Parliament on 01.02.2023. She also filed the Finance Bill, 2023 ( Bill for short) which brings many amendments to direct taxation as well as indirect taxes and some other Acts. Sections 128 to 142 of the Bill brought amendments to Central Goods and Services Tax Act, 2017 ( CGST Act for short) and Section 143 and Section 144 brought amendments to the Integrated Goods and Services Tax Act, 2017 ( IGST Act for short). Amendments to CGST Act Amendment to Section 10 - composition scheme Section 10(2)(d) of the CGST Act provides the registered person shall not be eligible to opt for Composition Scheme if he is not engaged in making any supply of goods or services through an electronic commerce operator who is required to collect tax at source under section 52. Section 10(2A)(c) of the CGST Act provides that a registered person, not eligible to opt to pay tax under composition scheme whose aggregate turnover in the preceding financial year did not exceed Rs.50 lak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hs, may opt to pay, in lieu of the tax payable by him under sub-section (1) of section 9 , an amount of tax calculated at such rate as may be prescribed, but not exceeding 3% of the turnover in State or turnover in Union territory, if he is not engaged in making any supply of goods or services through an electronic commerce operator who is required to collect tax at source under section 52 . Section 128 of the Bill proposes to omit the words goods or in the expression goods or services in the above said sub sections. Amendment to Section 16 Eligibility and conditions for taking ITC The second proviso to section 16(2)(d) provides that where a 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 180 from the date of issue of invoice by the supplier, an amount equal to the input tax credit availed by the recipient shall be added to his output tax liability, along with interest thereon , in such manner as may be prescribed. Section 129(i) of the Bill prop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oses to substitute the words paid by him along with interest under Section 50 for the words added to his output tax liability, along with interest thereon as highlighted in the above para. The third proviso to Section 16(2)(d) provides that the recipient shall be entitled to avail of the credit of input tax on payment made by him of the amount towards the value of supply of goods or services or both along with tax payable thereon. Section 129(ii) of the Bill proposes to insert the words to the supplier after the words made by him as highlighted in the above para. Amendment to Section 17 Apportionment of credit and block of credits Section 130 of the Bill proposed to amend Section 17(3) and Section 17(5) . Section 17(3) provides that the value of exempt supply shall be such as may be prescribed, and shall include supplies on which the recipient is liable to pay tax on reverse charge basis, transactions in securities, sale of land and, subject to clause (b) of paragraph 5 of Schedule II , sale of building. The explanation provides that the expression value of exempt supply shall not include the value of activities o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r transactions specified in Schedule III , except those specified in paragraph 5 of the said Schedule. The Bill proposed to substitute the following for the expression, except those specified in paragraph 5 of the said Schedule- except - The value of activities or transactions specified in paragraph 5 of the said Schedule; and the value of such activities or transactions as may be prescribed in respect of clause (a) of paragraph 8 of the said Schedule . Section 17(5) provides that gives a list of taxable supplies for which input tax credit is not available. The Bill proposed to insert a sub-clause 17(5)(fa). The newly inserted Section 17(5)(fa) provides that goods or services or both received by a taxable person, which are used or intended to be used for activities relating to his obligations under corporate social responsibility referred to in section 135 of the Companies Act, 2013. Amendment to Section 23 Persons not liable for registration Section 131 of the Bill proposed to substitute a new section 23 for the existing one. The newly substituted Section 23 provides that notwithstanding anything to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contrary contained in sub-section (1) of section 22 or section 24, the following persons shall not be liable to registration- any person engaged exclusively in the business of supplying goods or services or both that are not liable to tax or wholly exempt from tax under CGST Act or under the IGST Act; an agriculturist, to the extent of supply of produce out of cultivation of land; the Government may, on the recommendations of the Council, by notification, subject to such conditions and restrictions as may be specified therein, specify the category of persons who may be exempted from obtaining registration under CGST Act. Amendment to section 37 Furnishing details of outward supply Section 132 of the Bill proposed to insert a new sub-clause (5) to section 37 . The newly inserted section 37(5) provides that a registered person shall not be allowed to furnish the details of outward supplies for a tax period after the expiry of a period of three years from the due date of furnishing the said details. The Government may, on the recommendations of the Council, by notification, subject to such conditions and restrictions as may be spe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cified therein, allow a registered person or a class of registered persons to furnish the details of outward supplies for a tax period under sub-section (1), even after the expiry of the said period of 3 years from the due date of furnishing the said details. Amendment to section 39 Furnishing of returns Section 133 of the Bill proposed to insert a new sub-clause (11) to section 37. The newly inserted Section 37(11) provides that a registered person shall not be allowed to furnish a return for a tax period after the expiry of a period of three years from the due date of furnishing the said return. The Government may, on the recommendations of the Council, by notification, subject to such conditions and restrictions as may be specified therein, allow a registered person or a class of registered persons to furnish the return for a tax period, even after the expiry of the said period of 3 years from the due date of furnishing the said return. Amendment to section 44 Annual return Section 134 of the Bill proposed to renumber the existing section 44 as section 44(1) and proposed to insert a new section 44(2). The newly inserted section 44(2) provides t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat a registered person shall not be allowed to furnish an annual return for a financial year after the expiry of a period of 3 years from the due date of furnishing the said annual return. The Government may, on the recommendations of the Council, by notification, and subject to such conditions and restrictions as may be specified therein, allow a registered person or a class of registered persons to furnish an annual return for a financial year even after the expiry of the said period of 3 years from the due date of furnishing the said annual return. Amendment to section 52 Collection of tax at source Section 135 of the Bill proposed to insert a new sub-clause (15) to section 52. The newly inserted Section 52(15) provides that the operator shall not be allowed to furnish a statement under sub-section (4) after the expiry of a period of 3 years from the due date of furnishing the said statement. The Government may, on the recommendations of the Council, by notification, subject to such conditions and restrictions as may be specified therein, allow an operator or a class of operators to furnish a statement even after the expiry of the said period of 3 years from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the due date of furnishing the said statement. Amendment to Section 54 Refund of Tax Section 54(6) provides that the proper officer may, in the case of any claim for refund on account of zero-rated supply of goods or services or both made by registered persons, other than such category of registered persons as may be notified by the Government on the recommendations of the Council, refund on a provisional basis, 90% of the total amount so claimed, excluding the amount of input tax credit provisionally accepted , in such manner and subject to such conditions, limitations and safeguards as may be prescribed and thereafter make an order under sub-section (5) for final settlement of the refund claim after due verification of documents furnished by the applicant. Section 136 of the Bill proposed to omit the words excluding the amount of input tax credit provisionally accepted as highlighted in the above para. Amendment to Section 56 Interest on delayed refunds Section 56 of the CGST Act provides that if any tax ordered to be refunded under 54(5) to any applicant is not refunded within sixty days from the date of receipt of application ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under subsection (1) of that section, interest at such rate not exceeding six per cent. as may be specified in the notification issued by the Government on the recommendations of the Council shall be payable in respect of such refund from the date immediately after the expiry of sixty days from the date of receipt of application under the said sub-section till the date of refund of such tax. Section 137 of the Bill proposed to substituted the words for the period of delay beyond 60 days from the date of receipt of such application till the date of refund of such tax, to be computed in such manner and subject to such conditions and restrictions as may be prescribed for the words from the date immediately after the expiry of sixty days from the date of receipt of application under the said sub-section till the date of refund of such tax as highlighted in the above para. Amendment to Section 122 Penalty for certain offences Section 138 of the Bill proposed to inserted a new sub section (1B) to section 138. The newly inserted Section 138(1B) provides that any electronic commerce operator who allows a supply of goods or services or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... both through it by an unregistered person other than a person exempted from registration by a notification issued under CGST Act to make such supply; allows an inter-State supply of goods or services or both through it by a person who is not eligible to make such inter-State supply; or fails to furnish the correct details in the statement to be furnished under section 52(4) of any outward supply of goods effected through it by a person exempted from obtaining registration under CGST Act, shall be liable to pay a penalty of ten thousand rupees, or an amount equivalent to the amount of tax involved had such supply been made by a registered person other than a person paying tax under section 10, whichever is higher. Amendment to Section 132 - Punishment for certain offences Section138 of the Bill proposed to omit clauses (g) (j) and (k) of Section 132 of the CGST Act. Section 132(1) (g) - obstructs or prevents any officer in the discharge of his duties under this Act; Section 132(1)(j) - tampers with or destroys any material evidence or documents; Section 132(1)(k) - fails to supply any information which he is required to supply ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under this Act or the rules made there under or (unless with a reasonable belief, the burden of proving which shall be upon him, that the information supplied by him is true) supplies false information. Section 132(1)(l) - attempts to commit, or abets the commission of any of the offences mentioned in clauses (a) to (k) of this section. The Bill proposed to substitute the words clauses (a) to (f) and clauses (h) and (i) for the words clauses (a) to (k). Section 132 (1)(iii) - in the case of any other offence where the amount of tax evaded or the amount of input tax credit wrongly availed or utilized or the amount of refund wrongly taken exceeds Rs.1 crore but does not exceed Rs.2 crores, with imprisonment for a term which may extend to one year and with fine. The Bill proposed to substitute the words an offence specified in clause (b) for the words any other offence . Section 132(1)(iv) - in cases where he commits or abets the commission of an offence specified in clause (f) or clause (g) or clause (j), he shall be punishable with imprisonment for a term which may extend to six months or with fine or with both. The Bill propose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to omit the words or clause (g) or clause (j) clause (g) or clause (j) . Amendment to Section 138 Compounding of offences The Bill proposed to omit the following sub sections of 138 - Section 138 proviso (b) - a person who has been allowed to compound once in respect of any offence, other than those in clause (a), under this Act or under the provisions of any State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act or the Integrated Goods and Services Tax Act in respect of supplies of value exceeding one crore rupees; Section 138 proviso (e) - a person who has been accused of committing an offence specified in clause (g) or clause (j) or clause (k) of sub-section (1) of section 132; and Section 140 of the Bill proposed to substitute sections 138- proviso (a) and (c). The newly substituted section 138 proviso (a) - a person who has been allowed to compound once in respect of any of the offences specified in clauses (a) to (f), (h), (i) and (l) of sub-section (1) of section 132. The newly substituted section 138 proviso - a person who has been accused of committing an offence under clause (b) of sub-sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n (1) of section 132. Section 138 (2) provides that the amount for compounding of offences under this section shall be such as may be prescribed, subject to the minimum amount not being less than Rs.10,000/- or 50% of the tax involved, whichever is higher, and the maximum amount not being less than Rs.30,000/- or 150% of the tax, whichever is higher . The Bill proposed to substitute the words 25% of the tax involved and the maximum amount not being more than 100% of the tax involved for the words Rs.10,000/- or 50% of the tax involved, whichever is higher, and the maximum amount not being less than Rs.30,000/- or 150% of the tax, whichever is higher . Insertion of new section 158A Section 141 of the Bill proposed to insert a new Section 158A. Section 158A(1) provides that notwithstanding anything contained in sections 133, 152 and 158, the following details furnished by a registered person may, subject to the provisions of subsection (2), and on the recommendations of the Council, be shared by the common portal with such other systems as may be notified by the Government, in such manner and subject to such conditions as may be p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rescribed, namely: particulars furnished in the application for registration under section 25 or in the return filed under section 39 or under section 44; the particulars uploaded on the common portal for preparation of invoice, the details of outward supplies furnished under section 37 and the particulars uploaded on the common portal for generation of documents under section 68; such other details as may be prescribed. Section 158A(2) provides that for the purposes of sharing details under sub-section (1), the consent shall be obtained, of the supplier, in respect of details furnished under clauses (a), (b) and (c) of sub-section (1); and the recipient, in respect of details furnished under clause (b) of sub-section (1), and under clause (c) of sub-section (1) only where such details include identity information of the recipient, in such form and manner as may be prescribed. Section 158A(3) provides that notwithstanding anything contained in any law for the time being in force, no action shall lie against the Government or the common portal with respect to any liability arising consequent to information shared under this section and there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shall be no impact on the liability to pay tax on the relevant supply or as per the relevant return. Retrospective effect Section 142 of the Bill provides that in Schedule III to the Central Goods and Services Tax Act , paragraphs 7 and 8 and the Explanation 2 thereof (as inserted vide section 32 of Act 31 of 2018) shall be deemed to have been inserted therein with effect from the 1st day of July, 2017. No refund shall be made of all the tax which has been collected, but which would not have been so collected, had subsection (1) been in force at all material times. Amendment to IGST Act Section 143 of the Bill proposed to substitute the definition for the expression non-taxable online recipient under section 2(16) of the IGST Act. The new definition defines the said expression as any unregistered person receiving online information and database access or retrieval services located in taxable territory. The explanation to this section includes a person registered solely in terms of clause (vi) of section 24 of the CGST Act. Section 2(17) of the IGST Act defines the expression online information and database access or retrieval serv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ices as services whose delivery is mediated by information technology over the internet or an electronic network and the nature of which renders their supply essentially automated and involving minimal human intervention and impossible to ensure in the absence of information technology and includes electronic services. The Bill proposed to omit the expression essentially automated and involving minimal human intervention and . Section 12(8) provides that the place of supply of services by way of transportation of goods, including by mail or courier to, a registered person , shall be the location of such person; a person other than a registered person, shall be the location at which such goods are handed over for their transportation. The proviso to this section provides that where the transportation of goods is to a place outside India, the place of supply shall be the place of destination of such goods. The Bill proposed to omit the proviso to Section 12(8) . - - Scholarly articles for knowledge sharing authors experts professionals Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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