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3 Important Changes in GST brought through Interim Budget 2024

CA Shruti Singhalpro badge , Last updated: 03 February 2024  

The government had introduced a term "Amrit Kal" in Budget speech 2023 and called the next 25 years as “Amrit Kal” and had stated in its opening remark that this is the first budget of the Amrit Kal. Amrit Kal is a vision of the government to make India a developed nation (Viksit Bharat) by 2047 when it completes 100 years of its independence and all the policy and initiatives of the government have to be in line with the vision.

Again the government has defined its goal as becoming "Viksit Bharat" by 2047. To achieve this goal, in the present budget the government has set the following as the focus groups - 

  • G - Garib (Poor)
  • Y - Youth
  • A -  Annadata (Agriculturist)
  • N - Nari Shakti (Women)
3 Important Changes in GST brought through Interim Budget 2024

And the strategy is to focus on Sustainable development, Infrastructure and Investment, Inclusive Development and Agriculture and food processing.

As far as GST is concerned tax base of GST more than doubled since the introduction of GST and the average monthly gross GST collection has almost doubled to ₹ 1.66 lakh crore, this year. States too have benefited because of increased buoyancy of SGST revenue.

3 important changes in GST are 

1. Invoices issued on RCM basis and invoices of distinct persons are being included for distribution by ISD 

This change has been brought by substituting the definition of ISD in Sec 2(61) and Sec 20 of the CGST Act. This is a positive change as including RCM invoices ensures that all the ITC that has been generated at branch level can be distributed amongst other branches. Also ISD can now distribute ITC of group companies having same PAN (referred to as Distinct Persons under GST). This enables more centralised accumulation and distribution of ITC by a group of companies and enabling ease of doing business.


2. ISD mechanism has become mandatory

Circular 199/11/2023-GST dated 17th July 2023 clarified that upto now ISD mechanism is not mandatory. The views expressed by CBIC in this circular have now been negated by the government by substituting section 20 and making ISD mechanism mandatory for persons receiving tax invoices containing ITC of other branches at one centralised location to compulsorily take separate registration under clause (viii) of section 24 and shall not be allowed to issue invoices to other branches.

3. New penalty section has been introduced for manufacturers of Pan Masala, Gukta etc.

Sec 122A of CGST Act, 2017 has been introduced to levy penalty for failure to register certain machines used in manufacture of goods as per special procedure. Notification No. 30/2023 – Central Tax dated July 31, 2023 had been issued for detailing special procedure manufactures of Pan Masala, various types of tobacco and other items. It contains a schedule for specifying details of packing machines, special records to be maintained and special monthly statements to prepared and communicated to government within such time as is specified in the notification. Now, these persons required to follow the instructions specified in NN 30/2023 (supra) shall be liable to a penalty if he acts in contravention of said procedures. 


Important to note

1. This penalty will be in addition to penalty under Chapter XV (Chapter on Demand and Recovery containing section 73 to sec 84) or that is imposed under Chapter XIX (Chapter on Offences and Penalty containing section 122 to Sec 138).

2. A penalty equal to an amount of Rs. 100,000 for every machine not so registered will be imposed.

3. Along with penalty, the machines which are not registered shall be liable for seizure and confiscation. However, machines shall not be liable to confiscation if either penalty of Rs. 100,000 has been paid or machine registered within 3 days of receipt of communication of penalty order.

The aforesaid changes will be brought into effect through a notification that will be issued by Central Government. This budget was interim budget and not many significant changes were introduced through it.

Also Read: Top 3 changes in Income Tax brought about by Interim Budget 2024

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Published by

CA Shruti Singhal
(Practicing CA)
Category Union Budget   Report



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