Changes in GST vide Union Budget 2023

CA. Heet Shah , Last updated: 02 February 2023  
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1. Change in Sec 10 of CGST Act (Composition Scheme for Supplier of Goods via E-commerce)

Composition Scheme available for supplier of Goods through E-commerce operators.

(Kindly Note Supplier of Goods are provided a relief and not Supplier of Service )

Therefore Food Delivery service Rent a cab service like OLA SWIGGY Zomaato still Liable for Registration Where as Harsh

Impex selling goods on amazon or Flipkart Not liable for GST Regsitration

Changes in GST vide Union Budget 2023

2. Changes in Section 16 of CGST Act

Prior to amendment , Non payment to Supplier within 180 Days would increase the Liability along with Interest. Same has been amended to Payable along with Interest as per Sec.50 of CGST Act

3. Changes in Section 17 (3) of CGST Act

Explanation to S.17 is been amended Which deals with exclusion of Value of Exempt Supply

Wherein the Supply of Warehouse Goods before Home Consumption as per entry 8(a) to Sch-III is also been excluded along with Sale of Land and Bldg .

Therefore It can be interpreted for the purpose of Reversal of ITC , Value of exempt Supply would 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 along with Worehoused goods supplied before home consumption.

4. Insertion in Section 17 (5)(fa) of CGST Act

(fa) 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;".

Therefore ITC on CSR Expense would be ineligible even though same is for Business Purpose.

5. Changes in Section 23 of CGST Act

Non-Obstante Clause has been inserted in Section 23 of CGST which States

"Notwithstanding anything to the contrary contained in sub-section (1) of section 22 or section 24"

Therefore the Supplier of Wholy Exempt goods /Agriculturist eventhough Liable for Registration u/s 22(1) or 24 of CGST Act shall be exempt for registration under GST

6. Insertion in Section 37 (5) of CGST Act

"(5) A registered person shall not be allowed to furnish the details of outward supplies under sub-section (1) for a tax period after the expiry of a period of three years from the due date of furnishing the said details:

Provided that 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 details of outward supplies for a tax period under sub-section (1), even after the expiry of the said period of three years from the due date of furnishing the said details.".

Therefore No GSTR-1 filing possible after expiry of 3years

7. Insertion in Section 39 (11) of CGST Act

"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:

Provided that 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 three years from the due date of furnishing the said return.".
Therefore No GSTR-3b filing possible after expiry of 3years

 

8. Insertion in Section 44(2) of CGST Act

"(2) A registered person shall not be allowed to furnish an annual return under sub-section (1) for a financial year after the expiry of a period of three years from the due date of furnishing the said annual return:

Provided that 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 under sub-section (1), even after the expiry of the said period of three years from the due date of furnishing the said annual return."

Therefore No GSTR-9 filing possible after expiry of 3 years

Insertion in Section 52(15) of CGST Act

"(15) The operator shall not be allowed to furnish a statement under sub-section (4) after the expiry of a period of three years from the due date of furnishing the said statement:

Provided that 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 under sub-section (4), even after the expiry of the said period of three years from the due date of furnishing the said statement.".

Therefore No GSTR-8 filing possible after expiry of 3 years

9. Omission in Section 54 (6) of CGST

Section 54 (6) shall now be read as under-

"Notwithstanding anything contained in sub-section (5), 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, ninety per cent. of the total amount so claimed, 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."

Since ITC is to be Claimed as per GSTR-2B and not on provisional basis "excluding the amount of input tax credit provisionally accepted," has been omitted from the said provision

 

10. Substitution in section 56 of the CGST Act

Prior to Substitution
"from the date immediately after the expiry of sixty days from the date of receipt of application under the said subsection till the date of refund of such tax",

After Substitution
"for the period of delay beyond sixty 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"

Therefore Delay over 60 day for Refund from the date of Application would be computed in the manner prescribed

11. Insertion in Section 122(1B) of CGST Act

"(1B) Any electronic commerce operator who- -

(i) allows a supply of goods or services or both through it by an unregistered person other than a person exempted from registration by a notification issued under this Act to make such supply;

(ii) 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

(iii) fails to furnish the correct details in the statement to be furnished under sub-section (4) of section 52 of any outward supply of goods effected through it by a person exempted from obtaining registration under this 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."

Therefore penalty equivalent to tax evaded or 10,000 whichever is higher be levied on E-commerce operator.

12. Amendment in Section 132 & 138 of CGST Act

1) Section 132 and section 138 of CGST Act are being amended, inter alia, to -

  • Raise the minimum threshold of tax amount for launching prosecution under GST from ` one crore to ` two crore, except for the offence of issuance of invoices without supply of goods or services or both;
  • Reduce the compounding amount from the present range of 50 per cent to 150 per cent of tax amount to the range of 25 per cent to 100 per cent;
  • Decriminalize certain offences specified under clause (g), (j) and (k) of sub-section (1) of section 132 of CGST Act, 2017, viz.- 1)obstruction or preventing any officer in discharge of his duties;

2) deliberate tempering of material evidence;
3) failure to supply the information.

13. Insertion In Sch- III to CGST Act, with retrospective effect

Para 7 and 8 and 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.

14. Further No Refund would be allowed on Tax collected on ignorance of the above para

15. Insertion of 158A in CGST Act

A new section 158A in CGST Act is being inserted to enable sharing of the information furnished by the registered person in his return or application of registration or statement of outward supplies, or the details uploaded by him for generation of electronic invoice or E-way bill or any other details on the common portal, with other systems in a manner to be prescribed

16. Deletion of provisio to section 12(8) of IGST Act

Proviso to sub-section (8) of section 12 of the IGST Act is being omitted so as to specify the place of supply, irrespective of destination of the goods, in cases where the supplier of services and recipient of services are located in India.

17. Substitution to section 2(16) of the IGST Act

‘(16) "non-taxable online recipient" means any unregistered person receiving online information and 93 database access or retrieval services located in taxable territory.

Explanation.- - For the purposes of this clause, the expression "unregistered person" includes a person registered solely in terms of clause (vi) of section 24 of the Central Goods and Services Tax Act, 2017’;

Therefore it removes the condition of receipt of online information and database access or retrieval services 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 non-taxable territory to an unregistered person receiving the said services and located in the taxable territory.

Also, it seeks to clarify that the persons registered solely in terms of clause (vi) of Section 24 of CGST Act shall be treated as unregistered person for the purpose of the said clause.

18. Further clause (17) has been amended to remove the condition of rendering of the said supply being essentially automated and involving minimal human intervention


Published by

CA. Heet Shah
(Tax Consultant & Practitioner)
Category Union Budget   Report

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