Bimal Jain
Quick Summary
GST The Finance Bill, 2025 has proposed changes in the CGST Act,2017 through Clauses 116 to 129 of the Finance Bill, 2025 in the CGST Act, 2017. Unless specified otherwise, amendments proposed in the Finance Bill, 2025, vide Clauses 116 to 129 will come into effect from a date when the same wil
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FAQ :
The Finance Bill, 2025 proposes changes through Clauses 116 to 129 of the CGST Act, 2017. These include amendments to definitions, time of supply rules for vouchers, input tax credit restrictions, credit and debit note procedures, and the introduction of a track and trace mechanism.
The definition of 'Input Service Distributor' has been amended to explicitly include the distribution of input tax credit for inter-state supplies on which tax is paid on a reverse charge basis. This change, effective from April 1, 2025, allows ISDs to pay GST under reverse charge for common input services and distribute the credit among distinct persons under the same PAN.
A new clause is being inserted to define 'unique identification marking' for the implementation of a Track and Trace Mechanism. This mechanism, empowered by Section 148A of the CGST Act, will apply to specified commodities prone to tax evasion, requiring software-readable technologies like barcodes or RFID tags to track goods.
The provisions related to the time of supply for vouchers in both goods and services have been omitted. Transactions involving vouchers are no longer subject to GST as they are considered either money or an actionable claim. GST will only apply to the actual goods or services purchased using the voucher.
Section 17(5)(d) of the CGST Act is being amended retrospectively from July 1, 2017, to substitute 'plant or machinery' with 'plant and machinery'. This amendment nullifies the impact of a Supreme Court decision that allowed GST credit on 'plant' and clarifies that input tax credit is not available for the construction of immovable property, excluding plant and machinery.
The proviso to Section 34(2) has been amended to state that a supplier's reduction in output tax liability through a credit note is permitted only if the recipient reverses the input tax credit attributable to that credit note. This ensures that the supplier cannot reduce their tax liability if the recipient has already availed the corresponding ITC.
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