GST changes from Union Budget 2023
A detailed summary of GST changes from Union Budget 2023
In this post, We will talk about the CGST/IGST changes from the union budget 2023.
CGST ACT RELATED CHANGES
- Composition taxpayers of goods can now make intra-state supply of goods through ECommerce Operators (ECOs).
- Precaution – the dealer who is opting for composition scheme shall keep in mind that he shall not undertaken interstate transactions.
- Penal Provisions for non compliance are there for both eCommerce Operator and Composition Tax Payer.
- Input Tax Credit
- ITC Reversal for non payment of consideration within 180 days to supplier, recipient shall pay the ITC back along with interest. Earlier it was to be treated as output tax liability, this reversal is no longer called payment of “Output taxes”.
- Scope of Exempt Supply for reversal of Input tax credit is widened to include “Supply of warehoused goods to any person before clearance for home consumption”
- Impact – There will be an increased common credits reversal based on increase in the value of exempt supply by including Supply of warehouse goods mentioned above.
- Expanding the scope of blocked credit – ITC cannot be availed on CSR Expenditure i.e. 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
- Exemption from Registration
- Persons exempted from registrations under sec 23 are given an overriding preference even if the turnover is more than registration limit (Sec 22(1)) or falling under categories of compulsory registration specified u/s 24. This is to give clarity from any interpretational controversies (Retrospective amendment from 01-07-2017)
- Say a company exclusively dealing in exempted supply need not register even if they are mandatorily to be registered under sec 24 owing to RCM or interstate supply etc.
- Restrictions on Timeline with in which return needs to be filed:
- Return cannot be filed after 3 years of the due date specified for such return
- Returns Covered
- GSTR 1 Outward supply &
- Regular returns like GSTR 3B , CMP 08 , TCS.
- Annual Returns and reconciliation statement in forms GSTR-9 and GSTR-9C
- Returns Not Covered
- TDS or ISD
- The said time limit for a registered person or a class of registered persons, subject to certain conditions and restrictions can be decided time to time by the council.
- Refund Related
- Earlier there was no refund allowed in respect of provisional Input tax credit. Subsequent to amendment under sec 41, where the concept of provisional credit was removed. Hence, consequential amendment in section 54 to remove refund of provisional input tax credit.
- Payment of interest in cases of delayed refund would be by a prescribed manner in rules for various scenarios. Earlier it was immediately after expiry of 60 days for all cases.
- Penal Provisions to e-commerce Operators
- Penal provisions extended to electronic commerce operators in case of contravention of provisions relating to supplies of goods or services made through them by unregistered persons or composition taxpayers
- Non furnishing of unregistered dealer information in TCS return.
- Penalty equal to higher of Rs 10.000/- or amount of tax involved as if dealer is registered person
- Reduction for Punishment for certain offences
- The following are no longer punishable offences under sec 132
- obstructs or prevents any officer in the discharge of his duties under this Act;
- tampers with or destroys any material evidence or documents;
- fails to supply any information which he is required to supply under this Act or the rules made thereunder 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;
- Change in the monetary threshold for launching prosecution
- Rs. 1 crore for the offences related to issuance of invoices without supply of goods or services or both i.e. clause 132(1)(b).
- No monetary limit for falsification of financial records i.e. 132(1)(f)
- for all the other offences listed in sec 132(1) threshold of punishment is Rs. 2 crore and above.
- Sec 138 – Compounding of offence
-
- Compounding of offence is not applicable to issuance of invoices without supply of goods or services or both 132(1)(b)
- Other offences under sec 132 can be compounded once
- Quantum of compounding
-
-
- Earlier Compounding amount was
- Minimum : 10,000 or 50% the tax involved, whichever is higher, and the
- Maximum amount : 30,000/-or 150%. of the tax, whichever is higher
- Earlier Compounding amount was
-
-
-
- Current
- Minimum 25%. of the tax involved and the
- Maximum amount not being more than 100% of the tax involved
- Current
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- Exchange of information
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- Sharing of the information furnished by the registered person
- With the consent of Supplier
- in his application for registration(REG 01) or
- in his return filed(3B) or in his statement of outward supplies(GSTR 1), or
- GST Annual Returns – GSTR 9
- the details uploaded by him for generation of electronic invoice(INV 01) or
- E-way bill(EWB 01) or
- any other details, as may be provided by rules, on the common portal.
- With the consent of Supplier
- Sharing of the information furnished by the registered person
-
-
- Additional consent of Recipient for sharing the following information
- GSTR 2A
- the details uploaded by him for generation of electronic invoice(INV 01) or
- B2B E-way bill (EWB 01)
- with such other systems, as may be notified
- Additional consent of Recipient for sharing the following information
-
-
- Disclaimer:
- No action shall lie against the Government / common portal with respect to any liability arising consequent to information share
- there shall be no impact on the liability to pay tax on the relevant supply or as per the relevant return.
- Disclaimer:
- SCH III
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- Clause 7 and 8 inserted in Finance Act 2018 has been made retrospectively applicable from 1st July 2017
- Saving clause provided for non refund of taxes in case if a taxpayer assumed the above as supply and paid the tax there on.
ICGST ACT RELATED CHANGES
- Non-taxable online recipient
-
- Definition of Non taxable Online recipient confined only to unregistered person.
- URP would also include person registered under coz of 9(5)
- Impact Foreign OIDAR supplier would be to remit under forward charge for all supplies other than those made to registered persons.
- OIDAR
-
- (17) “online information and database access or retrieval services” means 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 such as,…..
- Scope of OIDAR service expanded by removing the words “essentially automated and involving minimal human intervention”,
- This change may impact teaching and coaching through information technology be covered under OIDAR
- Transportation of Goods to place outside India
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- Omission to the proviso of sec 12(8)“Provided 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.” this was introduced by Finance Act 2018
- Implication
- POS shall be, if made to a registered person, shall be the location of such person; else Shall be the location at which such goods are handed over for their transportation.
- Registered buyer can be able to avail ITC
- This omission may be interpreted to mean as if this proviso never existed for the intermittent period.
Customs Related changes
Basic Customs Act
- Sec 25 : Power to grant exemption from duty
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- Insertion of a new proviso to section 25 (4A)of the Customs Act so as to exclude certain categories towards (International commitments, FTP and Govt Schemes with validity > 2 years) of conditional exemption specified
- Disposal of Application before settlement of cases
-
- New section inserted 127C(6)
- time limit of 9 months from the date of application, for disposal of the application filed before the Settlement Commission.
Customs Tariff Act
- Precious Metals
| BCD | AIDC* | SWS# | Total Duty | ||||
| Particulars | From | To | From | To | From | To | |
| Gold Bars | 12.5% | 10% | 2.5% | 5% | Nil | Nil | 15% |
| Gold Dors | 11.85% | 10% | 2.5% | 4.35% | Nil | Nil | 14.35% |
| Platinum | 12.5% | 10% | 1.5% | 5.4% | 1.4% | Nil | 15.4% |
| Silver Bar | 7.5% | 10% | 2.5% | 5% | 0.75% | Nil | 15% |
| Silver Dors | 6.1% | 10% | 2.5% | 4.35% | 0.61% | Nil | 14.35% |
- *Agriculture Infrastructure and Development Cess (AIDC)
- #Social Welfare Surcharge (SWS)
- Other items Tariff also changed for details refer the Finance Bill 2023:
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- Chemicals and petrochemicals
- Fish meal, Seeds,
- Electronics goods
- Electrical appliances
- Automobiles
- Capital Goods
- Extensions of Exemptions
- Out of 196 exemptions, 146 exemptions are being extended for a period of one year i.e. up to 31.3.2024 for the purpose of undertaking review. Of the remaining, a few are being extended for five years, two years and one year while some exemption entries are being discontinued with effect from 31.3.2023.
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