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Summary of Amendments in CGST and IGST Act vide Finance Act, 2023

Fab Gyan Presents Summary of Amendments carried out in Finance Act, 2023 in CGST and IGST Act along with their impacts.


Part-A: Amendment in CGST Act,2017

S.No.

Amendment in

Amendment Pertaining to

Summary of Amendment

1

Section 10

Composition Levy

Earlier, Supplier making supplies of Goods or Services through E-Commerce Platforms who is liable to deduct TCS under section were not allowed to opt for Composition Levy.


Now, after Amendment Suppliers of Goods (Services still not) through E-Commerce can opt for Composition Levy.

2

Section 16

Related to Payment to Supplier within 180 days

Earlier, in Section it was written that in case Recipient fails to pay to Supplier Value of Supply along with Tax thereon, ITC availed on such supply will be added to his “Output Tax Liability”.


Now, this has been changed to ITC availed on such supply will be “paid by him” along with interest thereon under section 50.

(Amendment in Rule 37 were also notified on same lines)

3

Section 17(2)

Reversal of Proportionate Credit in respect of Exempt Supplies (Rule 42)

Earlier, For Calculation of Value of Exempt Supplies, Value of activities or transactions specified in Schedule III (Neither Supply of Goods nor of Services) except clause 5 was not considered.


Now, apart from clause 5, value of activities as prescribed in clause 8(a) i.e. “Supply of warehoused goods to any person before clearance for home consumption” as may be prescribed will also be considered as Exempt Supplies for Rule 42.


Impact: More ITC reversal will be required.

4

Section 17(5)(fa)

Blocked Credit

New subsection has been added to Section 17(5) to block credit pertaining to CSR expenses as being incurred under section 135 of the Companies Act, 2013.

5

Section 23 w.e.f. 01.07.2017

Registration

Notwithstanding anything contrary in Section 22 or 24, Government may specify the category of persons who may be exempted from obtaining registration under this Act subject to such conditions as may be restricted.

6

Section 30

Revocation of Cancellation of Registration

Earlier, Time line for application for revocation of cancellation of Registration was thirty days with extendable for 30 days by ADC/JC and further extendable for 30 days by Commissioner.

Now, Application for revocation of Cancellation of Registration can be made within time period as may be prescribed. Further, provisions related to ADC/JC and Commissioner has been deleted.

7

Section 37

Section39

Section44

Section 52

GSTR-1, 3B, Annual Return, Return by E-Commerce Operator

Maximum Time Limit for filing these Returns has been prescribed i.e. Three Years from due date.


However, Government can relax time line.

8

Section 54

Refund

Non Operational Concept of “Provisionally accepted ITC” from the section has been omitted.

9

Section 56

Interest on Delayed Refund

Earlier, interest at the rate of 6% was there from the expiry of 60 days from receipt of application to date of refund.


Now, Government will prescribe the calculation methodology for delayed Refunds.

10

Section 62

Assessment of Non-Filers of Returns

Earlier, Registered Persons can file valid return within 30 days of Assessment Order Passed by Proper Officer on Best Judgement basis.


Now, He can file return within 60 days. Further, with additional late fee of Rs. 100 per day, he can file return within 120 days.

11

Section 109, 110,114,117,118,119

GSTAT

Constitution of GSTAT.

12

Section 122(1B)

Penalty for E-Commerce Operators

Specific Penalty Provisions for contravention by E-Commerce Operators have been inserted like


(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) (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 Pay penalty of Rs. 10,000 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.”

13

Section 132

Punishment for certain offences

Sub-section (1) of section 132 of the CGST Act is being amended so as to decriminalize offences specified in clause (g), (j) and (k) of the said sub-section and to increase the monetary threshold for launching prosecution for the offences under the said Act from one hundred lakh rupees to two hundred lakh rupees, except for the offences related to issuance of invoices without supply of goods or services or both.

14

Section 138

Compounding of Offences

To exclude the persons involved in offences relating to issuance of invoices without supply of goods or services or both from the option of compounding of the offences under the said Act.


15

Section 158A

Consent based

sharing of information furnished by taxable person.

A new section 158A in the CGST Act is being inserted so as to provide for prescribing manner and conditions for sharing of the information furnished by the registered person in his return or in his application of registration or in his statement of outward supplies, or the details uploaded by him for generation of electronic invoice or Eway bill or any other details, as may be prescribed, on the common portal with such other systems, as may be notified after taking consent of Supplier/Recipient as the case may be.

16

Clause 7 & 8 of Schedule III

Neither Supply of Goods or Services

Pertaining to High Sea Sales, Supply of warehoused Goods before clearance for Home Consumption.


These amendments as inserted by The Central Goods and Services Tax (Amendment) Act, 2018 (No. 31 of 2018) – Brought into force w.e.f. 01st February, 2019 have been made effective from 01.07.2017


Further, it has been clarified that where Tax has been collected from 01.07.2017 to 31.01.2019, no refund will be given.

IGST ACT



S.No.

Amendment in

Amendment Pertaining to

Summary of Amendment

1

Section 2(16)

Definition of“ Non-Taxable Online Recipient”

Clause (16) of section 2 of the IGST Act is being amended so as to revise the definition of “non-taxable online recipient” by removing the condition of receipt of online information and database access or retrieval services (OIDAR) for purposes other than commerce, industry or any other business or profession, thereby extending the scope of taxability of OIDAR Services received by un-registered persons. Therefore, now OIDAR service is taxable provided by any person located in non-taxable territory to an unregistered person receiving the said services and located in the taxable territory. Further, it also seeks to clarify that the persons registered solely in terms of clause (vi) of Section 24 of CGST Act (for TDS) shall be treated as unregistered person for the purpose of the said clause.

2

Section 2(17)

Definition of OIDAR Services

To revise the definition of “online information and database access or retrieval services” to remove the condition of rendering of the said supply being essentially automated and involving minimal human intervention.

3

Section 12 & 13 of IGST Act

Place of Provision of Service

Earlier, In respect of Transportation of Goods Service (other than by mail or courier) from India to Outside India or Vice-Versa, Place of Provision of Service will be Destination of such Goods.


Now after amendment, it will be location of Recipient of such services. It appears that it has been done to bring consistency to taxability of service of Ocean Freight (in case of Exports).

Note: Adequate caution has been taken while making this document, however in case of any discrepancy observed please bring it to notice at Fabgyan2018@gmail.com. Further, Fab Gyan or any of its officers will not be responsible for any information contained in this document. Please consult your Tax Consultant before taking any decision.



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