Key GST Changes That Will Take Effect from October 1, 2023
The following changes are notified to take effect with effect from 01st October 2023 with reference to GST Laws were proposed as part of Finance Bill impacting businesses across the nation.
CHANGES IN CGST ACT, 2017
• Composition levy extended to suppliers of goods under e-commerce model (Section 10)
• Where a recipient fails to pay to the supplier the amount towards the value of supply along with tax, within a period of 180 days from the date of issue of invoice, the provision prior to the amendment required the Input Tax Credit (ITC) to be added to the output tax liability. However, following the amendment, it involves either payment or reversal of ITC along with interest payable under Section 50 of the CGST Act 2017. (Section 16)
• Sale of warehoused goods before filing BOE includible in value of exempt supply for reversal of common ITC (17(2) and (3) r.w. Rule 42/43)
• ITC blocked on CSR activities (Section 17(5) (fa))
• Any registered person whose registration has been cancelled by the proper officer on his own motion (suo-moto cancellation) may apply for revocation of Cancelled registration within 90 days from the date of order of cancellation or such further period as may be allowed by Commissioner not exceeding 180 days. (Section 30)
• The registered person shall not be allowed to furnish the return in GSTR-1, GSTR-3B, GSTR-9, GSTR-9C and GSTR-8 after a period of 3 years from the due date of furnishing the relevant return as prescribed under the respective sections.
• The time frame for submitting Form GSTR 3B or Form GSTR 10 (Final Return) has been extended from 30 days to 60 days in cases of Best Judgment Assessment, which allows for the deemed withdrawal of the best judgment order. If the submission extends beyond 60 days, an additional 60-day period (from day 61 to day 120) is available, provided an extra late fee is paid in addition to the standard late fee.
• Penalty prescribed for certain offences on the E-Commerce Operators under Section 122(1b) of CGST Act 2017.
• The revised monetary threshold for initiating prosecution has been raised from Rs. 1 Crore to Rs. 2 Crore, except in cases related to counterfeit or bogus invoices. Therefore, for offenses unrelated to fake invoices, imprisonment may be pursued if the value exceeds Rs. 2 Crores, while prosecutions for fake invoices will continue to apply as per the previous threshold of Rs. 1 Crore. (Section 132)
• Fake/bogus invoice cases excluded from the option of compounding of offences. Reduction of amount for compounding of various offences except offence of fake invoice, by reducing the minimum and maximum amount for compounding. (Section 138)
• Sharing of information or details furnished by a taxable person on the GST common portal with such other systems as may be notified by government. (Section 158A)
• The taxpayers, having Aggregate Annual Turnover (AATO) above Rs 5 Crore, shall use at least 6 digit HSN code in the e-invoices and e-Waybills and other taxpayers shall use at least 4 digit HSN code in E-invoices and E-Way Bills.
CHANGES IN IGST ACT, 2017
• Retrospective applicability of Para 7, 8(a) and 8(c) of Schedule III.
• Definition of OIDAR amended to widened the scope of services.
• Changes in place of supply provisions Section 12(8) and 13(9) of IGST.
• Changes in zero rated supply provision(Section 16).
• Central Government Exempts 5% GST on Ocean Freight Imports.
In conclusion, while these new GST changes have certainly brought about some challenges, they have also contributed to streamlining certain aspects of compliance. The overall goal is to enhance the ease of doing business in India, even though adapting to these changes can be a complex process for businesses. Staying updated and informed about these modifications is crucial for businesses to remain compliant and competitive in this ever-evolving tax landscape.
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