GST Library

Login | Register

Best GST Library

Contact Us

Subscription Plans

GST News | Updates

GST Calendar

GST Diary

GST Case Laws

GST Notifications, Circulars, Releases etc.

Act & Rules

Act & Rules (Multi-view)

Act & Rules (E-book)

GST Rates

GST Rates (E-book)

HSN Classification

GST Council Meetings

GST Set-off Calculator

ITC Reversal Calculator

E-invoice Calculator

Inverted Duty Calculator

GSTR-3B Manual

GSTR-9 Manual

GSTR-9C Manual

GST Forms

Full Site Search

E-way Bill

Finance Bill 2024

GST Evasion in India

GST Videos


GST e-books

GST Domains Sale

About Us

Our Services

Contact Us

TaxReply India Pvt Ltd
®
Subscribe Free GST updates on...

Join on twitter

Join GST Group 119
Hindi
English

Finance Bill, 2023 passed with many more amendments. GST Changes by the Bill (Explained).

(Updated - 27 Mar 2023)

Finance Bill, 2023 has been passed with many amendments as compared to the original bill introduced in February.

Kindly read all the changes carefully. 

1. Section 10 - Removal of restriction on Composite Dealers for supply goods through e-commerce operator.  

Background : Section 10 deals with composition dealers and provides restriction on composite dealers to not to supply any goods or services through e-commerce operator.

Changes: Section 10 of CGST Act has now been amended to remove such restriction on composite dealers for supply of goods through e-commerce operator. However restriction for supply of services shall continue as earlier. 

To give effect the above change, the words "goods or" have been omitted from clause (d) of sub-section (2) and clause (c) of sub-section (2A).

Another important aspect is whether composite dealers will be allowed to sell goods outside state through e-commerce operator or not? The answer is negative. There is no change in these provisions and composite dealers will not be allowed to sell their goods outside state as earlier. So this is going to be a challenging task before e-commerce operators.

Penalty on e-commerce operators if they allow composite dealers selling their goods outside state?

A new penalty clause has been inserted in Budget 2023 vide sub-section (1B) in section 122 of CGST Act to penalize the e-commerce operators, if they allow composite dealers selling their goods outside state. These penalty provisions have been discussed in detail in the later part of this article. Kindly scroll down for more details on it.

Refer : Finance Bill for more details.

 

2. Section 16(2) - Language correction to align it with the existing return filing system as per Act.  

Background : Second Proviso of section 16(2) of CGST Act deals with the reversal of ITC by taxpayer upon failure to pay the amount to the supplier within 180 days of date of invoice. 

And Third Proviso deals with the re-availment of ITC reversed on subsequent payment by taxpayer to the supplier.

Changes : A slight correction has been made in the legal language of these two provisos to align it with the existing return filing system as per Act.

In Second Proviso, it was earlier mentioned that on failure to pay the amount within 180 days by taxpayer, previous ITC claimed shall be added to the output tax liability of taxpayer, however there was no automatic mechanism in place to add the same in output tax liability of taxpayer by GSTN. Taxpayers were paying this liability at their own only. So now it has been corrected and the words "shall be added to the output tax liability" have been replaced replaced with the words "shall be paid by taxpayer". As a effect, taxpayers will need to continue paying this liability at their own. There is no practical effect of this amendment. This is just a language correction in the law to align this section with the existing return filing system.

Third Proviso has been amended to include the words "to the supplier", to ensure that payment has been made by the taxpayer to the supplier only and not any third person. Previously there was a lacuna in the law, which has now been removed. There were instances and possibility, where payment was done by taxpayer to third person, but supplier did not actually receive the same. The said amendment aims to target that lacuna.

Refer : Finance Bill for more details.

 

3. Section 17 - Inclusion of sale of warehoused goods before custom clearance for home consumption under value of exempt supplies to restrict availment of proportionate ITC on the same.  

Background : Section 17(2) & 17(3) provides restriction on availment of proportionate ITC on exempt supplies when taxpayer is engaged in supplying taxable and exempt supplies both.

Changes : Changes have been made in Explanation of Section 17(3) to restrict the availment of Proportionate ITC on transaction covered in para 8(a) of Schedule III (i.e. Sale of warehoused goods before custom clearance for home consumption) by including it in the value of exempt supplies. So as a result taxpayer will need to reverse more ITC. 

ITC on CSR Activities:

Further, sub-section (5) of said section is also being amended so as to provide that ITC shall not be available in respect of 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 (CSR) referred to in section 135 of the Companies Act, 2013. This was quite a debatable issue and the government now aims to settle it with this amendment.

Refer : Finance Bill for more details.


4. Section 23 - Exemption from GST Registration in certain cases by over-ruling section 22 & section 24.  

Background : Section 23 of the CGST Act deals with the provision, where a person is not liable to obtain GST Registration. Whereas section 22 and section 24 deals with the registration & compulsory registration under GST.

Changes : Sub-section (2) of Section 23 has been replaced w.e.f. 01.07.2017. The substituted sub-section (2) starts with a non obstante clause to override the provisions of compulsory registration as required under section 22 & section 24.

A non-obstante clause is added to a provision in order to uphold its enforceability over another provision that is contradictory to it.

The same been done to provide that persons covered under compulsory registration in terms of section 22 & section 24 need not register if they are exempt by virtue of section 23.

E.g. if a person is dealing in exclusive supply of exempted goods and services then he will not be required to take registration as per section 23, even if he is required to take registration and pay tax under RCM as per section 24. In that case section 23 will prevail over section 24. 

Earlier, there was no non-obstante clause in section 23, so section 24 being a special section used to prevail.

Refer : Finance Bill for more details.

 

5. Section 30 - Removal of restriction of 30 days for filing revocation of cancellation of GST Registration.  

Background : Section 30(1) of the CGST Act provides restriction of 30 days for taxpayers to file revocation of cancellation of GST Registration.

Changes : Sub-section (1) of Section 30 has been amended to remove such restriction. Now revocation application may be filed within such time as may be prescribed by govt. Therefore govt. will surely notify a new time limit with more days to file revocation application in the interest of taxpayers.

Refer : Finance Bill for more details.

  6. Section 37, 39, 44 & 52 - Introduces the maximum time limit of 3 years for filing GSTR-1, GSTR-3B, GSTR-9 / 9A / 9C & GSTR-8 from the due date .......
  Login to read more...


:

Budget Changes

Best-in-class
Digital GST Library
Plan starts from
₹ 3,600/-
(For 1 Year)
Checkout all Plans
Unlimited access for
365 Days
✓ Subscribe Now
Author:

TaxReply


Mar 27, 2023

Comments


VERY GOOD.
By: Brahmani River Pellets Limited | Dt: Feb 2, 2023
Replied to BRAHMANI RIVER PELLETS LIMITED
very good
By: Bishprof Gyanserv | Dt: Feb 2, 2023
Replied to BRAHMANI RIVER PELLETS LIMITED
Best Explaination
By: Ravindra Sonar | Dt: Feb 3, 2023
Very good presentation . Please prepare likewise for income tax also.
By: Priyanka | Dt: Feb 2, 2023
Great... Very detailed analysis. Thank you
By: Narayan Shah | Dt: Feb 2, 2023
Very useful presentation.
By: Batmanabane | Dt: Feb 2, 2023
Thank you all amendments are provided in simple language
By: Vaideesvaaran Narayanaswamy | Dt: Feb 2, 2023
This is a great work sir. The amendment have been explained in good length. Keep up the good work.
By: Ca Shalini Verma | Dt: Feb 3, 2023
Great explanation.
By: Thyagarajan | Dt: Feb 4, 2023
Superb... Thank you for this detailed analysis of GST Budget.
By: Nityam Sharma | Dt: Feb 4, 2023
Superb. Explanation to the point and in simple language. Good work 👍
By: Ram Dutt Tibrewala | Dt: Feb 8, 2023
Excellent. This can be very much useful.
By: Nagabhushana Rao | Dt: Feb 8, 2023
At S. No. 03 of this article, high seas sale has been shown as included in definition of exempt supply for the purpose of reversal of ITC. High seas transaction has been mentioned at pera 8 (b) of schedule-III. While the Budget is talking about pera 8 (a) of schedule-III (Supply of warehoused goods). Kindly clarify.

Further, It will lead to higher reversal of ITC. What is the logic behind this.
By: Ca Aakash Gupta | Dt: Feb 9, 2023
Nicely explained the amendments..!
By: Rajesh Jain | Dt: Mar 28, 2023
Amendments explained simple to understand & to follow the updates which are necessary to gst professionals.
Sir, thanks a lot for the effort.
By: Basavaraj Hm | Dt: Mar 28, 2023


Post your comment here !

Login to Comment


GST News (Updates)


  Read more GST updates...

4
Mar
S
M
T
W
T
F
S
10 Mar

☑ Monthly | GSTR-7

GSTR-7 for the m/o Feb 2024 (For TDS Deductors u/s 51 - Section 39(3)).

☑ Monthly | GSTR-8

GSTR-8 for the m/o Feb 2024 [For TCS collection by E-Commerce Operators - Section 52(4)].

11 Mar

☑ Monthly | GSTR-1

GSTR-1 for the m/o Feb 2024 (Monthly Taxpayers) - N.No. 83/2020.

13 Mar

☑ Monthly | GSTR-5

GSTR-5 for the m/o Feb 2024 [Return by Non Resident Taxpayers - Rule 63 - Section 39(5)]

☑ Monthly | GSTR-6

GSTR-6 for the m/o Feb 2024 [For Input Service Distributors - Rule 65 & Section 39(4)].

☑ Monthly | IFF

IFF for the m/o Feb 2024 (QRMP Taxpayers, Optional) - Rule 59(2).

20 Mar

☑ Monthly | GSTR-3B

GSTR-3B for the m/o Feb 2024 (Monthly Taxpayer - Rule 61) - Either Compulsory taxpayer > 5 cr. or Voluntary taxpayer < 5 cr.

☑ Monthly | GSTR-5A

GSTR-5A for the m/o Feb 2024 [Return by OIDAR Service Providers - Rule 64.]

25 Mar

☑ Monthly | PMT-06

PMT-06 Monthly tax payment for Feb 2024 under QRMP Scheme [Rule 61(1)(ii) - Proviso to Section 39(7)].

Taxpayers have a choice to pay tax either, as per -  

A) Fixed Sum Method OR 
B) Self assessment basis subject to interest on short payment of taxes.
(Notification No.85/2020 - CT)
 
28 Mar

☑ Monthly | GSTR-11

GSTR-11 for the m/o Feb 2024 (Statement of inward supplies by persons having Unique Identification Number (UIN)).

31 Mar

☑ Annual | CMP-02

Last date to opt-in from regular scheme to composition scheme under GST for FY 2024-25 [Rule - 3 of CGST Rules.]

☑ Annual | GTA

Closing Date of window on GST Portal for Opt-in / Opt-out for Forward Charge / Reverse Charge by GTA for FY 2024-25 [Notification No.06/2023 - CT(R) dated 26.07.2023]