BUDGET UPDATE: 2023-2024 - GOODS AND SERVICES TAX

Finance Minister presented the Union Budget 2023 today. Key highlights of the Budget presentations are captured below

Section	Remarks
Second proviso to Section 16(2) of CGST Act, 2017	In the event Recipient fails to pay the value of supply and tax payable thereon to the supplier within 180 days from the date of issue of invoice, the ITC availed is required to be paid by him along with interest under Section 50. Prior to the amendment, the ITC availed would be added to his output liability.
Explanation to Section 17(3) of CGST Act, 2017	In terms of the amended provision, apart from value of entry 5 of Schedule III (i.e. value of sale of Land and sale of Building after completion certificate), value of the transaction covered under entry 8(a) of Schedule III (i.e. supply goods while deposited in customs bonded warehoused before clearance for home consumption) will also be considered for computing the value of exempt supply. Accordingly, the ITC availed on such supplies will be subject to reversal of ITC under Rule 42 or 43 of CGST Rules, 2017.
Section 17(5) of CGST Act, 2017	New clause (fa) inserted to bar ITC on goods and services used for statutory corporate social responsibility obligations.
Section 23 of CGST Act, 2017	Section 23 substituted to provide for overriding effect on provisions of Section 22(1) and 24. Accordingly, even if otherwise required to be registered under the provisions of Section 22(1) or Section 24, no registration is required to be taken in the event person is covered under the provisions of Section 23.
Section 37/39 of CGST Act, 2017	Bars registered person from furnishing GSTR 1 and GSTR 3B after the expiry of 3 years from the due date of filing of the said returns
Section 44 of CGST Act, 2017	Bars registered person from furnishing Annual Return in form GSTR 9 (along with reconciliation statement in form GSTR 9C) after the expiry of 3 years from the due date of filing of the said returns. In terms of Rule 80(3) persons having aggregate T.O in excess of five crores are mandatorily required to file reconciliation statement in Form GSTR 9C
Section 52 of CGST Act, 2017	Bars registered person from furnishing Statement of Tax collection in Form GSTR 8 after the expiry of 3 years from the due date of filing of such statement
Section 54(6) of CGST Act, 2017	Amendment to remove reference to ‘provisionally assessed ITC’ from sub–section 6 of Section 54. Accordingly, in terms of the amended provisions, refund on account of zero rated supply will be granted by considering self–assessed ITC.
Section 56 of CGST Act, 2017	The amended provisions permit the Government to prescribe the manner of granting interest for any delay in sanctioning refund and the conditions and restrictions subject to which such interest will be granted
Section 132 of CGST Act, 2017	Certain Penal provisions decriminalized namely i) obstructing or preventing any officer from discharging his duties under this Act ii) tampering with or destroying any material evidence or documents iii) fails to supply any information which he is required to supply under this Act or the rules made thereunder or supplies false information
Schedule III of CGST Act, 2017	Entry 7 and 8 inserted in schedule III vide Finance Act 2018, to have effect from 1.7.2017, however no refund will be granted for taxes paid if any on such transactions. Entry 7 and 8 of Schedule III are as under 7. Supply of goods from a place in the non–taxable territory to another place in the non–taxable territory without such goods entering into India. 8. (a) Supply of warehoused goods to any person before clearance for home consumption; (b) Supply of goods by the consignee to any other person, by endorsement of documents of title to the goods, after the goods have been dispatched from the port of origin located outside India but before clearance for home consumption
Section 12 of IGST Act, 2017	Proviso to sub section 8 of Section 12 was inserted vide Integrated Goods and Services Tax (Amendment) Act, 2018 and was notified w.e.f 01–02–2019. In terms of the said proviso the place of supply of transportation of goods where both the supplier and recipient are in India and where the destination of goods is outside India, will be treated as ‘Outside India’. There was a lot of confusion prevalent in the industry regarding availability of ITC on the tax so paid since both supplier and recipient are in India. The CBIC vide circular no. 184/16/2022 has clarified that ITC is available in such cases to the recipient. Accordingly, to address the confusion, the said proviso is being omitted.

Note: Please note that the above amendments in the Act will be effective from the date specified or from the date of enactment of the Finance bill as the case may be.

Disclaimer: The content of this GST update are solely for informational purpose. It does not constitute professional advice or recommendation of firm. Neither the author nor firm and its affiliates accepts any liabilities for any loss or damage of any kind arising out of any information in this GST updates nor for any actions taken in reliance thereon.