Home GST Summary of Latest GST Changes Effective from 1st Oct 2023

Summary of Latest GST Changes Effective from 1st Oct 2023

Summary of Latest GST Changes Effective from 1st Oct 2023
New GST Changes Effective from 1st Oct 2023

On this publish, we now have mentioned the current GST adjustments efficient from the first of October 2023. Sections 137 to 162 of the Finance Act, 2023 (the FA,2023) (besides Sections 149 to 154) wef October 01, 2023 vide Notification no. 28/2023-Central Tax dated July 31, 2023.

From August 01, 2023 Sections 149 to 154 of the FA, 2023 got here into drive and that doesn’t depend beneath this weblog.

Newest Modifications in CGST ACT

Listed below are a number of the newest adjustments within the Central Items and Providers Tax Act (CGST ACT) efficient from 1st Oct, 2023:

Clarificatory Revision to GST Part 138 Relating to Fee to the Provider

So as to align the authorized language with the return submitting system established within the CGST Act, the up to date provision now states that if a recipient fails to settle the bill quantity, which incorporates taxes, to the provider inside 180 days from the bill date, the recipient should pay an quantity equal to the Enter Tax Credit score (ITC) they’ve claimed. This cost is along with the curiosity outlined in Part 50 of the CGST Act. The modification brings a change to the earlier provision, the place ITC was thought-about an addition to the output tax legal responsibility. As a substitute, it now imposes a brand new requirement for both cost or ITC reversal.

Because of this, the willpower of curiosity legal responsibility on aforesaid reversal will comply with the rules of Part 50(3) reasonably than 50(1) of the CGST Act, however solely when the incorrectly claimed credit score is utilized by the registered individual.

GST Part 139: Provide of Warehoused Items to Particular person

For aims of fixing the frequent ITC U/S of 17(2) and (3) of the CGST Act, warehoused items bought earlier than submitting BOE are contained within the worth of GST-exempt provides beneath

This modification pertains to paragraph 8(a) of Schedule III within the CGST Act, which includes the provision of warehoused items to any particular person earlier than their clearance for residence consumption. This modification categorizes it as an exempted provide for the aim of reversing the frequent Enter Tax Credit score (ITC) beneath Part 17(2) and (3) together with Guidelines 42 and 43 of the CGST Guidelines.

Part 17(5)(fa) of the CGST Act offers with the blocking of ITC for CSR actions

Ranging from now, there might be limitations on the eligibility for ITC on items or providers obtained by a taxable individual when these items or providers are utilized or meant for use for actions related to fulfilling Company Social Accountability (CSR) obligations. Please word that this restriction applies prospectively.

GST Part 137: Provide of Items by way of ECO

Beforehand, registered people concerned in supplying items by means of an E-commerce operator (ECO) didn’t have entry to the Composition Scheme’s advantages. Now, these advantages might be prolonged to them. Nonetheless, sure restrictions will nonetheless apply to registered people engaged in offering providers by means of an E-commerce operator.

The Central Board of Oblique Taxes and Customs (CBIC) has issued Notification Nos. 36/2023 and 37/2023 – Central Tax on August 04, 2023. These notifications define a particular process that E-commerce operators should comply with when coping with the provision of products by people who’re tax-paying Composition Sellers beneath Part 10 of the Act.

Under are the talked about processes:

  • The E-commerce operator (ECO) is forbidden from facilitating any inter-state provide of products by means of its platform for the talked about particular person.
  • The ECO will solely allow the provision of products by means of its platform for the talked about particular person if they’ve been allotted an enrollment quantity on the frequent portal.
  • The ECO is obligated to gather tax at supply, as per subsection (1) of Part 52 of the CGST Act, for the products provided by the talked about particular person by means of its platform.
  • The ECO should electronically submit the small print of the products provided by the talked about particular person by means of its platform within the assertion utilizing GST FORM GSTR-8.

GST Part 146: Refunds and Curiosity on Late Refunds

This modification goals to harmonize the remedy of enter tax credit score (ITC) by eliminating the point out of provisionally accepted ITC. It brings it in step with the self-assessed ITC process outlined in Part 41(1) of the CGST Act.

Below Part 54(6), a provisional refund of ninety per cent of the full claimed quantity is permitted, excluding the quantity of provisionally accepted enter tax credit score, within the case of zero-rated provide.

Part 147 of the FA, 2023 – Part 56 of the CGST Act:

The federal government can have the authority to determine the procedures, calculations, strategies, and limitations for the cost of curiosity on refunds which are delayed past 60 days from the date of receiving the refund utility till the precise refund date.

[Notification No. 38/2023- Central Tax dated August 04, 2023]

GST Part 140: Retrospective Overriding Impact

This modification can have a retroactive impact ranging from July 01, 2017. It grants an exemption to people from the requirement of registering for GST as per Part 22(1) of the CGST Act and from necessary registration beneath Part 24 of the CGST Act. For example, people who have been already exempt from obligatory registration, equivalent to those that solely make provides beneath the Reverse Cost Mechanism (RCM), these offering providers by means of an E-Commerce Operator with an combination turnover not exceeding INR 20 lakhs in a fiscal yr, these concerned within the provide of handicraft items with an combination turnover not exceeding INR 20 lakhs in a fiscal yr, or these engaged in inter-state provides of taxable providers with an combination turnover not exceeding INR 20 lakhs in a fiscal yr, usually are not required to acquire GST registration.

GST Part 141: Revocation or Cancellation of GST Registration

Part 30(1) of the CGST Act will prolong the time restrict of 30 days for transferring an utility for revocation or cancellation of GST registration. The time period has now surged to 90 days from the order date of cancellation or such additional interval as could also be licensed by the commissioner however no more than 180 days as specified beneath Rule 23 of the CGST Guidelines.

[Notification No. 38/2023- Central Tax dated August 04, 2023]

GST Part 155: Tax Legal responsibility for Particular Offences

A brand new penalty provision is being launched that applies to E-commerce operators (ECO). They might face a penalty of INR 20,000 (comprising each CGST and SGST) or the tax quantity engaged within the provide, whichever is bigger. This penalty is relevant in circumstances of violations of specified provisions associated to provides of products made by means of ECO by way of unregistered individuals or composition taxpayers.

[Notification No. 37/2023- Central Tax dated August 04, 2023]

GST Sections 142-145: Limitation of three years on GST Returns

After the expiry of three years from the due date of submitting the pertinent returns, the Registered individual shall not be permitted to file the belated returns in Kind GSTR-1, GSTR-3B, GSTR-8, GSTR-9, and GSTR-9C.

GST Part 148: Unregistered Individual Assessments

The time restrict for submitting both Kind GSTR 3B or Kind GSTR 10 (Ultimate Return) within the case of Greatest Judgment Evaluation, when the Greatest Judgment order is taken into account withdrawn, might be prolonged from 30 days to 60 days. Moreover, this 60-day interval could also be extended to 120 days upon cost of a further late payment, along with the usual late payment.

GST Part 156: Decriminalization of Particular Tax Offences

The decriminalization pertains to offences outlined in clauses (g), (j), and (ok) of Part 132(1) of the CGST Act. These offences contain actions equivalent to obstructing or impeding an officer within the execution of their duties, altering or destroying materials proof or paperwork, failing to supply data, or offering improper particulars.

Financial restrict for the prosecution: Furthermore, this modification raises the prosecution threshold from INR 1 Crore to INR 2 Crores for many offences, with the exception being the offence of issuing invoices with out supplying items or providers.

Consequently, for all offences, besides these involving faux invoices, prosecution proceedings will start if the tax worth exceeds Rs. 2 Crores. Within the case of pretend invoices, prosecution will nonetheless be triggered on the earlier threshold of Rs. 1 Crore for tax quantities.

GST Part 157: Pretend Bill

No compounding violations: Bogus bill circumstances usually are not included within the choice of compounding offences.

Lower in compounding costs: The discount of compounding quantities for varied offences, aside from faux GST invoice-related offences, includes decreasing each the minimal and most compounding thresholds as indicated beneath:

[Notification No. 38/2023- Central Tax dated August 04, 2023]

GST Part 158: Provision Permits the Sharing of Knowledge

This new provision allows the sharing of data or particulars offered by taxpayers (equivalent to particulars of their registration utility, returns, e-invoice, e-Waybill, or some other prescribed paperwork) on the GST Widespread portal with different methods, topic to the taxpayer’s consent.

[Notification No. 38/2023- Central Tax dated August 04, 2023]

CGST Rule 64: Inclusion of ‘Non-taxable On-line Recipient’

Rule 64 has been notably up to date to include the time period “non-taxable on-line recipient,” as outlined within the Built-in Items and Providers Tax Act, 2017 (“the IGST Act”). This modification broadens the applicability of Rule 64, encompassing a wider vary of recipient classes and, consequently, fostering enhanced tax compliance.

[Notification No. 38/2023- Central Tax dated August 04, 2023]

GST Part 159: Retrospective Applicability Para 7, 8(a) and eight(c) of Schedule III

To resolve ongoing or potential litigations the place no tax has been paid by a taxpayer on sure provides, the next entries in Schedule III (non-taxable provides) are thought-about to have been inserted with retroactive impact from July 01, 2017:

  • Provide of products from a location exterior the taxable territory to a different place exterior the taxable territory, with out these items getting into India (excessive seas gross sales).
  • Earlier than clearance for residence consumption provide of warehoused items to any particular person.
  • No tax refund might be obtainable for transactions or actions falling inside this class, offered that tax has already been paid for such transactions or actions through the interval from July 01, 2017, to January 31, 2019.

[Notification No. 38/2023- Central Tax dated August 04, 2023]

Newest Modifications in IGST Act

From October 01, 2023, the below-mentioned revisions to the IGST act will come into force-

GST Part 161: Place of Provide for Items Transportation

This modification has eliminated the supply in Part 12(8) of the IGST Act, which addresses the willpower of the place of provide for the transportation items, whatever the items’ vacation spot, in circumstances the place each the service provider and recipient are located in India. Below this modification, the POS would be the location of the service recipient, offered that the recipient is a registered particular person.

[Notification 13/2023 – Integrated Tax (Rate) dated September 26, 2023]

Part 162 of the FA, 2023 – Part 13(9) of the IGST Act:

In accordance with Part 13(9) of the IGST Act, 2017, which governs the willpower of the place of provide for providers associated to the transportation of products (excluding mail or courier providers), the default provision outlined in Part 13(2) of the IGST Act applies. Which means that the place of provide might be deemed to be the situation of the service recipient when both the service supplier or the service recipient is located exterior India. Consequently, providers offered to recipients situated exterior India might be labeled as exports, and providers obtained from suppliers exterior India might be thought-about imports of providers, whatever the vacation spot of the products being transported.

[Notification 11/2023 – Integrated Tax (Rate) dated September 26, 2023]

GST Part 160: Scope OIDAR Providers

The time period “non-taxable on-line recipient” has been redefined to increase the attain of On-line Info and Database Entry or Retrieval Providers (OIDAR). Ranging from October 01, 2023, any unregistered particular person throughout the taxable jurisdiction of India who receives OIDAR providers, whatever the goal, might be labeled as a non-taxable on-line recipient.

Beforehand, OIDAR providers offered by entities in non-taxable international jurisdictions have been exempt from taxation when obtained by the central authorities, state authorities, authorities authorities, or people for non-business functions. Nonetheless, this tax exemption has been discontinued as of October 01, 2023.

GST Part 123: Zero-rated Provides to SEZ

The CBIC, by means of Notification No. 27/2023-Central Tax dated July 31, 2023, carried out a major modification. This modification eliminates the uncertainty surrounding the eligibility of provides for zero-rated standing, making certain that solely provides meant for licensed operations inside a Particular Financial Zone (SEZ) unit or by a developer might be thought-about zero-rated. Beforehand, Rule 89 necessitated acquiring an endorsement from the designated SEZ officer to assert a refund of collected Enter Tax Credit score (ITC) or Built-in Items and Providers Tax (IGST) by a provider working within the Home Tariff Space (DTA). This requirement has now been integrated into the statutory framework, stopping any problem to the Guidelines on the grounds of superseding the Statute.

IGST Part 16(3) & (4): Zero-rated provides

The brand new default choice is to provide items and providers beneath a Letter of Enterprise (LUT) with out making a tax cost upfront, after which in search of a refund of collected Enter Tax Credit score (ITC). The federal government has the authority to specify which classes are allowed to make IGST funds and comply with the refund course of.

By Notification No. 1/2023-Built-in Tax dated July 31, 2023, the CBIC has enabled tax funds for all exports of products and providers, aside from particular items equivalent to cigarettes, pan masala, and different tobacco-related objects. As of now, there was no notification issued to allow provides to Particular Financial Zone (SEZ) models or builders with IGST cost, so the default choice of utilizing a LUT with out paying IGST stays the one obtainable route.

Sept 26 2023, Three IGST Notifications 11/2023, 12/2023, and 13/2023

Three Notifications, particularly 11/2023, 12/2023, and 13/2023, beneath the Built-in Tax (Fee), all dated September 26, 2023, have launched revisions to the Fee, Exemption, and Reverse Cost Mechanism (RCM) notifications of the Built-in Items and Providers Tax (IGST). These adjustments intention to abolish the legal responsibility imposed on importers for providers offered by entities situated in non-taxable territories, particularly international transport traces, to people located in non-taxable territories (international suppliers). This pertains to the transportation of products by vessel from a location exterior India to the customs clearance station in India, relevant within the context of CIF imports, the place reverse cost mechanisms have been beforehand in place.

These amendments have been carried out greater than a yr following the Hon’ble Supreme Courtroom’s ruling within the case of Union of India v. M/s Mohit Minerals Pvt. Ltd. On this landmark judgment, the Supreme Courtroom dominated that imposing a reverse cost levy on importers as import of providers contravened Part 8 of the Central Items and Providers Tax (CGST) Act, 2017. The Courtroom’s choice favoured Indian importers.


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