Key Legislative GST Law Amendments in Budget 2023-2024

Key Legislative GST Law Amendments in Budget 2023-2024

The country's Finance Minister Smt. Nirmala Sitharaman on 1st February, 2023 presented the Budget for the Financial Year 2023-2024. Significantly, following are the key legislative Goods and Service Tax Act, 2017 (in short GST Act) Amendments brought forth in the Budget for Financial Year 2023-2024:

1. Decriminalization of certain offences-

Section 132(1) and Section 138 of the Central Goods and Service Tax Act, 2017 (in short CGST Act) are being amended, inter alia, to raise the minimum threshold of tax amount for launching prosecution under GST from from Rs. 1 crore to Rs. 2 crore, except for the offences related to issuance of invoices without supply of goods or services or both. Further reduction in the compounding amount from the present range of fifty per cent to one fifty per cent of tax amount to the range of twenty-five per cent to hundred percent and additionally decriminalize certain offences (failure to provide information, obstructing Officer in discharging duties, tampering of evidence).

2. Specify Place of Supply-

Proviso to section 12(8) of the Integrated Goods and Services Tax Act (in short IGST Act) is omitted to specify the place of supply, irrespective of destination of the goods, in cases where the supplier of services and recipient of services are in India.

3. Access to Database and Online information-

Section 2(17) of the IGST is amended to revise the definition of "online information and database access or retrieval services" to eradicate the condition of rendering of the said supply being essentially automatic and involving minimal human interference.

4. Amendment to Schedule III of CGST Act, 2017-

In Schedule III of CGST Act, 2017, paras 7, 8 (a) and 8 (b) were inserted with effect from 1st February, 2019 to keep certain transactions/activities, such as supplies of goods from a place outside the territory where tax could be imposed to another place outside the taxable territory, high sea sales and supply of warehoused goods before their home clearance, outside the purview of GST.

5. Amendments in Section 2(16) of IGST Act, 2017-

It is amended to revise the definition of "non-taxable online recipient" by removing the condition of receipt of online information and database access or retrieval services for purposes other than commerce, industry or any other business or profession so as to provide for taxability of Online Information Data Base Access and Retrieval (in short OIDAR) service provided by any person located in non-taxable territory to an unregistered person receiving the said services and located in the taxable territory. Moreover, it sought to clarify that the persons registered solely in terms of Section 24(vi) of CGST Act shall be treated as unregistered person.

6. Input Tax Credit for expenditure with respect to Corporate Social Responsibility-

CGST Act, Section 17(5) is being amended to provide that input tax credit 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 referred to in Section 135 of the Companies Act, 2013.

7. Enable Sharing of Information-

A new provision- Section 158A in CGST Act is being inserted to enable sharing of the information furnished by the registered person in his return or application of registration or statement of outward supplies, or the details uploaded by him for generation of electronic invoice or E-way bill or any other details on the common portal, with other systems in a manner to be prescribed.

8. Simplify E-commerce for Micro Enterprises-

Amendments made in section 10 and section 122 of the CGST Act to allow unregistered suppliers and composition taxpayers to make intra-state supply of goods through E-Commerce Operators (in short ECOs), subject to certain conditions.

9. Filing of Return under GST-

Provisions of CGST Act, 2017 including Sections 37, 39, 44 and 52 are amended to restrict filing of returns/ statements to a maximum period of three years from the due date of filing of the relevant return or statement.