Union Finance Minister Nirmala Sitharaman has unveiled the Annual Budget for the fiscal year 2024-25, detailing the financial roadmap, allocations and Goods and Services Tax Act Amendment proposals.
This marks the first full budget from the Modi 3.0 government and the seventh consecutive budget presented by the finance minister. In her Budget speech for the fiscal year 2024-25, Finance Minister Nirmala Sitharaman highlighted the significant benefits brought about by the Goods and Services Tax (GST).
Unless otherwise specified, amendments proposed in the Finance (No.2) Bill 2024 will come into effect from the date when the same will be notified concurrently, as far as possible, with the corresponding amendments to the similar Acts passed by the States & Union territories with legislature as follows: —-
Amendments in CGST Act, 2017:
1. Section 9: Amended to bring Extra Neutral Alcohol used in the manufacture of alcoholic liquor for human consumption out of the purview of central tax. Similar amendments are proposed in IGST Act and UTGST Act.
2. Section 11A: Inserted to empower the government to regularise non-levy or short levy of central tax due to any general practice prevalent in trade. Similar power is proposed in IGST Act, UTGST Act, and GST (Compensation to States) Act.
3. Section 16: New subsections (5) and (6) inserted to relax the time limit to avail input tax credit as per section 16(4) of the CGST Act, retrospectively from 01.07.2017, as follows:
a. For financial years 2017-18, 2018-19, 2019-20, and 2020-21: Input tax credit for these years can be claimed in any return under section 39 filed up to 30th November 2021.
b. For cases where returns have been filed after revocation: The time limit to avail input tax credit for invoices or debit notes during the period from the date of cancellation of registration to the date of revocation of cancellation will be extended till the date of filing the said GSTR-3B return, if filed within 30 days of the revocation order.
4. Section 74A: Inserted to provide a common time limit for issuance of demand notices and orders for FY 2024-25 onwards for cases involving charges of fraud, suppression of facts, or willful misstatement, and for cases not involving these charges. Also, the time limit for taxpayers to avail reduced penalty by paying the tax demanded along with interest is increased from 30 days to 60 days.
5. Sections 107 and 112: Amended to reduce the maximum amount of pre-deposit for filing an appeal with the Appellate Authority from Rs. 25 crore to Rs. 20 crore of central tax, and for filing an appeal with the Appellate Tribunal from 20% with a maximum amount of Rs. 50 crore to 10% with a maximum of Rs. 20 crore. Additionally, the time limit for filing appeals before the Appellate Tribunal is modified to prevent appeals from getting time-barred.
6. Section 128A: Inserted to provide a conditional waiver of interest and penalty for demands pertaining to financial years 2017-18, 2018-19, and 2019-20, where demand notices have been issued under section 73 and full tax liability is paid by the taxpayer before a notified date.
7. Section 140(7): Amended retrospectively from 01.07.2017 to enable availment of transitional credit for input services received by an Input Services Distributor prior to the appointed day, where invoices were also received prior to the appointed day.
8. Section 171: Amended to enable the Government to notify the GST Appellate Tribunal to handle anti-profiteering cases and to notify a date after which the Authority for Anti-Profiteering shall not accept applications for examination.
9. Schedule III: Paragraphs 8 and 9 inserted to state that the activity of apportionment of co-insurance premiums by the lead insurer to the co-insurers in the co-insurance agreement and the services by insurers to reinsurers in respect of ceding/reinsurance commission will, subject to certain conditions, be treated neither as a supply of goods nor as a supply of services.
10. Section 13(3): Amended by modifying clause (b) and inserting clause (c) to provide for a specific provision covering cases where the invoice is required to be issued by the recipient of services in case of RCM supplies.
11. Section 17(i): Amended to restrict blockage of input tax credit for tax paid under Section 74 to demands up to FY 2023-24.
12. Section 30(2): Second proviso may be inserted to provide for an enabling clause to prescribe conditions and restrictions for revocation of cancellation of registration.
13. Section 31(f): Amended to prescribe the time period within which the invoice must be issued by the recipient under reverse charge mechanism, and to clarify that a person registered solely for the purpose of deducting TDS under section 51 shall be treated as a person not registered for the purpose of clause (f) of section 31(3).
14. Section 39: Amended to mandate filing of returns by TDS deductors for every month, even if no deductions are made during the said month, and to provide for an enabling clause for prescribing the time limit for filing these returns.
15. Section 54 of CGST Act and section 16 of IGST Act: Amended to prohibit refund of unutilized input tax credit or integrated tax on zero-rated supply of goods subjected to export duty.
16. Section 70(1A): Inserted to allow appearance by an authorised representative on behalf of a summoned person.
17. Section 109: Amended to empower the government to specify cases to be heard only by the Principal Bench of the Appellate Tribunal.
18. Section 122(1B): Amended to restrict the applicability of penal provisions under this section to only those Electronic Commerce Operators required to collect tax at source under section 52.
19. Sections 73 and 74: Amended to limit the applicability of these sections to demands up to FY 2023-24, with demands from FY 2024-25 onwards to be ascertained per provisions of newly inserted section 74A. Also, Section 75 is amended to allow for redetermination of penalties if charges of fraud, suppression, or willful misstatement are not established. Further, references to section 74A are inserted in sections 10, 21, 35, 49, 50, 51, 62, 63, 64, 65, 66, 104, and 127.
Amendments in the IGST Act, 2017:
1. Section 5(1): Amended to not levy integrated tax on Extra Neutral Alcohol used for the manufacture of alcoholic liquor for human consumption.
2. Section 6A: Inserted to empower the Government to regularise non-levy or short levy of integrated tax where it is found that such non-levy or short levy was a result of general practice.
3. Section 16(4): Amended to provide for notification of class of persons who may make zero-rated supplies of goods or services or both, or class of goods or services which may be supplied on a zero-rated basis, and refund of integrated tax for which can be claimed as per Section 54 of the CGST Act, subject to conditions, safeguards, and procedures prescribed. Also, a new sub-section (5) inserted to provide that no refund of unutilized input tax credit or integrated tax paid on account of zero-rated supply of goods shall be allowed if the goods are subjected to export duty.
4. Section 20: Amended to reduce the maximum amount of pre-deposit payable for filing an appeal before the appellate authority from Rs. 50 crore to Rs. 40 crore of integrated tax, and for filing an appeal before the Appellate Tribunal from Rs. 100 crore to Rs. 40 crore of integrated tax.
Amendments in the UTGST Act, 2017:
1. Section 7(1): Amended to not levy union territory tax on Extra Neutral Alcohol used for the manufacture of alcoholic liquor for human consumption.
2. Section 8A: Inserted to empower the Government to regularise non-levy or short levy of union territory tax where it is found that such non-levy or short levy was a result of general practice.
Amendment in the GST (COMPENSATION) Act, 2017:
1. Section 8A: Inserted to empower the Government to regularise non-levy or short levy of cess where it is found that such non-levy or short levy was a result of general practice.
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