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Writer's pictureCA Hemant Singhal

GST MONTHLY | BUDGET PROPOSALS | FEB 23

1. GST DEADLINES

1.1.Deadlines | Feb 23


GST Compliance Calendar – Feb 2023




2. UNION BUDGET 2023 PROPOSED AMENDMENTS


The following major amendments are proposed by The Finance Bill, 2023 with respect to the Goods and Services Tax Act, 2017. They shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint.

2.1. Composition Levy applicable to ECO

(Clause 128 of the Finance Bill, 2022)

The Bill sought to amend Section 10 so as to remove the restriction imposed on registered persons engaged in supplying goods through electronic commerce operators from opting to pay tax under the composition levy. The GST Council had recommended that the scheme may be implemented w.e.f. 01.10.2023.


2.2 Restriction on late filing of specified GST Returns beyond 3 years

(Clause132, 133,134 and 135 of the Finance Bill, 2022)

Earlier there was no time limit on the late filing of returns. Now late filing of following GST returns have been restricted to 3 years from the due date of filing of the returns:-

a. GSTR-1

b. GSTR-3B

c. Annual Return

d. TCS Return


2.3 Interest on Delayed Refunds

(Clause 137 of the Finance Bill, 2022)

There has been an amendment in Section 56 of CGST Act, 2017 which now specifies the computation of interest on delayed refund. It states that the computation of interest shall be made from the 61st day from the date of receipt of application.


2.4 Penal Provision for Electronic Commerce Operators (ECO)

(Clause 138 of the Finance Bill, 2022)

Clause 138 of the Bill sought to insert a new provision in section 122 of the Central Goods and Services Tax Act so as to provide for penal provisions applicable to ECO in case of contravention of provisions relating to supplies of goods or services made through them by unregistered persons or composition taxpayers. The amendment states that such ECO will be liable to pay a penalty of

a) Rs. 10,000/-

OR

b) An amount equivalent to the amount of tax involved; Whichever is higher


2.5 Decriminalization of Offences

(Clause 140 of The Finance Bill, 2022)

The Union Budget proposed to – raise the minimum threshold of tax amount for launching prosecution under GST from one crore Rupees to two crore Rupees, except for the offense of issuance of invoices without supply of goods or services or both and also a reduction in the compounding amount from the present range of 50 per cent to 150 percent of tax amount to the range of 25 per cent to 100 percent.

2.6 Input tax Credit related to CSR

(Clause130 of the Finance Bill, 2022)

Section 17(5) of CGST Act 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.

Section 135 of Companies Act, 2013 states that the board of every company shall spend in every financial year, at least 2% of average net profits of the company made during the year. And if a company spends more than 2% then also ITC shall not be available.


2.7 Sharing of Information

(Clause 141 of the Finance Bill, 2022)

A new section 158A in CGST Act was proposed to be inserted to enable consent based sharing of the information furnished by the registered person in his returns or application of registration, or electronic invoice or E-way bill or any other details on the common portal, with other systems in a manner to be prescribed.


2.8 Changes in the definition of Non Taxable Online Recipient

(Clause 143 of the Finance Bill, 2022)

Clause (16) of section 2 of IGST Act is suggested to be 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 (OIDAR) for purposes other than commerce, industry or any other business or profession so as to provide for taxability of 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. Further, it also seeks to clarify that the persons registered solely in terms of clause (vi) of Section 24 of CGST Act shall be treated as unregistered persons for the purpose of the said clause.


2.9 Changes in provision of Section 12 of IGST Act, 2017

(Clause 144 of the Finance Bill, 2022)

Proviso to sub-section (8) of section 12 of the IGST Act is being omitted so as to specify the place of supply, irrespective of destination of the goods, in cases where the supplier of services and recipient of services are located in India. It has been omitted so as to avoid the confusion regarding availment of input tax credit and other matters.


2.10 Amendment to Schedule III of CGST Act, 2017

(Clause 142 of the Finance Bill, 2022)

The bill seeks to amend Schedule III of CGST Act, 2017 to give retrospective applicability to paragraphs 7 and 8 and the explanation 2 to the said schedule with effect from 01.07.2017.


2.11 Amendment in the definition of online information and database retrieval services

(Clause 143 of the Finance Bill, 2022)

Clause (17) of section 2 of IGST Act is being amended to revise the definition of “online information and database access or retrieval services” to remove the condition of rendering of the said supply being essentially automated and involving minimal human intervention.


2.12 Reversal of Input Tax Credit –High Sea Sales

(Clause 130 of the Finance Bill, 2022)

Section 17(3) has been amended to include high sea sales in exempt supply for the purpose of reversal in Rule 42 and 43 of CGST Rules, 2017.


3. GST Portal Updates


3.1 Advisory on facility of ‘Initiating Drop Proceedings’ of Suspended GSTINs due to Non-filing of Returns


Recently, a functionality of "Automated Drop Proceedings" of GSTINs suspended due to non-filing of returns has been implemented on the GST Portal. This functionality is available for the taxpayers who have filed their pending returns i.e. 6 monthly or 2 Quarterly returns.


3.2 Advisory on taxpayers facing issue in filing GSTR-3B


It has been observed that, in the process of filing TRAN forms, few taxpayers have submitted their forms on the portal but did not finally file it within the specified time i.e 1-10-2022 to 30-11-2022. After submitting the Tran Forms, only filing was to be done with e-sign. Further, it is seen that such taxpayers have not raised any ticket for difficulty faced by them in filing Tran Forms. The TRAN filing window has already been closed. Hence, such taxpayers are advised to raise a ticket on GST Grievance Portal giving consent that their TRAN filing status may be reset by GSTN. Once the consent for resetting their unfiled TRAN forms is received, the TRAN forms will be reset and the taxpayer will be able to file their GSTR-3B.


4. Notifications


4.1 Mobile Number and Email of the applicant no longer required

(Notification No. - 26/2022-Central Tax; Dated 26-12-2022)


Now declaration of mobile number and e-mail address by the person applying for the GST Registration is not required Permanent Account Number (PAN) shall be verified through separate OTPs sent to the mobile number and email address linked to the Permanent Account Number (PAN).” It was also clarified that the Amended Part A of Form GST REG-01 will state that the Email id and mobile number of the applicant shall be auto-populated from the Income Tax database as linked with the PAN of the applicant.



Disclaimer: “This material is intended to provide general information on particular subject(s) and is not an exhaustive treatment of such subject(s) or a substitute to obtaining professional service or advice. It is strongly recommended to seek professional advice before implementation of any of the aspects covered in the presentation.”)

Author can be reached at ca.hsinghal@gmail.com; +91 99172 11511

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