The Rajya Sabha had recently given its approval to the Finance Bill, 2023, presented by the Union Finance Minister Nirmala Sitharaman. The Finance Bill, 2023 has also proposed some amendments to the Income Tax Act that taxpayers and investors need to look out for.
The Indian government has recently proposed changes to the Goods and Services Tax (GST) laws. The proposed amendments aim to provide relief to certain categories of people who are exempt from GST registration and streamline the dispute resolution process.
The government proposes to amend Section 30(1) of the Central Goods and Services Tax Act, which deals with revocation of cancellation of Goods and Services Tax registration. The proposed amendment would remove the restriction on the registered person to apply for revocation of cancellation of its GST registration within 30 days from the date of service of the cancellation order.
This means that any registered person whose registration is canceled by the proper officer on his own motion may apply to such an officer for revocation or cancellation of registration within such time and subject to such conditions and restrictions as may be prescribed.
The government proposes to amend Section 62(2) of the CGST Act, which deals with assessment of unregistered persons. The proposed amendment would provide the time period of 60 days instead of 30 days for furnishing return Form GSTR 3B or Form GSTR 10 (Final Return) where the proper officer has assessed tax liability on a best judgment assessment basis.
If a registered person fails to furnish a valid return within 60 days of the service of the assessment order, he may furnish the same within a further period of 60 days on payment of an additional late fee of INR 100/- for each day of delay beyond 60 days of the service of the assessment order.
If a valid return is furnished within such an extended period, the assessment order shall be deemed to have been withdrawn, but the liability to pay interest under Section 50(1) and late fee under Section 47 of the Central Goods and Services Tax Act shall continue.
The government proposes to amend Section 23(2) of the Central Goods and Services Tax Act, 2017, with a non-obstante clause, that would be retrospectively applicable from July 1, 2017. The proposed amendment states that persons required to register under GST as per Section 22(1) of the CGST Act and compulsory registration under Section 24 of the CGST Act do not need to register if they are exempt from registration.
There are certain specified persons already exempt from compulsory registration, such as a person making outward supplies exclusively covered under reverse charge mechanism (RCM), a person making supplies of services through an E-Commerce Operator with an aggregate turnover not exceeding INR 20L in a FY, a person supplying handicraft goods with an aggregate turnover not exceeding INR 20L in a FY, and a person making inter-state supplies of taxable services with an aggregate turnover not exceeding INR 20 Lakhs in a FY.
The proposal is to revise the Constitution of the GST Appellate Tribunal (GSTAT) and its benches. Section 109 of the Central Goods and Services Tax Act is suggested to be substituted to authorize the Principal Bench and State Benches to exercise the jurisdiction, powers, and authority of the Goods and Services Tax Appellate Tribunal, rather than the ‘National Bench or Regional Bench.’ In each state, a State Bench will be established, and there will be a Principal Bench in New Delhi.
The Principal Bench will have the President, a Judicial Member, a Technical Member (Centre), and a Technical Member (State). The Principal Bench will exclusively hear cases involving the place of supply. The State Benches will consist of two Judicial Members, a Technical Member (Centre), and a Technical Member (State).
Appeals involving an amount up to INR 50 lakh with no question of law may be heard by a single member, while all other cases will be heard jointly by one Judicial Member and one Technical Member. Sections 110, 114, 117, 118, and 119 of the Central Goods and Services Tax Act, 2017 are amended accordingly.
The proposals also include omitting Section 13(9) of the Integrated Goods and Services Tax Act, which deals with the place of supply of services of transportation of goods (excluding mail or courier). As a result, the location of the recipient of services will be the place of supply of services for transportation of goods, other than by mail or courier, as per the default provision of Section 13(2) of the Integrated Goods and Services Tax Act.
Finally, the proposal suggests amending the Schedule of the GST (Compensation to States) Act, 2017, to revise the maximum rate at which GST Compensation Cess may be collected for items such as Pan Masala and Tobacco. The proposed maximum rates for Pan Masala and Tobacco products are 51% of the retail sale price/unit and INR 4170/1000 sticks or 290% ad valorem or a combination thereof, respectively. A new explanation is also proposed to define the scope of ‘retail sale price’.
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