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Policy Update - Goods and Services Tax
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Below is the quick summary of the notifications:
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Notification |
Amendment |
Deloitte comments |
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Notification 5/2023 IGST |
In addition to the restrictions on refund, for the export of goods or services for specified goods, restriction is placed on refund of specified goods for SEZ as provided below: "All suppliers to a Developer or a unit in Special Economic Zone undertaking authorised operations as the class of persons who may make supply of goods or services (except the goods specified in column (3) of the TABLE below) to such Developer or a unit in Special Economic Zone for authorised operations on payment of integrated tax and on which the said suppliers may claim the refund of tax so paid." |
Except for supply of goods like Tobacco, Pan Masala, Hookah, Cigarettes etc as specified in the notification 1/2023 IGST, suppliers will be entitled to refund of tax paid on supplies made to a Developer or a unit in SEZ undertaking authorised operations, with effect from October 01, 2023.
This amendment resolves the issue that had arisen due to amendment of Section 16 whereby rebate method was not available wef 01 October 2023 for supplies made to SEZ recipients. |
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Notification 52/2023 CGST |
New valuation rules is as inserted as provided below under Rule 28 “(2) Notwithstanding anything contained in sub-rule (1), the value of supply of services by a supplier to a recipient who is a related person, by way of providing corporate guarantee to any banking company or financial institution on behalf of the said recipient, shall be deemed to be one per cent of the amount of such guarantee offered, or the actual consideration, whichever is higher.” |
A new sub-rule has been inserted for the valuation of corporate guarantees between related parties, the valuation of corporate guarantees shall be higher of: (a) 1% of the amount of guarantee offered or (b) Actual consideration provided for such guarantee |
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In Rule 142(3) for the words “proper officer shall issue an order”, the words “proper officer shall issue an intimation” shall be substituted. |
Proper officer can only issue an intimation and not further order in Form DRC – 05 concluding proceedings of the notice if any payment is made through FORM DRC – 03 within 30 days of issue of show cause notice |
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The following words are included in rule 159 (2) after the words Commissioner to that effect On expiry of a period of one year from the date of issuance of order under sub-rule (1), whichever is earlier |
With effect to this amendment action shall be taken by the revenue authorities on the movable or immovable property attached by the commissioner of GST through FORM GST DRC – 22 on the earlier of following: (a) After written instruction are received from the commissioner to take such action or (b) After expiry of one year from the date of issue of order in FORM GST DRC – 22 |
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In Form GST REG – 01 in Part B "One person company" shall be included |
A separate option is provided for registration of One Person Companies, before this amendment one person companies were registered under private limited companies |
In addition, New Form GST REG-08 has been introduced in place of earlier one for Order of Cancellation of Registration as Tax Deductor at source or Tax Collector at source.
Also, changes have been made to GSTR-8 (Statement for tax collection at source) to provide for payment of late fee.
Notification 1Notification 2Government constitutes State Benches of GST Appellate Tribunal – Meeting the long standing ask of the industry and the forum, Central Government, on recommendations of the GST Council, constituted State Benches of Goods and Service Tax Appellate Tribunals. 31 benches constituted across various States, effective September 14, 2023. Press release.
National Informatics Centre (NIC) implements 30-day time limit for reporting of GST invoices with effect from Nov 01, 2023
Central Board of Indirect Taxes & Customs (CBIC) prescribes valuation rules for supplies made in online gaming and casino
Summary of Notifications issued by CBIC pursuant to enforcement of Finance Act 2023 and 50th GST Council Meeting decisions
For more information click here.
The Central Board of Indirect Taxes & Customs has prescribed the manner of processing and sanction of IGST refunds, withheld in terms of clause (c) of sub-rule (4) of rule 96, transmitted to the jurisdictional GST authorities under sub-rule (5A) of rule 96 of the Central Goods and Service Tax Rules, 2017. The instruction dated 28 November 2022 can be accessed.
During the 47th GST Council meeting held earlier this year, the issue of uneven practices followed by the field formations regarding the issuance of recurring Show Cause Notices (SCNs) was discussed in detail. Following the same, the Council has issued an Office Memorandum clarifying that initial and recurring SCNs to be issued by same authority, and that recurring SCNs are to be issued by actual jurisdictional authorities responsible for assessment of returns of the taxpayer. The Memorandum dated October 19, 2022 can be accessed here.
The amendments to the CGST Act as proposed in the Union Budget 2022 have now been notified by CBIC, to be effective from October 01, 2022. Consequential amendments to the CGST Rules have also been made w.e.f. October 01, 2022. The Notification Nos. 18 to 20/2022- Central Tax all dated September 28, 2022 can be accessed here.
Pursuant to the recommendations of the GST Council in its 47th meeting held on 28-29 June, CBIC issued a series of circulars in response to requests for clarifications from industry on various issues:
The above Circulars issued on August 03, 2022, can be accessed here.
CBIC has notified that e-invoicing under GST will now be applicable to taxpayers having aggregate turnover exceeding INR10 crore in any preceding financial year from 2017-18 onwards. The Notification No.17/2022 – Central Tax dated August 01, 2022 can be accessed here.
In response to a question posed in Rajya Sabha, the Minister of State for Finance Mr. Pankaj Chaudhary clarified that the ruling of the Supreme Court of India in Union of India & Anr. v M/s Mohit Minerals Pvt. Ltd. (which held that recommendations of the GST Council are non-binding on States) does not alter the constitutional mechanism of the GST Council. He stated that the State and Central Acts provide that rates, exemptions and rules etc. would be prescribed only on the recommendations of the council, and therefore are binding on the States and the Centre.
The documented response against Unstarred Question No. 203 on July 19, 2022 can be accessed here.
CBIC issued a series of notifications giving effect to the GST rate related decisions taken in the 47th Meeting of the GST council held last month. The relevant notifications No. 03/2022 to 11/2022-Central Tax (Rate) dated July 13, 2022 can be accessed here. A summary of these rate changes, effective July 18, 2022, is also available on the Tax Forum website.
Pursuant to the recommendations and decisions taken in the 47th GST Council meeting, the CBIC has given effect to the same via issue of necessary circulars and notifications (the relevant circulars can be accessed and the Notifications No. 09/2022 to 14/2022 can be accessed. A summary of these circulars and notifications is also available on the Tax Forum website.
In view of the recommendations of the 47th GST Council Meeting, a GoM was constituted to address necessary changes to provisions governing GST Appellate Tribunals. The GoM consists of Ministers from Haryana, Uttar Pradesh, Goa, Rajasthan, Andhra Pradesh, and Odisha. The Office Memorandum dated July 06, 2022 can be accessed here.
Section 194-R, which came into effect on July 01, 2022 introduced TDS on benefits/ perquisites granted in the course of business to any resident taxpayer. While CBDT issued clarifications last month to address implementation issues arising from this levy, the industry has expressed numerous concerns from a practical and legal standpoint. In continuation of our advocacy efforts on Direct Tax matters, the Forum has collated details of such difficulties, and shall be organising a meeting with key officials from the Tax Policy and Legislation Unit of CBDT, and making a representation on behalf of the industry.
For further details please reach us here