Important Changes in GST as per the Union Budget 2023

Shubhangi Jain

24 May, 2024

GST is an essential part of the Indian taxation system and has led to various remarkable developments in matters related to tax since its introduction. The Finance Minister, Smt Nirmala Sithraman, bought many changes in various taxes, including GST, in the Union Budget 2023. The present article shall discuss the  Important changes in GST to provide clarity on the same.

What are the Important Changes in GST as per the Union Budget 23?

The important changes in GST as per the Union Budget 2023 are enlisted below.

Decriminalization GST Offences

One of the most crucial changes in the GST is the decriminalisation of GST Offences wherein there shall be an amendment of Section 132 and section 138 of CGST  for raising the minimum threshold of tax amount for the launch of prosecution under GST from 1 Cr to 5 Cr, except for the offence of issue of invoices in the absence of the supply of goods, services or both of them.

There shall be a reduction in the compounding amount from  50 % to 150 per cent of the tax amount from 25 % to 100 per cent. Decriminalization of certain offences specified under section 132 (1) (g), (j) and (k)  of CGST Act, 2017 relating to obstruction or preventing any officer towards the discharge of his duties; and deliberate tempering of material evidence; or failure to supply the information.

Facilitation of E-Commerce for Micro Enterprise

 Sections 10  & 122 of the CGST Act are being amended for enabling unregistered suppliers and composition taxpayers to make the intra-state supply of goods through E-Commerce Operators (ECOs), depending upon certain conditions making it an important change among other Changes in GST.

Amendments to Schedule III of the CGST Act

The insertion of sections 7, 8  a & b in Schedule III of the 2017 CGST Act wef 01.04.2019   was done for keeping certain transactions/activities, such as high sea sales and supply of warehoused goods before their home clearance, supplies of goods from one place outside the territory taxable to another place outside the taxable territory outside GST’s purview.

For the removal of the doubts and ambiguities with regard to the taxability of such transactions/ activities during the period 1^st July 2017 to 31^st January 2019, provisions are being incorporated to make the said paras effective from 01.07.2017. However, no refund of tax paid would be availed in cases where any tax has already been paid for such transactions/ activities during the period 01.07.2017 to 31.01.2019. This can be considered another important change which forms a part of the changes in the GST

GST Return Filing and Statement

Amendment of Sections 37, 39, 44 and 52 of CGST Act,  for restricting the return filing/statements to a maximum time span of 3 years from the filing due date of the relevant return or statement.

GST ITC for CSR-Related Expenditure

Amendment of Section 17(5) of CGST Act to provide that input tax credit won’t be available for goods,  services, or both being received by a taxable person that are used or intended to be used for activities in relation to his obligations under CSR as stated 135 of the Companies Act, 2013.

Sharing of Data

There shall be an insertion of a new section of the CGST Act for allowing the registered person for sharing information with other systems in the prescribed manner,  irrespective of it being a registration application, the information provided in a return, statement of outward supplies, or  E-way bill, details uploaded for the creation of an electronic invoice, or any other details on the common porta which is one of the remarkable changes in GST.

GST Amendments in Section 2 (16) of IGST Act, 2017

Revision of Section 2 (16) of IGST Act, 2017 is being done for the purpose of updating the definition of “non-taxable online recipient,”. It will be fulfilled by the elimination of the requirement that online information and database access and retrieval services for purposes other than commerce, industry, or any other business or profession in order to ensure that OIDAR services rendered by any person situated in non-taxable territory to an unregistered person who receives the aforementioned services and resides in a taxable territory are subject to taxation.

It also aims to provide a clarification that individuals registered only for purposes of clause (vi) of Section 24 of the CGST Act would be termed as unregistered individuals for the purposes of the aforementioned clause.

Retrieval Services or Information and Database Access Online

 Revision of the definition of “online information and database access or retrieval services” in the IGST Act for the purpose of removing the requirement for the provision of the stated supply to be mostly automated and involve minimal human participation.

Place of  the Supply

According to IGST Act, the proviso to 12(8) of the IGST act shall be eliminated in the event of the recipient and the service provider designating the location of supply, regardless of the destination of the goods.

Conclusion

These changes in GST can facilitate better management of GST, encourage timely GST filing, promotion of CSR among businesses, secure sharing of data, providing much-needed clarifications, among other aspects related to GST. 

Also Read: Proposed changes in GST law in 2022 Budget