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Nirmala Sitharaman announced nine legislative changes in the GST law

In the Union Budget 2023, Finance Minister Nirmala Sitharama n announce d nine legislative changes in the GST Law.

The compounding amount is reduced from the present range of 50 per cent to 150 per cent of tax amount to the range of 25 per cent to 100 per cent. This was done to raise the minimum threshold of tax amount for launching prosecution under GST from Rs 1 crore to Rs 2 crore. Except for the offence of issuance of invoices without supply of goods or services or both. 

obstruction or preventing any officer in discharge of his duties; deliberate tempering of material evidence; failure to supply the information are some of the offences that have been decriminalised. 

Facilitate e-commerce for micro enterprises 

Amendments are being made to enable unregistered suppliers and composition taxpayers to make intrastate supply of goods through E-Commerce Operators (ECOs), subject to certain conditions.

Amendment to Schedule III of CGST Act, 2017 Activities or transactions which shall be treated neither as a supply of goods nor a supply of services

The changes made in Schedule III of CGST Act, 2017 with effect from February 1, 2019 kept certain transactions/activities, such as supplies of goods from a place outside the taxable territory to another place outside the taxable territory, high sea sales and supply of warehoused goods before their home clearance, outside the purview of GST. 

In order to remove the doubts and ambiguities regarding taxability of such transactions/ activities during the period July 1, 2017 to January 31, 2019, the provisions are being incorporated to make the said changes effective from July 1, 2017. 

However, no refund of tax paid shall be available in cases where any tax has already been paid in respect of such transactions/ activities during the period July 1, 2017 to January 31, 2019. 

Return filing under GST 

Amendment is made to restrict filing of returns/statement to a maximum period of three years from the due date of filing of the relevant return/statement. 

Input Tax Credit for expenditure related to CSR 

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 their obligations under corporate social responsibility. 

Sharing of information 

A new section in CGST Act is being inserted to enable sharing of the information furnished by the registered person in their return or application of registration or statement of outward supplies, or the details uploaded by them for generation of electronic invoice or E-way bill or any other details on the common portal, with other systems in a manner to be prescribed. 

Amendments in section 2 clause (16) of IGST Act, 2017

Clause (16) of section 2 of IGST Act is amended to revise the definition of “non-taxable online recipient”. This will be done by removing the condition of receipt of online information and database access or retrieval services 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 nontaxable 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 person for the purpose of the said clause.

Online information and database access or retrieval services 

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. 

Place of supply in certain cases 

Under IGST Act (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.

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