FINANCE BUDGET UPDATES

Goods and Service Tax

R.K KALRA & COMPANY

Chartered Accountants
 Amendments in the CGST Act, 2017

S.No. Section Amendment Analysis

Section 9 is being amended to take Now, it is proposed that apart from alcohol, even "un-
Extra Neutral Alcohol used in denatured extra neutral alcohol or rectified spirit used for
manufacture of alcoholic liquor for manufacture of alcoholic liquor, for human consumption" to
1. 9 (1) human consumption out of purview be kept out of levy of GST. This change aims to simplify the
of central tax. Similar amendments tax compliance and reduce tax burden on manufacturers of
are also proposed in IGST Act and alcoholic beverages.
UTGST Act.
This new section allows the government to address and
Section 11A is being inserted to
rectify tax discrepancies arising from established industry
empower the government to
practices. It provides flexibility to the government to correct
regularize non-levy or short levy of
inadvertent tax lapses from common trade practices,
central tax due to any general
2. 11A ensuring fair tax administration.
practice prevalent in trade. Similar
power is being proposed in IGST
The government can issue a notification in the Official
Act, UTGST Act and GST
Gazette to direct the tax treatment of supplies affected by
(Compensation to States) Act.
the discrepancy.
Amendment is proposed in case where
payment is not made in advance to supplier,
Amendment is proposed in sub
section (3) of Section 13 of CGST Clause b- tax liability shall arise earlier of 60
Act to provide for time of supply of days from the date of issue of invoice by the
3. 13(3) services where the invoice is Supplier in case where supplier is required to
required to be issued by the issue an invoice.
recipient of services in cases of
reverse charge supplies. Clause c- date of issue of invoice by the
recipient, in case where invoice is to be issued
by the Recipient.
Section 16 has been amended to
extend the time limit to claim input
tax credit in the following two
cases:
Subsection (5)- Allows ITC for invoices or debit notes for
1. Invoices or debit notes pertaining
FY 2017-18 to FY 2020-21 in any return filed up to
to FY 2017-18 to 2020-21;
November 30, 2021.
2. Invoices or debit notes during the
Subsection (6)- Permits ITC availment for the period from
registration cancellation periods
cancellation to revocation of registration, provided the time
limit hasn't expired.
Where the tax has been paid or ITC
16(5)
has been reversed, no refund of the
4. and  Upto 30th November following the financial year of
same shall be admissible.
16(6) the invoice/ debit note, or the date of filling of
relevant annual return,
(Effective from 01 July 2017)
 Where return has been filled within 30 Days from
the date of order of revocation of cancellation of
registration;

whichever is later.

R.K. KALRA & COMPANY

Chartered Accountants
S.No. Section Amendment Analysis

Sub-section (5) of section 17 of the

CGST Act is being amended, so as
to restrict the non-availability of
input tax credit in respect of tax The aforesaid section has been amended since section 74
paid under section 74 of the said will be substituted by 7A.
5. 17(5) Act only for demands upto
Financial Year 2023-24. Further, reference to Sec. 129 and Sec. 130 has been
removed.
It also removes reference to
sections 129 and 130 in the said
sub-section.
A new proviso in sub-section (2) of
section 30 of the CGST Act is being
inserted, so as to provide for an This amendment introduces a new proviso regarding the
6. 30(2) enabling clause to prescribe revocation of cancellation of registration, allowing for
conditions and restrictions for prescribed conditions and restrictions to be applied.
revocation of cancellation of
registration.
Clause (f) of sub-section (3) of
section 31 of the CGST Act is being
amended, so as to incorporate an This amendment is introduced to prescribe the time period
enabling provision for prescribing for issuance of invoice by the recipient in case of RCM
the time period for issuance of supplies.
7. 31(3) invoice by the recipient in case of
reverse charge mechanism Further, the explanation clarifies that the term "supplier who
supplies. is not registered" includes suppliers registered solely for the
purpose of deducting tax under section 51.
Explanation in sub-section (3) is
also inserted.
Sub-section (3) of section 39 of the
CGST Act is being substituted, so
as to mandate the electronic
The registered persons required to deduct TDS must
furnishing of return for each month
electronically furnish a return for every calendar month,
by the registered person required
regardless of whether any deductions were made during
to deduct tax at source, irrespective
the month.
8. 39(3) of whether any deduction has been
made in the said month or not.
Before amendment, the return was required to be furnished
within 10 days after the end of the month in which
It also empowers the Government
deductions were made.
to prescribe by rules, the form,
manner and the time within which
such return shall be filed.
Sub-section (3) is being amended
and a new subsection (15) is being The second proviso in sub-section (3) of section 54 is
inserted in section 54 of the CGST omitted.
Act, so as to provide that no refund
9. 54 of unutilised input tax credit or A new sub-section (15) is added to section 54, restricting
integrated tax shall be allowed in refund of unutilised input tax credit or integrated tax on
cases of zero-rated supply of account of zero-rated supply of goods subject to export
goods where such goods are duty.
subjected to export duty.

R.K. KALRA & COMPANY

Chartered Accountants
S.No. Section Amendment Analysis

1A) All persons summoned under

sub-section (1) shall be bound to
attend, either in person or by an
authorised representative, as such Sub-section (1A) is being inserted in section 70 of the
officer may direct, and the person CGST Act, to enable an authorised representative to
10. 70 so appearing shall state the truth appear on behalf of the summoned person before the
during examination or make proper officer in compliance of summons issued by the said
statements or produce such officer.
documents and other things as
may be required.

(12) The provisions of this section

Sub-section (12) is being inserted in section 73 of the
shall be applicable for
CGST Act, so as to restrict the applicability of the said
determination of tax pertaining to
11. 73 section for determination of tax pertaining to the period upto
the period upto Financial Year
Financial Year 2023-24.
2023-24.

(12) The provisions of this section

Sub-section (12) is being inserted in section 74 of the
shall be applicable for
CGST Act, so as to restrict the applicability of the said
determination of tax pertaining to
12. 74 section for determination of tax pertaining to the period upto
the period upto Financial Year
Financial Year 2023-24.
2023-24.

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Chartered Accountants
 Notice Issuance
The proper officer shall issue the notice under sub- section
(1) within forty-two months from the due date for furnishing
of annual return for the financial year to which the tax not
paid or short paid or input tax credit wrongly availed or
utilised relates to or within forty-two months from the date
of erroneous refund.

Statement Service
Where a notice has been issued for any period under sub-
section (1), the proper officer may serve a statement,
containing the details of tax not paid or short paid or
erroneously refunded or input tax credit wrongly availed or
utilised for such periods other than those covered under
subsection (1), on the person chargeable with tax.

Deemed Service of Notice

The service of such statement shall be deemed to be
service of notice on such person under subsection (1),
subject to the condition that the grounds relied upon for
such tax periods other than those covered under sub-
section (1) are the same as are mentioned in the earlier
notice.

(5) The penalty in case where any tax which has not been
paid or short paid or erroneously refunded, or where input
tax credit has been wrongly availed or utilised, -
Section 74A is being inserted in the
CGST Act, so as to provide for For any reason, other than fraud
determination of tax not paid or Shall be equivalent to 10% of tax due from such person or
short paid or erroneously refunded ten thousand rupees,
13. 74A or input tax credit wrongly availed whichever is higher.
or utilised for any reason pertaining
to the Financial Year 2024-25 For fraud or wilful misstatement
onwards. Shall be equivalent to the tax i.e. 100% of tax due from such
person.

(6) The proper officer shall, after considering the

representation, if any, made by the person chargeable with
tax, determine the amount of tax, interest and penalty due
from such person and issue an order.

(7) Order Issuance

The proper officer shall issue the order under sub-section
(6) within 12 months from the date of issuance of notice
specified in sub-section (2).

Extension Provision
If unable to issue the order within the specified period, an
extension of up to 6 months can be granted by the
Commissioner or an authorized officer senior in rank having
regard to the Reasons for delay to be recorded in writing.

(8) Payment Options (No fraud cases)

The person chargeable with tax has two options:

• Before Service of Notice: Pay tax with interest based on

own calculation or officer's assessment and inform the
proper office not to Issue Notice under Subsection (1).
• After Service of Notice: Pay tax with interest within 60
Days to conclude proceedings without penalty.

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Chartered Accountants
 (9) Payment Options (Fraudulent cases)
The person chargeable with tax has three payment options
based on the situation:

• Option 1: Pay Tax, Interest, and 15% penalty

before Service of Notice and inform the proper
office not to Issue Notice under Subsection (1)
• Option 2: Pay tax, interest, and 25% Penalty
within 60 days of issuance of notice.
• Option 3: Pay tax, interest, and 50% penalty within 60
days of order communication.

(10) Where the proper officer is of the opinion that the

amount paid under clause (i) of sub-section (8) or clause (i)
of subsection (9) falls short of the amount actually payable,
he shall proceed to issue the notice as provided for in sub-
section (1) in respect of such amount which falls short of
the amount actually payable.

(11) Notwithstanding anything contained in clause (i) or

clause (ii) of sub-section (8), penalty under clause (i) of
sub- section (5) shall be payable where any amount of self-
assessed tax or any amount collected as tax has not been
paid within a period of thirty days from the due date of
payment of such tax.

(12) The provisions of this section shall be applicable for

determination of tax pertaining to the Financial Year 2024-
25 onwards

Explanation 1- For the purposes of this section,

• the expression “all proceedings in respect of the said

notice” shall not include proceedings under section 132;
• where the notice under the same proceedings is issued to
the main person liable to pay tax and some other persons,
and such proceedings against the main person have been
concluded under this section, the proceedings against all
the persons liable to pay penalty under sections 122 and
125 are deemed to be concluded.

Explanation 2- For the purposes of this Act, the expression

“suppression” shall mean non-declaration of facts or
information which a taxable person is required to declare in
the return, statement, report or any other document
furnished under this Act or the rules made thereunder, or
failure to furnish any
information on being asked for, in writing, by the proper
officer.

It is noteworthy that the following sections have been

amended so as to incorporate a reference of the proposed
new section 74A-

1. Section 10
2. Section 21
3. Section 35
4. Section 39
5. Section 49
6. Section 50
7. Section 51

R.K. KALRA & COMPANY

Chartered Accountants
S.No. Section Amendment Analysis

8. Section 61
9. Section 62
10. Section 63
11. Section 64
12. Section 65
13. Section 66
14. Section 104
15. Section 107
16. Section 127
Penalty Clarification
The amendment to Section 75 clarifies that the penalty
Sub-section (2A) is being inserted under Section 74A(5)(ii) is not applicable if the charges of
in section 75 in the CGST Act, so fraud or willful misstatement is not established. Instead, the
as to provide for redetermination of penalty under Section 74A(5)(i) shall be applicable in such
penalty demanded in a notice cases.
invoking penal provisions under
clause (ii) of sub-section (5) of the Adjudication Deadline
14. 75 proposed section 74A of the said The amendment to Section 75(10) deems the adjudication
Act to re-determine the penalty as proceedings as concluded if the order is not issued within
per clause (i) of the sub-section (5) the specified timelines under Sections 73, 74, or 74A.
of the said section, in cases where
the charges of fraud, wilful Appellate Proceedings
misstatement, or suppression of The amendments to Sections 107 and 112 provide
facts are not established. changes to the appeal filing timelines and the deposit
requirements for filing appeals before the Appellate
Tribunal.
Section 107(6)

No appeal shall be filed under sub- Sub-section (6) of section 107 of the CGST Act is being
section (1), unless the appellant amended, so as to reduce the maximum amount of pre-
has paid- deposit for filing appeal before the Appellate Authority from
rupees twenty-five crores in Central tax i.e. (total Rs. 50 Cr
(a) in full, such part of the amount for CGST + SGST or 50 Cr for IGST) to rupees twenty
of tax, interest, fine, fee and penalty crores in central tax i.e. (total Rs. 40 Cr for CGST + SGST
15. 107
arising from the impugned order, as or 40 Cr for IGST).
is admitted by him; and
(b) a sum equal to ten per cent. of It also amends sub-section (11) of the said section, so as
the remaining amount of tax in to incorporate a reference to the proposed new section 74A
dispute arising from the said order in the said section.
subject to a maximum of twenty
crore rupees, in relation to which
the appeal has been filed.

R.K. KALRA & COMPANY

Chartered Accountants
S.No. Section Amendment Analysis

Revisional Authority Expansion

The amendment to/ Section 109(1) allows the Revisional
Authority to conduct examinations or adjudicate cases
referred to in Section 171(2), if notified under the said
section.
Section 109 of the CGST Act is
Principal Bench Jurisdiction
being amended, so as to empower
The amendment to Section 109(5) mandates that the
the Government to notify types of
16. 109 matters referred to in Section 171(2) shall be examined or
cases that shall be heard only by
adjudicated only by the Principal Bench. The government
the Principal Bench of the
may also notify other cases or classes of cases to be heard
Appellate Tribunal.
only by the Principal Bench.

President’s powers
The amendment to Section 109(6) clarifies that the
President's powers are subject to the provisions of Section
109(5) regarding the jurisdiction of the Principal Bench.
Sub-sections (1) and (3) of section
112 of the CGST Act are being
amended, so as to empower the
Government to notify the date for
filing appeal before the Appellate
Tribunal and provide a revised time
limit for filing appeals or application Appeal Filing Timelines
before the Appellate Tribunal. The The amendment to Section 112(1) and (3) provides that the
said amendment is made effective appeal filing timelines shall be the later of the existing
from the 1st day of August, 2024. timelines or the date notified by the government on the
recommendations of the Council.
Sub-section (6) of the said section
is also being amended so as to Condonation of Delay
enable the Appellate Tribunal to The amendment to Section 112(6) allows the Appellate
admit appeals filed by the Tribunal to permit the filing of an application within three
17. 112
department within three months months after the expiry of the appeal filing timelines.
after the expiry of the specified time
limit of six months. Deposit Requirements
The amendment to Section 112(8) reduces the deposit
Sub-section (8) of the said section requirement for filing appeals before the Appellate Tribunal
is also being amended so as to from 20% to 10% of the disputed tax amount, subject to a
reduce the maximum amount of cap of ₹20 crore (which was earlier 50 Crore).
pre-deposit for filing appeals before
the Appellate Tribunal from the
existing twenty percent to ten
percent of the tax in dispute and
also reduce the maximum amount
payable as pre-deposit from rupees
fifty crores to rupees twenty crores
in central tax.
Liability Clarification
Sub-section (1B) of section 122 of
The amendment to Section 122(1B) clarifies that the
the CGST Act is being amended,
penalty provisions apply to electronic commerce operators
so as to restrict the applicability of
who are liable to collect tax at source under Section 52.
18. 122 the said sub-section to electronic
commerce operators, who are
Effective Date
required to collect tax at source
The amendment to Section 122(1B) will come into effect
under section 52 of the said Act.
from 1st Oct, 2023.

R.K. KALRA & COMPANY

Chartered Accountants
S.No. Section Amendment Analysis

The Central Goods and Services Tax Act has introduced a

new section, 128A, which provides relief to taxpayers by
waiving interest and penalty for certain tax periods. This
amendment aims to ease the burden on taxpayers who
have outstanding tax liabilities from July 1, 2017, to March
31, 2020, and are willing to pay the full amount of tax due.
The provision offers a one-time opportunity for taxpayers to
settle their dues without incurring additional interest or
penalties, subject to certain conditions.

Eligible Notices and Orders

The waiver applies to tax liabilities under notices issued
under Section 73(1), statements issued under Section
Section 128A in the CGST Act is
73(3), and orders passed under Sections 73(9), 107(11), or
being inserted, to provide for a
108(1) of the Act.
conditional waiver of interest and
penalty in respect of demand
Payment Deadline
notices issued under section 73 of
Taxpayers must pay the full amount of tax due by the date
the said Act for the Financial Years
notified by the government on the recommendations of the
2017-18, 2018-19 and 2019-20,
Council to be eligible for the waiver.
19. 128A except the demand notices in
respect of erroneous refund.
Pending Appeals
The waiver is not applicable if the taxpayer has a pending
In cases where interest and penalty
appeal or writ petition before the Appellate Authority,
have already been paid in respect
Appellate Tribunal, or a court.
of any demand for the said financial
years, no refund shall be
Additional tax payable
admissible for the same.
If the taxpayer has filed an application under Section 107(3)
or 112(3), or if an officer of central tax has filed an appeal
under Section 117(1) or 118(1), the taxpayer must pay any
additional tax payable within three months of the order to
avail the waiver.

Erroneous Refunds
The waiver does not apply to any amount payable by the
taxpayer on account of erroneous refunds.

No Refund of Paid Interest and Penalty

If the interest and penalty have already been paid, no
refund will be available under this provision.
Sub-section (7) of section 140 of
Previous Provision
the CGST Act is being amended,
Under the earlier provision, input tax credit could be
so as to enable availment of the
claimed for services received on or after the appointed day,
transitional credit of eligible
even if the invoices were received later.
CENVAT credit on account of input
20. 140
services received by an Input
Amended provision
Services Distributor prior to the
The amendment allows input tax credit to be claimed for
appointed day, for which invoices
services, whether the invoices are received prior to, on, or
were also received prior to the
after the appointed day.
appointed date.

R.K. KALRA & COMPANY

Chartered Accountants
S.No. Section Amendment Analysis

Proviso and Explanation is being Notification for ending examination requests

inserted in subsection (2) of section The government may notify a date after which the Authority
171 of the CGST Act, so as to will not accept any requests for examination of whether
empower the Government to notify input tax credits or tax rate reductions have resulted in
21. 171 the date from which the Authority commensurate price reductions.
under the said section will not
accept any application for anti- Expanded Definition of "Authority"
profiteering cases. The term "Authority" now includes the Appellate Tribunal
for the purposes of this section.
Para 9

Activity of apportionment of co-

insurance premium by the lead
insurer to the co-insurer for the
insurance services jointly supplied
by the lead insurer and the co-
insurer to the insured in
coinsurance agreements, subject
to the condition that the lead
insurer pays the central tax, the
State tax, the Union territory tax
Co-insurance premium apportionment
and the integrated tax on the entire
The apportionment of co-insurance premium by the lead
amount of premium paid by the
insurer to the co-insurer is now an exempt activity, subject
insured.
to the lead insurer paying the applicable taxes.
Schedule
22. Para 10
III Re-insurance commission
The services provided by an insurer to a reinsurer, where
Services by insurer to the reinsurer
the reinsurance commission is deducted from the
for which ceding commission or the
reinsurance premium, are now exempt, subject to the
reinsurance commission is
reinsurer paying the applicable taxes.
deducted from reinsurance
premium paid by the insurer to the
reinsurer, subject to the condition
that the central tax, the State tax,
the Union territory tax and the
integrated tax is paid by the
reinsurer on the gross reinsurance
premium payable by the insurer to
the reinsurer,
inclusive of the said ceding
commission or the reinsurance
commission.
Refund of Input Tax Credit
No refund shall be made for the tax paid or input tax credit
No refund shall be made of all the
reversed, which would not have been paid or reversed if
tax paid or the input tax credit
the amendments had been in force earlier.
Clause reversed, which would not have
23.
114 been so paid, or not reversed had
Effective immediately
the said clause 114 been in force at
This provision applies retrospectively, from the time the
all material times.
relevant sections of the Central Goods and Services Tax
Act came into effect.

R.K. KALRA & COMPANY

Chartered Accountants
 Amendments in the IGST Act, 2017

S.No. Section Amendment Analysis

1. 5 Sub-section (1) in Section 5 in the IGST The Integrated Goods and Services Tax (IGST)
Act is being amended, so as to not levy Act, 2017 has been amended not to include the
integrated tax on Extra Neutral Alcohol taxation of un-denatured extra neutral alcohol or
used for manufacture of alcoholic liquor rectified spirit used spirit used for the
for human consumption. manufacture of alcoholic liquor for human
consumption. This change aims to streamline
streamline the taxation of these products and
ensure consistent application of the IGST across
the country.

2. 6A Section 6A is being inserted in the IGST Prevalent practice

Act, so as to empower the Government to If the government is satisfied that a certain
regularize non-levy or short levy of practice regarding the levy (or non-levy) of IGST
integrated tax where it is found that such was generally prevalent, it may choose not to
non-levy or short levy was a result of recover the IGST that was not levied or was short-
general practice. levied as per that practice.

Notification by Government
The government can, on the recommendation of
the GST Council, issue Council, issue a
notification to direct that the IGST payable on such
supplies shall not be required to be paid.

Ensuring Fairness
This provision allows the government to address
situations where IGST was not levied due to a
generally prevalent practice, ensuring a fair and
consistent application of the tax.

3. 16 Claim refund
Suppliers of goods or services on which IGST has
been paid can claim a refund of the tax paid, in
accordance with the provisions of the Central
Goods and Services Tax Act and its rules.

Zero-rated supplies
The refund can be claimed for IGST paid on zero-
rated supplies, which include exports and supplies
to SEZs. The supplier may pay IGST and then
claim the refund.

No refund on export duty

However, no refund of unutilized input tax credit or
IGST paid on zero-rated supplies of goods shall
be allowed where such goods are subject to export
duty.
4. 20 Section 20 in the IGST Act is being Maximum Appeal Amount
amended, so as to reduce the maximum The maximum amount payable for each appeal
amount of pre-deposit payable for filing filed before the Appellate Authority or the
appeal before appellate authority from Appellate Tribunal has been set at 40 crore
rupees fifty crores to rupees forty crores rupees.
of integrated tax. Further, it proposes to
reduce the maximum amount payable as
pre-deposit for filing appeal before the
Appellate Tribunal from rupees

R.K. KALRA & COMPANY

Chartered Accountants
S.No. Section Amendment Analysis
hundred crores to rupees forty crores of Ensuring Reasonable Limits
integrated tax. This provision aims to establish reasonable limits
on the financial burden of appeals, promoting a
more efficient and accessible appeals process.

Promoting fairness
By capping the maximum appeal amount, the
government seeks to ensure that the appeals
process remains accessible and does not pose an
undue financial burden on taxpayers.

Amendments in the UTGST Act, 2017

 ENA used in the manufacture of alcoholic liquor for human consumption is now exempt from
UTGST.

 Section 8A in the UTGST Act is being inserted, so as to empower the Government to

regularize non –levy or short levy of union territory tax where it is found that such non-levy or
short levy was a result of general practice.

Amendments in the GST (Compensation to States) Act, 2017

Section 8A is being inserted in the GST (Compensation to States) Act, so as to empower the
Government to regularize non –levy or short levy of cess where it is found that such non-levy or short
levy was a result of general practice.

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Chartered Accountants
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