Budget 2024- know the Major GST Reforms, Addition /Alteration/ Amendments in clauses of GST.   

Discover the latest GST reforms and amendments that impact businesses. Get expert insights from top GST consultants on navigating the changing landscape.

• Un-denatured Extra Neutral Alcohol used in the manufacture of alcoholic liquor for human consumption to be kept out of the purview of GST. (Sec 9 of the CGST Act, Sec 5 of the IGST Act and Sec 7 of the UTGST Act are amended).

• Section 74A is introduced to determine tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilized for any reason pertaining to the Financial Year 2024-25 onwards. 
  • As per the new Section 74A, if any tax is unpaid, underpaid, erroneously refunded, or if the input tax credit is wrongly availed or utilised, the proper officer will serve a notice to the responsible person to explain why they should not pay the due amount with interest and penalty. However, no notice will be issued if the amount in question for a financial year is less than Rs. 1,000.
  • The notice must be issued within 42 months from the due date of the annual return or erroneous refund date.
  • It also provides for the same limitation period for issuing demand notices and orders in respect of demands from the financial year 2024-25 onwards.
  • The time limit for the taxpayers to avail the benefit of reduced penalties under this Section, by paying the tax demanded along with interest, is being increased from 30 days to 60 days.
  • Sections 10(5), 35(6), 39(3), 49(8), 50(1), 51(7), 61(3), 62(1), 63, 64(2), 65(7), 66(6), 104(1), 107(11), and 127 provides reference to this section.

• Section 11A is being inserted to empower the government to regularise non-levy or short levy of central tax due to any general practice prevalent in trade.
• Section 13(3) is amended for the time of supply in case the invoice is issued by the recipient of supply to be the date of invoice.
• Sub-section (5) is inserted in Section 16 retrospectively from 1st July 2017 to allow ITC claims on invoices or debit notes for the FY 2017-18, 2018-19, 2019-20 and 2020-21 in the GSTR-3B filed up to 30th November 2021. Furthermore, sub-section (6) is inserted in Section 16 retrospectively from 1st July 2017 to allow ITC claims on invoices and debit notes in GSTR-3B filed for the period from the GST registration cancellation date or the effective date, as the case may be, till the date of revocation order for GST registration cancellation, provided it is filed within thirty days of the date of the revocation order of cancellation of registration. However, the time limit for ITC claims for such documents must not have expired under Section 16(4) as on the date of the cancellation order. In case the tax is paid or ITC is reversed, no refund can be admitted.
• A new item is added under the blocked credits under Section 17(5). ITC is not allowed on taxes paid under Section 74 for demands up to FY 2023-24, removing references to Sections 129 and 130 of the CGST Act.
• A new proviso in sub-section (2) of section 30 of the CGST Act is being inserted, adding conditions and restrictions for revocation of GST registration cancellation, which will be prescribed in the CGST Rules at a later date.
• Section 31(3)(f) is amended to provide a time limit to issue invoices by the recipient for RCM supplies. It will include suppliers registered solely for TDS under GST.
• GSTR-7 for TDS under GST shall be filed whether or not TDS is deducted during a month under Section 39(3).
• Section 54(15) provides that GST refund of unutilised ITC or IGST will not be allowed for the zero-rated supply of goods subject to export duty.
• A summoned person can authorise another person to appear on their behalf in compliance with GST summons issued by the GST officer under the new Section 70(1A).
• New Sections 73(12) and 74(12) restrict the applicability of demand and recovery provisions for determining tax demands for FY up to 2023-24.
• Under the new Section 74A, the penalty shall be redetermined in a notice where it is proven that it is no longer a case of fraud, wilful misstatement, or suppression of facts.
• Under Section 107 of the CGST Act, the maximum pre-deposit for filing appeals before the appellate authority is reduced from Rs.25 crores to Rs.20 crores. Similarly, under the IGST Act, Section 20 has been amended to reduce the pre-deposit amount from Rs.50 crore to Rs.40 crore.
• The government can notify the types of cases for hearing by the Principal Bench of the Appellate Tribunal by amending Section 109.
• In Section 112,
  • Effective 1st August 2024, the deadline for filing an appeal to the Appellate Tribunal by taxpayers will be the later of either the date of order communication or a date notified by the government based on Council recommendations.
  • The same change applies to commissioners/GST officers filing applications before the Appellate Tribunal.
  • Applications may be filed within three months after the standard appeal period expires.
  • The pre-deposit requirement for appeals is reduced from 20% to 10% of the disputed amount.
  • The maximum amount required for pre-deposit is lowered from Rs.50 crore to Rs.20 crore.
• Penalty under Section 122(1B) is amended to restrict this to cases involving the e-commerce operators subjected to TCS under GST retrospectively from 1st October 2023.
• Conditional waiver of interest and penalty is given through Section 128A for demand notices under Section 73 for all FY from 2017-18 to 2019-20 except for erroneous refunds and where interest/penalty is already paid for the said years.
• Transitional credit for the CENVAT credit for input services by an ISD is allowed under Section 140 retrospectively.
• The appellate authority replaces the anti-profiteering authority from the date to be notified for accepting applications for cases of anti-profiteering under Section 171.
• New items through Paras 8 and 9 are inserted under Schedule III to declare the following as neither supply of goods nor supply of services-
  • The 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, provided the lead insurer pays the tax liability on the entire amount of premium paid by the insured. 
  • The services by the insurer to the reinsurer, for which the ceding commission or the reinsurance commission is deducted from the reinsurance premium paid by the insurer to the reinsurer.
• Section 146 states that no refund shall be made of the tax paid or the input tax credit reversed, which would not have been so paid, or not reversed had the said clause 114 been in force at all material times.

Stay ahead of the curve on GST reforms in budget 2024.. This comprehensive guide covers the latest amendments, with advice from seasoned GST consultants on adapting your processes