RECENT DEVELOPMENTS IN GST (2024)

The Budget session of Parliament shall commence from July, 22 to 12 August, 2024. Economic survey is likely to be presented on 22 July, 2024 itself and Budget including Finance Bill shall be presented on July, 2023. Union Finance Minister, Mrs. Nirmala Sitharaman shall be presenting her 7^th Budget in a row.

The round of meetings with various stakeholders is over including the PM’s meet with economists concerning the Indian economy. The suggestions from economists include inter alia, focusing on developing global value chains, increased allocation for R & D in agriculture, direct cash transfers an alternative to subsidies, rural sector growth, fiscal defect control, education reforms, tax reforms etc. Target should be to achieve goal of ‘Developed India’ by 2047. Niti Aayog shall be preparing a vision document for India to become Developed India. The economists also suggested the need for a careful balance between fiscal consolidation and promoting economic growth.

The forthcoming Union Budget may be seen as a long term economic policy document of the Government, apart from usual budget announcements, schemes, projections and allocations. It may also look like a blue print of India @ 2047, a 100 year old independent India. MSME credit, inflation control, job creation, labour reforms, focus on domestic industries and exports, energy, infrastructure.....could be some of the focus areas. Start ups, digital economy and fiscal and tax reforms would be other priorities of the Government.

It is expected that Modi 3.0 government shall continue with its broad existing policy framework along with few measures for Bihar, Andhra Pradesh and Other schemes besides facilitating manufacturing, consumption and fiscal consolidation.

Finance Ministry celebrated the 7 years of GST in India on 1^st July, 2024. It stated that with reduced tax rates on household goods after GST implementation, GST has brought happiness and relief to every home through lower GST on household appliances and mobile phones. The GST taxpayer base increased to 1.46 crore in April, 2024 from 1.05 crore in April, 2018. There is improved compliance. GST has also reduced the compliance burden for the small taxpayers by waiving off of annual return filing requirements with aggregate turnover of upto Rs. 2 crore for FY 2023-24.

CBIC is in the process of implementing the decision of CGST Council’s 53rd meeting held on 22 June, 2024. CGST rules have been amended and new Notifications / Circulars issued on 10.07.2024. Form GSTR 3B is amended besides amending rate of tax on corporate guarantee, TCS rate etc.

GST collection in India has grown in June, 2024 too but at a slower pace, growth being in single digit only on YoY basis (7.7%). Collection growth was 12.4% and 10% in April, 2024 and May, 2024 respectively. While the MoF has decided to discontinue with official release of monthly GST collection, as per media reports, for the reasons not known, the MoF has been releasing the GST data on first of every month since last seven years (74 months) and such a decision coincides with 7^th anniversary of GST in India. The gross GST collection for June, 2024 is reported to be Rs. 1.74 lakh crore. The GST taxpayer base has increased to 1.46 crore in April, 2024 against 1.05 crore in April, 2018.

Amendments in CGST Rules

• CBIC has amended CGST Rules, 2017 to implement some of the recommendations of CGST Council 53rd meeting held on 22.06.2024.
• Rules amended / substituted –

8(4A), 21, 21A, 28 (w.e.f. 26.10.2023), 36, 37A, 39 (to be date notified), 40, 48, 59 (w.e.f. 01.08.2024), 60, 62, 78, 88B, 88C, 89, 95, 96, 96A, 110, 111, 113A, 142, 163

• Forms Amended –

Form GSTR-1A (Amendment of outward supplier of goods or services for current tax period) and

Form ENR 03 (Application for enrolment for unregistered person).

(Source: Notification No. 12/2024-Central Tax dated 10.07.2024)

Aadhar based Authentication for Registration

• According to rule 8(4A) of CGST Rules, 2017, authentication of Aadhar number was required
• As per Notification No. 27/2022-CT dated 26.12.2022, the provisions of Rule 8(4A) were notified to be not applicable to all the States and Union Territories except the State of Gujarat.
• It has now been notified that Notification No. 27/2022-CT stands rescinded w.e.f. 10.07.2024.
• Therefore, Rule 8(4A) has become applicable throughout the territory of India.

(Source: Notification No. 13/2024-Central Tax dated 10.07.2024)

Exemption from filing annual return for FY 2023-24

• Section 44 of the CGST Act, 2017 provides for furnishing annual return for every financial year other than for certain specified categories.
• CBIC has notified the exemption to registered persons whose aggregate turnover in the financial year 2023-24, is upto Rs. 2 crores, from filing annual return for the said financial year 2023-24.
• Thus, registered persons with more than Rs. 2 crore turnover only will be required to file annual return.

(Source: Notification No. 14/2024-Central Tax dated 10.07.2024)

Reduction in rate of TCS by e-commerce operators

• According to section 52(1) of CGST Act, 2017, every electronic commerce operator, not being an agent, shall collect an amount calculated at such rate not exceeding one per cent., as may be notified by the Government on the recommendations of the Council, of the net value of taxable supplies made through it by other suppliers where the consideration with respect to such supplies is to be collected by the operator.
• CBIC had notified that every electronic commerce operator, not being an agent, shall collect an amount calculated at a rate of 0.25 per cent. of the net value of intra-State taxable supplies made through it by other suppliers where the consideration with respect to such supplies is to be collected by the said operator vide Notification No. 52/2018-CT dated 20.09.2018.
• CBIC has now reduced the rate of TCS from 0.5% to 0.25% w.e.f. 10.07.2024.
• Similar changes have also been made in TCS rate under IGST Act, 2017 and UTGST Act, 2017.

(Source: Notification No. 15/2024-Central Tax dated 10.07.2024)

GST Rates of Goods

• CBIC has amended Notification No. 1/2017-CT (Rate) dated 28.06.2017 to prescribe / amend rate of GST on the certain goods.
• In Schedule-II (6%) following goods have been added:

• In Schedule-III (9%) goods have been added / substituted / amended in Entry Nos. 153A, 224, 273, 273A, and 378
• The supply of agricultural farm produce in package(s) of commodities containing quantity of more than 25 kilogram or 25 litre shall not be considered as a supply made within the scope of expression ‘pre-packaged and labelled’
• This shall come into force w.e.f. 15 July, 2024

(Source: Notification No. 02/2024-Central Tax (Rate) dated 12.07.2024)

Supply of pre-packaged and labeled goods

• CBIC has amended Notification No. 2/2017-CT (Rate) dated 28.06.2017 which provides for exemption to intra-state supply of goods.
• Accordingly, in the definition of ‘registered brand name’ a proviso has been inserted to provide that the supply of agricultural farm produce in package(s) of commodities containing quantity of more than 25 kilogram or 25 litre shall not be considered as a supply made within the scope of expression ‘pre-packaged and labelled’.
• This shall be effective w.e.f. 15 July, 2024.

(Source: Notification No. 03/2024-Central Tax (Rate) dated 12.07.2024)

Exemption to Services

• CBIC has amended Notification No. 12/2017-CT (Rate) dated 28.06.2017 which provides for exemption to intra state supply of services.
• The exception provided are as follows:

• Services provided by Ministry of Railways (Indian Railways) to individuals by way of –

(a) sale of platform tickets;

(b) facility of retiring rooms/waiting rooms;

(c) cloak room services;

(d) battery operated car services.

• Services provided by one zone/division under Ministry of Railways (Indian Railways) to another zone(s)/division(s) under Ministry of Railways (Indian Railways).
• Services provided by Special Purpose Vehicles (SPVs) to Ministry of Railways (Indian Railways) by way of allowing Ministry of Railways (Indian Railways) to use the infrastructure built and owned by them during the concession period against consideration and services of maintenance supplied by Ministry of Railways (Indian Railways) to SPVs in relation to the said infrastructure built and owned by the SPVs during the concession period against consideration.

• Under heading No. 9972, it is mentioned that exemption will not apply to:

1. accommodation services for students in student residences;
2. accommodation services provided by Hostels, Camps, Paying Guest accommodations and the like.

• Exemption under entry No. 9963 to supply of accommodation services having value of supply less than or equal to twenty thousand rupees per person per month provided that the accommodation service is supplied for a minimum continuous period of ninety days.
• This shall come into force w.e.f. 15.07.2024.

(Source: Notification No. 04/2024-Central Tax (Rate) dated 12.07.2024)

CBIC Circular Nos. 223 to 229 issued between 10.07.2024 and 17.07.2024

Address related fields in GST Registration

• GSTN has enhanced address related functionalities in GST registration based on feedback and analysis of tickets.
• These relate to new Registration, Amendment Application (Core & Non-Core), and Geocoding Business Addresses.
• These changes are applicable to normal taxpayers – Regular, SEZ Unit, SEZ Developer, Composition, Input Service Distributer and Casual Taxpayers.
• The field of locality/sub locality is not mandatory now and to continue with the registration, taxpayer scan click "YES" to proceed, and the system will allow you to move forward.
• For details, taxpayers can refer to be GSTN Portal / Advisory.

(Source: GSTN Advisory dated 04.07.2024)

Documents upload for new GST Registration

• GSTN has issued an advisory on certain trade facilitation measures for increase in size of documents upload in relation to ‘Principal Place of Business and Additional Place of Business’ for New Registration and Amendment therein.
• Changes have been made in size of document upload in Principal Place of Business and Additional Place of Business for New Registration and Amendment in response to the grievances received.
• Accordingly, taxpayer can now upload following documents up to maximum size of 500 kb in the Principal Place of Business tab and Additional Places of Business tab.

• The changes are mentioned in the following table:

(Source: GSTN Advisory dated 09.07.2024)

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