As we all know, GST related decisions are first discussed in GST Council meetings from time to time. Based on decisions, we have seen frequent amendments and clarifications vide Notifications and Circulars. Therefore, as expected, there are very few amendments proposed in this budget presented on 1^st February 2023 for the financial year 2023-24. Important proposed amendments are discussed below:

• Section 10 amended to allow composition dealers to sale goods through Electronic Commerce Operators

• Where the payment has not been made to the supplier within 180 days then at present, the assessee is required to add ITC reversal amount to the output tax liability. Now, Section 16 has been amended to provide reversal of ITC without adding to output liability. This is in line with the clarification issued by the CBIC with respect to change in the ITC presentation in Table No. 4 of GSTR-3B wherein ITC reversal is required to be reported where payment is not made within 180 days. In other words, assessee will be required to reverse ITC (with interest if required) and report in GSTR-3B under “Other Reversal”.

• Goods or services received for mandatory CSR activities are not eligible for ITC. Specific entry has been inserted in section 17(5). This will make CSR activities costlier.

• Retrospective amendment has been made to provide that Section 23 shall prevail over Section 22 and Section 24. In other words, wholly exempt suppliers need not obtain GST registration when there is only RCM liability.

• GSTR-1 cannot be filed after 3 years from its due date.

• GSTR-3B cannot be filed after 3 years from its due date.

• GSTR-9 cannot be filed after 3 years from its due date.

• GSTR-8 (TCS return) cannot be filed after 3 years from its due date.

• Section 54 has been amended to provide that 90% provisional refund may be given without reducing the amount of ITC provisionally accepted. Now, anyway Rule 36(4) has been amended to restrict ITC only to the extend it is reflected in GSTR-2B. So practically speaking this amendment will not have any impact while sanctioning of refund for the period from January 2022 onwards.

• Electronic Commerce Operator shall be liable for penalty for allowing certain transactions through it. Penalty shall be Rs. 10,000/- or tax amount, whichever is higher

• Certain offences are removed from punishment of imprisonment and fine. These offences are:
  • obstructs or prevents any officer in the discharge of his duties under this Act
  • tampers with or destroys any material evidence or documents
  • fails to supply any information which he is required to supply under this Act or supplies false information

• Retrospective exemption to below transactions in Schedule III of the Act.
  • supply of goods from one country to another country without bringing such goods in India; and
  • High Seas Sale.
  • However, refund will not be allowed if tax already paid.

• As per Section 12(8) of the IGST Act, where the transportation of goods is to a place outside India, the place of supply shall be the place of destination of such goods. In other words, in case of transportation service in case of export of goods, place of supply of goods is outside India and therefore, such transporters are charging IGST by mentioning place of supply as “other territory”. Accordingly, GSTR-2A / 2B shows ITC not eligible. The CBIC very recently clarified this issue and allowed the ITC. However, in order to remove confusion, this provision has been omitted. As a result, place of supply in case of transportation service for export of goods shall be the office / factory location of the assessee and accordingly, assessee can avail ITC.