Top 10 Changes in GST which are beneficial for taxpayers w.e.f. 1st Oct 2023

1. Changes in Schedule III of the CGST Act, 2017

An explanation has been inserted vide the FA, 2023, w.e.f. 1-10-2023. It states that Para 7 and 8 of Schedule III and the Explanation 2 thereof shall be deemed to have been inserted therein w.e.f. 1-7-2017. However, no refund shall be made of all the tax which has been collected, but which would not have been so collected, had this explanation been in force at all material times.

These two paras i.e. para 7 and para 8 were inserted in the Schedule III w.e.f. 1-2-2019.

The clarification inserted vide the FA, 2023, that these paragraphs are deemed to be inserted w.e.f. 1-7-2017 is to put to rest demand raised by the department for period from 1-7-2017 to 1-2-2019.

Although a welcome clarification for most but the taxpayers who paid the tax will not be refunded that amount. So, to that extent it is anadverse change.

2. Changes in Composition Levy (Sec 10)

The government has deleted the word 'goods' from Sec 10(2)(d) and Sec 10(2A)(c). Through this change government has sought to allow dealers/traders of goods to supply through E-commerce Operators and opt for composition levy. This is a welcome change as many small dealers want to operate through Flipkart/Amazon and cannot comply with the extensive GST lawsbut will now be allowed to trade through these websites by enrolling as composition dealer. However, these traders are not allowed to make inter-state supply of goods.

3. Exemption from obtaining registration to persons supplying goods through Electronic Commerce Operator (ECO)

The Notification No. 34/2023-CT dated 31-7-2023, has been issued which specifies that the persons making supplies of goodsthrough an ECO, who is required to collect TCS under section 52 of the said Act, as the category of persons exempted from obtaining registration under the said Act.

Basic Condition to be fulfilled by supplier of goods through ECO claiming such exemptionis that it should be having an aggregate turnover in the preceding FY and in the current FY not exceeding the amount of aggregate turnover above which a supplier is liable to be registered in the State or UT in accordance with the provisions of section 22(1) of the said Act.

More conditions are also to be fulfilled by the supplier of goods through ECO which has been specified in the notification. One of the conditions is that such persons shall notmake any inter-State supply of goods.

Further, special procedure is to be followed by the ECO in respect of supplies of goods through them by composition taxpayers and unregistered persons which are detailed in NN 36/2023-CT dated 4-8-2023 and NN 37/2023-CT dated 4-8-2023, respectively.

In order that the conditions for supplying goods through ECO by unregistered persons and composition dealers are complied with strictly, the government has introduced Sec 122(1B) of the CGST Act, 2017, whereby following penalties will be levied against ECO in case of non-compliance.

Sec 122(1B) - Any electronic commerce operator who—

1. allows a supply of goods or services or both through it by an unregistered person other than a person exempted from registration by a notification issued under this Act to make such supply;
2. allows an inter-State supply of goods or services or both through it by a person who is not eligible to make such inter-State supply; or
3. fails to furnish the correct details in the statement to be furnished under sub-section (4) of section 52 of any outward supply of goods effected through it by a person exempted from obtaining registration under this Act,

shall be liable to pay a penalty of ₹ 10,000, or an amount equivalent to the amount of tax involved had such supply been made by a registered person other than a person paying tax under section 10, whichever is higher.

4. Sec 23 made over-riding section

In Sec 23(2) now begins with "Notwithstanding anything to the contrary contained in sub-section (1) of section 22 or section 24", thus making Sec 23 over-riding section over section 22 or section 24.

Meaning thus that if a person is liable to be registered compulsorily under Sec 24 as he is making, say inter-state supply or inward supply on which reverse charge mechanism is applicable, but the entire service or goods that he is supplying is exempt from tax, then he will not be liable to be registered.

5. Revocation of cancellation of registration 

Period for filing an application for revocation of cancellation of registration has been extended from 30 days to 90 days from the date of the service of order of cancellation of registration.

Further, it has been stated that such period may, on sufficient cause being shown, and for reasons to be recorded in writing, be extended by the Commissioner or an officer authorised by him in this behalf, not below the rank of Additional Commissioner or Joint Commissioner, as the case may be, for a further period not exceeding 180 days. As against this, earlier extension was granted for a further period of 30 days on approval of Additional Commissioner or Joint Commissioner and further 30 days on approval of Commissioner.

6. Assessment of Non-filers of Returns (Sec 62 of CGST Act read with Rule 100(1) of the CGST Rules)

Earlier only 30 days were granted after assessment order to file valid return for deemed withdrawal of assessment order, now 60 days are being granted. Further this period can be further extended by 60 days on payment of additional fees of Rs. 100 for each day beyond 60 days from service of such assessment order.

7. Decriminalisation of Certain offences

Sec 132(1)(g), (j) and (k) have been omitted vide the FA, 2023, w.e.f. 1-10-2023. Offences listed in it are as follows –

(g) obstructs or prevents any officer in the discharge of his duties under this Act;

(j) tampers with or destroys any material evidence or documents;

(k) fails to supply any information which he is required to supply under this Act or the rules made thereunder or (unless with a reasonable belief, the burden of proving which shall be upon him, that the information supplied by him is true, supplies false information;

8. Monetary limit of criminal offence increased

The government has increased the monetary limit beyond which an offence will become a criminal offence i.e. offence punishable with imprisonment. If the tax amount involved in the offence is beyond Rs. 2 crores, then only an offence will become a criminal offence. This limit was Rs. 1 crore earlier. Only one thing to note is that limit is still Rs. 1 crore for offence of taking input tax credit of fake invoice.

9. Compounding of offence

There will be no Compounding of offences in case of person accused of taking input tax credit of Fake/bogus invoice. However, there is a reduction in maximum and minimum amount payable for compounding of offences –

10. Consent based sharing of information furnished by taxable person

 Insertion of Section 158A for allowing sharing of information or details furnished by a taxable person on the GST common portal with such other systems as may be notified by government.

The government has issued a notification no. 33/2023-CT, dated 31-7-2023, w.e.f. 1-10-2023, whereby "Account Aggregator" has been notified as the systems with which information may be shared by the common portal based on consent under Sec 158A of the CGST Act, 2017.

Explanation: For the purpose of this notification, "Account Aggregator" means a non-financial banking company (NBFC) which undertakes the business of an Account Aggregator in accordance with the policy directions issued by the Reserve Bank of India(RBI) under section 45JA of the RBU Act, 1934 and defined as such in the Non-Banking Financial Company -Account Aggregator (Reserve Bank) Directions, 2016.

This is beneficial amendment as otherwise these account aggregators have to take this information through government department which is a long-procedure.