The Government has notified The Finance Act (No.2), 2024 on 16th August, 2024, to give effect to the financial proposals of the Central Government for the financial year 2024-2025. However, the amendments related to GST law would come in force from a appointed date, through Notification.
The Finance Bill (No.2), 2024 was passed in Lok Sabha on 07th August, 2024. The same received the assent of the President on 16th August, 2024.
The key highlights of the changes under GST Law are regarding:
A. Changes proposed in Show Cause Notices and Appeals
- Amendment in Section 73 and 74 of the CGST Act, 2017 – To provide that the different time limit for issuance of demand notices and orders pertains to period upto Financial year 2023-24.
- Insertion of New Section 74A in the CGST Act, to provide for the common time limit for issuance of demand notices and orders irrespective of whether case involves fraud, suppression, willful misstatement etc., or not, for period pertaining to Financial year 2024-25 onwards.
Section 74A is proposed to be inserted which will have effect for cases from FY 2024-25 onwards, meaning thereby, for the demands pertaining to period 01 July 2017 to 31 March 2024, old provisions will operate and department has the option to issue SCN under Section 73 or Section 74 depending upon the facts of the case. However, for the demands pertaining to period 01 April 2024 onwards, every SCN has to be issued mandatorily under Section 74A only. - Amendment in Section 107 of the CGST Act, 2017 and Section 20 of the IGST Act – For reducing the amount of pre-deposit required to be paid for filing of appeal under GST.
- Amendment in Section 112 of the CGST Act, 2017 – Time for filing appeals in GST Appellate Tribunal, to allow 3 months period for filing appeals before GSTAT to start from a date to be notified by the Government in respect of appeals/ revision orders passed. This would have effect from 01.08.2024.
Also, reducing the amount of pre-deposit required to be paid for filing the GSTAT appeals.
B. Waiver of interest & penalty for the FY 2017-18, 2018- 19 & 2019-20: For waiving interest and penalty for demand notices issued u/s 73, who pays full tax upto 31.03.2025.
C. Changes proposed in relation to Input Tax Credit (ITC):
- Relaxation in conditions of section 16 of the CGST Act, 2017 w.e.f. 01.07.2017: Extending the deadline for claiming ITC for invoices or debit notes u/s 16(4) of the CGST Act, to 30th November, 2021 for financial years 2017-18, 2018-19, 2019-20 and 2020-21. This extension applies to return filed in FORM GSTR-3B.
- Availment of ITC in case of revocation of cancellation of GST registration: This Amendment conditionally relaxes for cases where returns from the date of registration cancellation to revocation are filled within 30 days of the revocation order.
D. Amendment in Refund provisions: To restrict IGST refunds for goods subject to export duty, including those exported or supplied to SEZs, regardless of with or without payment of tax.
E. Time of Supply in case of Reverse Charge Mechanism (RCM) (Section 13(3)): To specify the time of supply of services where the self-invoice has to be issued by the recipient of services liable to pay GST under Reverse Charge Mechanism (RCM).
F. Amendments in Schedule III: Co-insurance premium apportioned by lead insurer to the co-insurer for the supply of insurance service by lead and co-insurer to the insured in coinsurance agreements and transactions of ceding commission/ re-insurance commission between insurer and re-insurer.
G. Amendment in Section 122 of the CGST Act : Relating to Penalty provisions on E-commerce operators
H. Insertion of Section 11A: To empower the government to regularize past discrepancies in tax practices by issuing a notification, ensuring that businesses are not unduly penalized for following a generally accepted but incorrect tax practice.
I. Amendment in Section 140 of the CGST Act – To allow transitional credit for service invoices received by the IGST before the appointed date. Amendment would have an retrospective effect from 01.07.2017.
J. Amendment in Section 171 of the CGST Act – To introduce a sunset clause for Anti-Profiteering measures and align these cases to the GSTAT (GST Tribunal).
K. Amendment in Section 9 of the CGST Act 2017 – To exclude undenatured extra neutral alcohol or rectified spirit used for manufacture of alcoholic liquor, for human consumption from purview of GST.
L, Amendment in Section 39 of the CGST Act, 2017 – To provide registered persons required to deduct tax u/s 51 must file return in FORM GSTR-7 monthly, even if no tax has been deducted.
The Finance Act (No.2) Act, 2024 can be accessed at https://taxo.online/wp-content/uploads/2024/08/The-Finance-No.2-Act-2024.pdf