Budget changes in GST-Finance Act, 2024 extract dated 16.08.2024-Part 2!

To give effect to the financial proposals in Budget 2024 of the Central Government for the financial year 2024-25, THE FINANCE (No. 2) ACT, 2024 is published by the Government on 16^th August 2024. 

We have covered these changes in 3 parts. To read Part I, click here.

Let’s discuss some other changes in Part II!

Amendment to section 30

Section 30 of the CGST Act, 2017 deals with the Revocation of cancellation of registration. As per its subsection 2, the proper officer may, in such manner and within such period as may be prescribed, by order, either revoke cancellation of the registration or reject the application, provided that the application for revocation of cancellation of registration shall not be rejected unless the applicant has been given an opportunity of being heard. Now, a new proviso is inserted. The amended wordings of the section are as follows:

“(2) The proper officer may, in such manner and within such period as may be prescribed, by order, either revoke cancellation of the registration or reject the application:

Provided that the application for revocation of cancellation of registration shall not be rejected unless the applicant has been allowed to be heard.

Provided further that such revocation of cancellation of registration shall be subject to such conditions and restrictions, as may be prescribed.”

This amendment aims at enabling the government to prescribe conditions and restrictions for revocation of cancellation of registration.

Amendment to section 31

Section 31 of the CGST Act, 2017 deals with provisions related to Tax invoices. It covers provisions relating to time limits to issue tax invoices. It’s Sub-section 3 states requirements and time limits for tax invoices under various circumstances. There are 2 amendments in this sub-section as follows:

• In sub-clause (f) of it, “within the period as may be prescribed” wordings are added as follows:

“(f) a registered person who is liable to pay tax under sub-section (3) or sub-section (4) of section 9 shall, within the period as may be prescribed, issue an invoice in respect of goods or services or both received by him from the supplier who is not registered on the date of receipt of goods or services or both.”

This amendment aims at setting up a time limit for the issuance of tax invoices in RCM case of unregistered persons.

• An explanation is added in sub-section 3 of section 31 as follows:

“Explanation--For clause (f), the expression "supplier who is not registered" shall include the supplier who is registered solely for deduction of tax under section 51.”

This explanation clarifies that unregistered persons include persons registered for TDS under GST and self-invoicing rules will apply as if these persons are not registered.

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Amendment of section 39

Section 39 of the CGST Act, 2017 deals with furnishing of returns. It’s sub-section 3 covers provisions related to filing of GSTR 7 by the persons liable to deduct TDS u/s 51 of the CGST Act. This sub-section was earlier read as follows:

"(3) Every registered person required to deduct tax at source under the provisions of section 51 shall furnish, in such form and manner as may be prescribed, a return, electronically, for the month in which such deductions have been made within ten days after the end of such month."

Now, its amended wordings are as follows:

“(3) Every registered person required to deduct tax at source under section 51 shall electronically furnish a return for every calendar month of the deductions made during the month in such form and manner and within such time as may be prescribed:

Provided that the said registered person shall furnish a return for every calendar month whether or not any deductions have been made during the said month.”

This amendment clarifies that GSTR 7 is to be filed by the deductors even if there are no deductions during the month. It also provides for an enabling clause for prescribing the time limit for filing such returns.

Amendment of section 54

Section 54 of the CGST Act, 2017 deals with a Refund of tax. The amendment is made to prohibit refund of unutilized input tax credit or integrated tax on zero-rated supply of goods, which are subjected to export duty. New sub-section 15 is added to this effect as follows:

“(15) Notwithstanding anything contained in this section, no refund of the unutilized input tax credit on account of zero-rated supply of goods or of integrated tax paid on account of zero-rated supply of goods shall be allowed where such zero-rated supply of goods is subjected to export duty.”

Amendment to section 70

Section 70 of the CGST Act, 2017 deals with the power to summon persons to give evidence and produce documents.  New sub-section 1A is added to it as follows:

“(1A) All persons summoned under sub-section (1) shall be bound to attend, either in person or by an authorized representative, as such officer may direct, and the person so appearing shall state the truth during an examination or make statements or produce such documents and other things as may be required.”.

Amendment of section 107

Section 107 of the CGST Act, 2017 deals with Appeals to Appellate Authority. As per its sub-section 6, the appellant has to pay the full amount of admitted tax, interest, and penalties as well as 10% of the disputed amount for filing the appeal. 

10% of the disputed amount was earlier restricted to 25 Crore rupees. Now, this restriction is lowered down to 20 Crore rupees. The amended sub-section 6 is as follows:

“(6) No appeal shall be filed under sub-section (1), unless the appellant has paid-

(a) In full, such part of the amount of tax, interest, fine, fee, and penalty arising from the impugned order, as is admitted by him; and

(b) A sum equal to ten percent. of the remaining amount of tax in dispute arising from the said order, subject to a maximum of twenty crore rupees, in relation to which the appeal has been filed.

Provided that no appeal shall be filed against an order under sub-section (3) of section 129, unless a sum equal to twenty-five percent. of the penalty has been paid by the appellant.”

Conclusion

The amendments introduced in the Finance Act, 2024, significantly impact the GST landscape, enhancing clarity, compliance, and governance within the framework. These changes reflect the government's ongoing commitment to refining the GST regime, addressing operational challenges, and aligning it with evolving business practices. From the revocation of registration cancellations to the setting of time limits for tax invoices and the adjustment of appeal provisions, these updates aim to streamline processes and provide greater certainty to taxpayers.

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