Introduction
The Finance Act of 2023, which went into effect on October 1, 2023, made significant revisions to the Goods and Services Tax (GST). These modifications are intended to modify the tax environment for online gaming, as well as the Input Tax Credit (ITC) and the composition system. In this blog, we will explain some of the most recent GST developments or news in an easy-to-understand format.
What are the most recent amendments to the Goods and Services Tax (GST) Act?
The following are recent GST legislation amendments that will take effect on October 1, 2023:
1. The composition method is extended to e-commerce businesses
Previously, registered people who supplied items through an E-Commerce Operator (ECO) were not eligible for the Composition Scheme's GST advantages, which have now been extended to them. However, individuals that offer services on e-commerce platforms have some limitations.
2. Supplier payment within 180 days
According to the most recent GST adjustments or revisions in the payment by suppliers, if someone receives a bill for goods or services and does not pay the provider within 180 days, they must return the tax credit they obtained. In addition, they must pay interest in accordance with Section 50 of the CGST Act.
3. Time extension for revocation of cancelled registration
The government has extended the deadline for filing an application for revocation of a cancelled GST registration from 30 to 90 days from the date of the cancellation order. Furthermore, if there are sufficient grounds, it is now allowed to request an extension of up to 180 days. The Commissioner or an authorized official of a comparable or higher level (Additional Commissioner or Joint Commissioner) can make the request. They must provide documented justification for the extension.
4. There is a time restriction for filing GST returns
A registered taxpayer must file their GST returns, such as GSTR-1, GSTR-3B, GSTR-9, and GSTR-8, within three years of the date they were due to file them. According to the newest GST news, taxpayers would no longer be able to file their returns after three years.
5. GST of 28% on online gaming
Any money you spend into online gambling, casinos, or the purchase of chips will be subject to a 28% GST beginning October 1, 2023. The GST Council will evaluate the success of this new tax law for online gambling and casinos after six months.
6. Unregistered taxpayer assessment
In situations of withdrawal of the Best Judgement Assessment decision, the government has increased the time restriction for completing Form GSTR 3B or GSTR 10 (final return) from 30 days to 60 days. You can extend this 60-day period to 120 days if necessary, but you will be charged extra late costs on top of the usual late fee.
7. Information sharing with the taxpayer's permission
This new modification allows taxpayers to choose whether or not to share the information they supply on the common GST site with other systems (for example, when registration, return filing, making e-invoices, e-Waybills, or any other relevant documents). In layman's words, you have control over who may view your tax-related information, and you can grant permission for this sharing based on the most recent GST news.
8. Zero-rated Supplies to SEZ
This adjustment eliminates the question about whether supplies are eligible for zero-rated status. It guarantees that only supplies intended for authorized operations within a SEZ unit or by a developer are considered zero-rated. Previously, suppliers in the Domestic Tariff Area (DTA) needed permission from the authorized SEZ officer to claim an Input Tax Credit (ITC) or Integrated Goods and Services Tax (IGST) refund. This provision is now part of the official regulations, guaranteeing that it cannot be contested by an individual because it violates the law.
9. Increased monetary penalty for criminal offence
The government has raised the bar for making a tax infraction a criminal offence. If the amount of tax involved in the breach surpasses Rs. 2 crores, the infraction would be considered criminal. Previously, this maximum was set at Rs. 1 crore. According to the most recent GST updates, the threshold limit for cases involving false invoices for claiming input tax credit remains Rs. 1 crore.
10. Changes to ODIAR services
According to the most recent GST revisions, if you provide online services to persons in India but are not domiciled in India, you must register, collect, and pay Goods and Services Tax (GST). These services are known as Online Information Data Access Retrieval (OIDAR). OIDAR services are those that are mostly automated and need little human interaction and are delivered over the Internet or an electronic network. The Finance Act of 2023 makes the following adjustments to these rules:
- It removed the prior requirement for services to be mostly computer-driven with little human participation. As a result, formerly exempt services may suddenly be liable to GST. OIDAR services now include any service that relies on the internet or an electronic network.
- The Act also altered the definition of “non-taxable online recipient.” Individuals who acquire these services and are registered for GST simply to benefit from the tax deduction at source are now included. Previously, this group exclusively included unregistered people, regular consumers, and public bodies.
11. Interest will be charged on late returns
If your refund application takes more than 60 days to process, you are entitled to extra money known as ‘interest' as compensation for the delay. Certain factors, however, may be overlooked while computing this delay:
- If you get a notification (referred to as FORM GST RFD-08) and it takes you more than 15 days to respond (using FORM GST RFD-09) or submit additional documents, those days will not be counted in the delay calculation under the GST Law changes.
- If there is a problem depositing your return into your bank account owing to erroneous information given by you, the time required to repair this error will not be considered as a delay.
12. Changes in the location of supply of goods transportation
The GST rule for determining the site for shipping goods has been changed. Previously, if both the sender and the recipient were in India, the location was determined in a certain way. The amended rule, on the other hand, stipulates that the location of the goods recipient will now be the decisive element. According to the GST legislation modifications, this adjustment applies only if the receiver is a registered person.
Important Takeaways
GST legislation will be amended beginning in October 2023. These changes must be understood by firms and people that pay taxes. The goal of these revisions is to simplify the laws, minimize confusion, and make compliance with the Goods and Services Tax legislation in India easier. To comply with these new laws and reap the greatest benefits from them, taxpayers should consult with tax specialists and remain up to speed on GST news.
