Key Changes in Central Goods and Services Tax (CGST) by Finance Bill - 2024
Introduction
The Finance Bill has introduced several significant amendments to the Central Goods and Services Tax (CGST) Act. These changes aim to streamline tax processes, provide clarity on certain provisions, and empower authorities to regularize tax practices. This article provides a detailed overview of these changes, clause by clause.
Key Amendments
Clause 110: Amendment of Section 9 This amendment clarifies that no central tax will be levied on un-denatured extra neutral alcohol or rectified spirit used for manufacturing alcoholic liquor for human consumption. This change is crucial for the alcoholic beverages industry, ensuring that such products are not double-taxed.
Clause 111: Amendment of Section 10 A reference to the newly introduced section 74A is incorporated, aligning this section with the latest legislative changes.
Clause 112: Insertion of New Section 11A The government is now empowered to regularize non-levy or short levy of central tax due to a general practice. This provision allows for greater flexibility and rectification of tax assessments based on common practices.
Clause 113: Amendment of Section 13 This amendment specifies the time of supply of services where the invoice must be issued by the recipient in reverse charge supplies. It provides clarity on the timeline for such invoicing requirements.
Clause 114: Amendment of Section 16 Allows for the availment of input tax credit for specific financial years and sets conditions for availment post-cancellation of registration. This change ensures that businesses can claim credits even after their registration is cancelled, subject to certain conditions.
Clause 115: Amendment of Section 17 This amendment restricts the non-availability of input tax credit for demands up to FY 2023-24 and removes references to sections 129 and 130. It aims to provide clarity on the applicability of input tax credits.
Clause 116: Amendment of Section 21 Incorporates a reference to the new section 74A, aligning the section with the updated legislative framework.
Clause 117: Amendment of Section 30 Empowers the Central Government to prescribe conditions and restrictions for the revocation of the cancellation of registration. This provides a structured approach for businesses seeking to restore their GST registration.
Clause 118: Amendment of Section 31 This amendment prescribes the time period for the issuance of an invoice by the recipient in reverse charge mechanism supplies, providing clarity on compliance requirements.
Clause 119: Amendment of Section 35 Incorporates a reference to the new section 74A, ensuring consistency across the CGST Act.
Clause 120: Amendment of Section 39 Mandates the electronic furnishing of returns for tax deduction at source, promoting digital compliance and efficiency.
Clause 121: Amendment of Section 49 Incorporates a reference to the new section 74A, maintaining alignment with legislative changes.
Clause 122: Amendment of Section 50 Incorporates a reference to the new section 74A, ensuring consistency in the application of interest on delayed payments.
Clause 123: Amendment of Section 51 Incorporates a reference to the new section 74A, aligning with the updated legal framework.
Clause 124: Amendment of Section 54 Omission of the second proviso to subsection (3) disallows refunds of unutilized input tax credit in zero-rated supply cases subject to export duty. This change aims to streamline refund provisions.
Clause 125: Amendment of Section 61 Incorporates a reference to the new section 74A, ensuring legislative consistency.
Clause 126: Amendment of Section 62 Incorporates a reference to the new section 74A, aligning with the updated framework.
Clause 127: Amendment of Section 63 Incorporates a reference to the new section 74A, ensuring consistency in tax determination.
Clause 128: Amendment of Section 64 Incorporates a reference to the new section 74A, maintaining legislative alignment.
Clause 129: Amendment of Section 65 Incorporates a reference to the new section 74A, aligning with the changes.
Clause 130: Amendment of Section 66 Incorporates a reference to the new section 74A, ensuring consistency across provisions.
Clause 131: Amendment of Section 70 Enables an authorized representative to appear on behalf of the summoned person, providing flexibility in compliance.
Clause 132: Amendment of Section 73 Restricts applicability for the determination of tax up to FY 2023-24, clarifying the scope of tax determination.
Clause 133: Amendment of Section 74 Restricts applicability for the determination of tax up to FY 2023-24, ensuring clear guidelines for tax assessments.
Clause 134: Insertion of New Section 74A Provides for tax determination for FY 2024-25 onwards with a uniform limitation period, introducing a standardized approach for future assessments.
Clause 135: Amendment of Section 75 Provides for the redetermination of penalty in specific cases and incorporates a reference to section 74A, ensuring fair penalty assessments.
Clause 136: Amendment of Section 104 Incorporates a reference to the new section 74A, maintaining legislative consistency.
Clause 137: Amendment of Section 107 Reduces the maximum amount of pre-deposit for appeals and incorporates a reference to section 74A, providing relief for appellants.
Clause 138: Amendment of Section 109 Empowers the Appellate Tribunal to examine specific cases and matters referred to under section 171, enhancing its scope of review.
Clause 139: Amendment of Section 112 Notifies the date for filing appeals before the Appellate Tribunal and revises the time limit for filing appeals, ensuring timely justice.
Clause 140: Amendment of Section 122 Restricts applicability to electronic commerce operators required to collect tax at source, clarifying their compliance requirements.
Clause 141: Amendment of Section 127 Incorporates a reference to the new section 74A, ensuring consistency in administrative provisions.
Clause 142: Insertion of New Section 128A Provides a conditional waiver of interest and penalty for demand notices issued under section 73 for specific financial years, offering relief for past non-compliance.
Clause 143: Amendment of Section 140 Enables the availment of transitional credit for input services received by an Input Services Distributor, facilitating smoother credit transitions.
Clause 144: Amendment of Section 171 Empowers the Government to notify the date for the discontinuation of anti-profiteering applications and includes the Appellate Tribunal in the "Authority" definition, enhancing the regulatory framework.
Clause 145: Amendment of Schedule III Specifies the treatment of co-insurance and reinsurance services for tax purposes, providing clarity for the insurance sector.
Clause 146: Refund Provisions Specifies that no refund will be provided for tax paid or input tax credit reversed under section 114, clarifying the refund policy.
Conclusion
The amendments introduced in the Finance Bill 2024 are extensive and aim to streamline various aspects of the CGST Act. These changes provide greater clarity, introduce new provisions to address existing gaps, and enhance the overall framework for tax compliance and administration. Businesses and tax professionals must stay updated with these changes to ensure compliance and optimize their tax strategies.
