Budget 2023: GST Changes Simplified

Budget 2023: GST Changes Simplified

The 2023 budget has brought several changes to the Goods and Services Tax (GST) system in India. To help you understand these changes, we’ve put together a simple explanation of the key GST changes.

1. Section 10 has been amended, allowing taxpayers to choose the composition scheme even if they are supplying goods through e-commerce operators where TCS is collected under Section 52. However, restrictions for the supply of services shall continue as earlier.

2. Section 16 has been amended with a new condition stating that if a recipient taxpayer does not pay their supplier the invoice value, including GST, within 180 days from the invoice date, they must pay interest as calculated under Section 50."

3. Section 17(5) has been revised to include another item under "Blocked Credit" - Expenditure on CSR initiative for corporates.

4. Changes have been made in the Explanation of Section 17(3) to restrict the availment of proportionate ITC on transactions covered in para 8(a) of Schedule III (i.e. High Sea Sales) by including it in the value of exempt supplies. So as a result taxpayers will need to reverse more ITC. 

5. Sections 37, 39, 44, and 52 have been revised to restrict taxpayers from filing GSTR-1 (for outward supplies), GSTR-3B (summary returns), GSTR-9 (annual returns), and GSTR-8 (for e-commerce operators) for a tax period after the expiry of three years from the due date.

6. A penalty of Rs.10,000 or an amount equivalent to the amount of tax involved, whichever is higher will be charged for e-commerce operators who- 

• Allow an unregistered person to supply goods or services or both through them except where such person is exempted from GST registration.
• Allow any registered person from making inter-state supply of goods/services through them where they are ineligible for it. 
• Do not furnish accurate details in the GSTR-8 of any sale of goods made through them by a person exempted from obtaining GST registration. 

7. The following offences have been decriminalised-

• Where a person obstructs or prevents an officer in the discharge of their duties under the CGST Act,
• Where a person tampers with or destroys material evidence or documents,
• Where a person fails to supply information that is required to be supplied under the CGST Act or Rules or supplies false information.

8. In regard to the compounding of offences, the limits have been changed to 25% of the tax involved up to a maximum amount of 100% of the tax involved.
9. A new section 158A has been inserted in the CGST Act to allow businesses to now share GST data digitally with consent. It prescribes the manner and conditions for sharing information furnished by a registered person on the GST portal with such other systems as may be notified, as declared in- 

• Returns filed under GSTR-1/3B/9, or 
• Application of registration, or
• Statement of outward supplies, or 
• Generation of an e-invoice or e-way bill, or
• Any other details, as may be prescribed.