GST tax was introduced in 2017 and replaced value-added tax (VAT) and all other indirect taxes. The government levies GST in 5%, 12%, 18,% and 28% slabs. The Goods and Services Tax Act 2017, which governs GST, is administered by the GST Council.
The State Goods and Services Tax (SGST), which state governments collect, and the Central Goods and Services Tax (CGST), which the federal government collects, make up this tax. New updates related to GST include the implementation of e-invoicing, introducing the QRMP scheme for small taxpayers, extending due dates for filing GST returns, reducing GST rates for various items, and simplifying GST registration procedures.
Did You Know? India's Goods and Services Tax (GST) system saw many changes due to the Union Budget 2023, unveiled on February 1, 2023.
Latest GST Updates As Per Union Budget 2023
On February 18, 2023, the 49th Council Meeting took place in New Delhi under the chairmanship of Smt. Nirmala Sitharaman, Federal Ministry of Finance and Corporate Affairs, where GST news updates were given.
Compliance Changes in the Goods and Service Tax
The economy of India has grown in size over the past nine years, moving up from tenth to fifth in the globe, according to the finance minister.
- A Goods Transport Agency's recommendation for choosing to pay taxes via the forward charge system (GTA).
- The IRIS IRP is one of the initial four IRPs the GSTN administration has selected in new advice for reporting e-Invoice.
- The CBIC included Frequently Asked Questions (FAQs) for location-based geocoding of current regular taxpayers' major offices (Only applicable for Haryana and Delhi).
- Negative numbers have been added to Table 4 of the GSTR 3B return via the GST portal.
- Regular taxpayers can choose the composition scheme for Financial Year 2023–2024 by going to the "Services-> Registration-> Composition Scheme Application Form" page. It will be accessible through the GST Portal until March 31, 2023.
Latest Updates on GST Regime for 2023
In the business world, there has been a lot of debate and analysis surrounding the revisions. These revisions are intended to streamline the tax code and promote the economy.
1. Operators in E-commerce and Composition Scheme
Composition plans have been made available to taxpayers who offer items through e-commerce companies. An individual who offers services through an e-commerce platform can still not choose the composition scheme. With a few limitations, the intra-state supply of products through an E-Commerce Operator (ECOs) is now permitted for composition taxpayers and unregistered suppliers under modified Sections 10 & 122 of the CGST Act.
2. Input Tax Credit on CSR
An amendment to section 17(5) of the CGST Act of 2017 states that the ITC on Corporate Social Responsibility (CSR) will not be available about goods or services or both received by a taxpayer that is used or intended to be used for activities related to obligations under CSR as defined in section 135 of the Companies Act of 2013.
The list of Block Credits as to which ITC cannot be claimed is contained in Section 17(5) of the CGST Act of 2017. A new clause has been added to Section 17(5), which stipulates that expenses related to the taxpayer's responsibilities under the 2013 Companies Act's reference to corporate social responsibility are deductible.
3. Transactions from Schedule III to be Incorporated into the Exempt Supply
Providing warehoused goods to any person is considered a non-taxable supply before authorisation for home use. The proposed amendment attempts to limit the ability to claim ITC on such supply by incorporating the value of such agreements into the value of exempt products. The suggestion is:
- Transactions from Schedule III are eligible for exempt supply, Sale of property and, subject to clause (b) of Schedule II's paragraph 5 on the sale of buildings: (a) Supply of items from warehouses to anybody before they are cleared for domestic use. The term "warehoused goods" must have the same meaning as outlined in the Customs Act of 1962.
4. Individuals Exempt from GST Registration
The following people are exempt from registration, despite anything to the contrary stated in subsection (1) of sections 22 or 24, specifically:
- Any person whose exclusive line of work is the provision of goods or services, or both, which are entirely exempt from taxation under this Act or the Integrated Tax on Goods and Services Act of 2017.
- On the Council's recommendations, the Government may set the categorisation of persons that might be exempt from obtaining authorisation under this Act by notice, subject to such limitations and conditions as specified within it. An agriculturist, to that same extent, supply of yield out of land cultivation.
5. Information Sharing with Consent
Specific data must only be shared with other systems with the supplier's and recipient's authorisation, as determined by the government. The information submitted by the taxpayer upon registration, GSTR-1 and GSTR-3B, annual returns, and the data given for generating e-invoices and e-way bills are meant to be shared with the taxpayer's consent. When the recipient's name is revealed, sharing the specifics of e-way bills and e-invoices also needs the recipient's permission.
6. Decriminalisation of Some Crimes
For prescribed offences, it is proposed to raise the bar for filing a lawsuit from one crore to two crores. It does not include offences involving invoices issued without providing goods, services, or both. So, the current prosecution system for fake billing will remain in place. Many cases are currently being brought because of fake invoices, and this pattern will persist.
7. GST Return Submission
It is planned to limit the submission of outbound supply information in GSTR-1 reports after a window of three years from the due date for filing the statement for the tax period. The government retains the right to impose an exception for registered people.
Actual and proposed limits on revisions and the submission of information concerning outbound shipments:
GSTR-1 can only be submitted if the previous period's return has been submitted. After three years from the due date for submitting the return for the specific tax period, the provision of invoice information will be prohibited.
These were a few of the significant recent GST updates mentioned and suggested in the 2023 Finance Bill.
GST Amendments 2021
The official finance budget for 2023 was unveiled on February 1 by Smt. Nirmala Sitharaman, minister of finance and corporate affairs for the union.
1. 46th GST Council Meeting
On December 31, 2021, the 46th GST Council meeting occurred in New Delhi. The GST rate increase for textiles will be delayed till 12%, according to a meeting chaired by Union FM Nirmala Sitharaman.
2. Removal of GSTR-2B
The 5% excess ITC over the ITC shown in GSTR-2B is removed from CGST Regulation 36(4). Businesses can only receive ITC starting in January 2022 if their suppliers declare it in GSTR-1 and IFF and it shows up in their GSTR-2B.
3. Extention of GSTR-9
The GSTR-9 and self-certified GSTR-9C due dates for the fiscal years 2020–21 have been extended till February 28, 2022.
4. Section 74
Several people may get notices under Section 74 from the officer for fraudulently claiming excess ITC or underpaid taxes. The law has been changed so that the officer may collect and seize property or automobiles even after all cases against those responsible for paying either particular or general penalties have been resolved.
5. GSTR-3B
If GSTR-3B for the prior period was not filed, taxpayers could not file GSTR-1. By Section 75, GST officers may begin recovery actions against taxpayers who underreport sales in GSTR-3B compared to GSTR-1 without giving them a show-cause notice.
6. Tax on e-commerce
Tax on services delivered through all e-commerce platforms into food delivery companies or cloud restaurants will be due. Restaurants with lodging that costs more per unit per day than ₹7,500 are excluded from the scope.
Compliance with GST Regimes
Since introducing GST in India about two years ago, most accountants and businesses have adapted to the new tax structure. However, some are still adjusting. Also, the Government released several GST updates, increasing the situation's complexity. Taxpayers must always stay current to assure compliance and prevent notices from being sent to them. The followings are some Dos and Don'ts that every GST payer should know:
Do’s
- Immediately submit your GST returns.
- Enter the Correct Data in GSTR-1.
- Keep appropriate records
- Conciliate your tax returns with your accounting records.
- Check the E-way Bills for accuracy against the GSTR-1 invoice details.
- Before submitting your annual return, check and amend your returns.
Don’ts
- Pay tax under the incorrect GST head and fail to submit your nil return.
- Classify zero-rated items as nil-rated supplies and vice versa.
- Apply the incorrect tax rates.
- If tax is due, pay it using a reverse charge.
- Request an ineligible credit for input taxes.
- Not claiming the transitional credit.
Conclusion
Media coverage of GST has been ongoing ever since it was introduced. The advantages and disadvantages are discussed, and the government is taking steps to address any flaws. Because of this, revisions are always made to the GST law to make it more transparent and easier to understand. It is essential to note the latest GST notification 2023 to stay updated with the amendments.
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