Changes in GST | Finance Bill, 2023


    The Changes proposed in GST Laws (CGST and IGST) via the Finance Bill,2023 are explained briefly in this blog.

    To read about changes in Income Tax , visit our other blogpost 

    ITC on CSR spending to be Blocked Credit


    As per Section 135 of the Companies Act, 2013 , certain companies are under obligation to spend a portion of profits on Corporate Social Responsibility. There are different opinions on the eligibility of  Input Tax credit on the amount spent under CSR. 

    It is proposed in bill that such ITC on amount spent under CSR will be disallowed under Section 17(5) by inserting clause fa.  

    Composition Scheme extended to Supplier of goods to E-Commerce Operator

    At present,  a person who supplies goods or Services to an E-commerce operator (ECO) is not eligible for opting Composition Scheme.

    It is proposed in the bill that if he supplies goods to ECO, he will be able to opt for the Composition scheme. 

    However, there is no change for a Service provider.

    Time Limit for Filing GST Returns/ TCS Return  

    At present, there is no outer limit prescribed in the Act for filing GST Returns (GSTR-1, GSTR-3 GSTR-8, and GSTR -9).

    It proposed not to allow filing of GSTR-1, GSTR-3B, GSTR-8, and GSTR -9 after 3 (three) years from the due date of the respective return. 

    Further, the government, on the recommendation of Council may prescribe, by notification, allow registered persons or class of registered persons  to  furnish details (return) even after expiry of three years from the due date of furnishing of return.  

    ECO to pay penalty for contravention of provision

    It is proposed to provide for penal provisions applicable to electronic commerce operators in case of contravention of provisions relating to supplies of goods or services made through them by unregistered persons or composition taxpayers. to the extent ten thousand or 50% tax involved, which is higher.


    Restriction of ITC on warehoused goods cleared for home consumption

    Section 17(3) amend  to include currently restricts ITC in respect of sale of land and sale of building post receipt of completion certificate. The said section is now proposed to be amended to include the value of transactions referred to in Para 8(a) (Goods warehoused before to any person before clearance for home) of the Schedule III of the CGST Act. 

    ITC reversal will now include ITC  attributable to such supply of goods  

    Registration not required , if person  is engaged in  Exempt Supply only 

    The person who supplies only exempt supplies of Goods or Services or both, he is not will not required to register. Even agriculturist , to the extent of supply of  produce out of cultivation of land 

    Interest on refund to be calculated beyond 60 days of submission of refund application. 

    The interest for delay in refund ,will be calculated from the 61st date of submission of the refund application. 


    Changes leading to decriminalization of certain offences

    Following offences are removed from Section 132 (Punishment / imprisonment)

    1. Obstructs or prevent any officer in the discharge of his duties 
    2. Tampers with  or destroys any material evidence or documents  
    3. Fails to supply any information 

    Further for arrest the minimum limit has been raised to Rs 2 crore except in case of fake invoicing.

    The limit remains Rs 1 crore in cases involving fake invoicing.

    Compounding Charges reduced 

    The compounding changes payable to escape from prosecution are reduced to 25% to 100% (from 50% to 150%) excluding the offence of fake bill.


    Scope of OIDAR is increased by amending the Definition

    The new definition of Non taxable  online recipient 2(16) now includes only unregistered persons. earlier it includes 

    The definition of OIDAR amended to exclude  the condition “essentially automated and involving minimum human intervention”.  


    Change in Place of Supply of Goods where  Transport of Goods is place outside India 

    The Proviso to Sub section 8 of Section 12 of IGST is omitted.  The place of supply will be the location of the registered person receiving such transport service. 


    Feb 02, 2023 - Blog - Team SSB

    Comments are closed.

    error: Content is protected !!