Finance Act, 2023 GST related Amendments

The CBIC has notified that all the GST related amendments introduced vide Finance Act, 2023 shall be effective from 01.10.2023. Few of the important amendments introduced are as follows –

1. Supply of goods or services made to an SEZ entity shall be treated as zero rated only when such supplies are “for authorised operations”. In other words, it becomes necessary for all persons supplying to SEZ to prove that the said supplies are for the purpose of authorised operations of SEZ. The only possible way of providing the same is by obtaining the endorsed copy of the invoices raised against the supplies made to the SEZ. Such process is made online through the “DTA Service Procurement Form (DSPF)” available with the SEZ entities.

2. Intra-state supply of goods is now allowed under composition even if it is made through an E-Commerce Operator. This amendment allows supply of only goods (and not services) within the state where the composition registration is obtained. Such a person making supplies through the E-Commerce Operator will have to register in the Common Portal using his PAN and shall obtain an “Enrolment Number” from the GST Portal. Only after obtaining such enrolment number, he shall be allowed to supply goods through the E-Commerce Operator

3. Input tax credit is blocked for availment and is ineligible in respect of CSR Expenses

4. Input tax credit is to be reversed proportionately under Rule 42 to the extent of “supply of warehoused goods before clearance for home consumption” which is regarded as neither goods nor services in Schedule III

5. In case of non-filing of GST Returns by a registered person, ASMT 13 shall be issued by the tax office. The registered person shall now have 60 days (earlier 30 days) to file all the returns and pay taxes along with interest and late fees. If not filed within 60 days from date of notice, the registered person shall be allowed to file all the returns and pay taxes, interest, late fees and another additional late fees of Rs. 200 / day within the next 60 days. If the registered person does not file the return within the extended time of 120 days, ASMT 13 shall be final and recovery action shall be initiated.

6. E-commerce operators shall be liable to penalty if –

1. They allow a person who is liable to obtain registration but supplies without registration
2. They allow a person to make inter-state supplies who are actually not allowed to make such inter-state supplies
3. They do not fall return in form GSTR 8

Penalty leviable is Rs. 10,000 or tax involved in the transaction, whichever is higher

7. The place of supply in case of transportation of goods shall not be associated with ‘the destination of the goods’.

1. Recipient in India –The place of supply shall be the location of the registered person or the place where goods are handed over for transportation (for unregistered person)
2. Recipient outside India – The place of supply shall be the location of the recipient or if his address is not available, location of supplier

8. Goods Transport Agency (GTA) can opt to pay taxes under forward charge (5% or 12%) by filing Annexure V. The Annexure V shall be valid until the GTA files Annexure VI expressing its intent to withdraw the option of paying taxes under forward charge. Annexure V or Annexure VI is to be filed only during the period 01.01 to 31.03 of the previous financial year.