The Central Board of Indirect Taxes and Customs (CBIC), via Notification No. 17/2024-Central Tax dated 27th September 2024, has established the applicability dates for certain provisions of the Finance Act, 2024, in connection with the Central Goods and Services Tax (GST) Act. The provisions have been made effective on two different dates: 27th September 2024 and 1st November 2024. Below is a detailed analysis of the changes that will take effect on these respective dates.

A. Changes Effective from 27th September 2024

1. Changes Related to Input Tax Credit (ITC)

  • Section 16(5) of CGST Act:

    The conditions under Section 16 of the CGST Act, 2017, have been relaxed with retrospective effect from 1st July 2017. This relaxation extends the deadline for claiming ITC for invoices or debit notes under Section 16(4) until 30th November 2021 for the financial years 2017-18, 2018-19, 2019-20, and 2020-21. The extension applies to returns filed in FORM GSTR-3B (vide Section 118 of the Finance Act, 2024).

  • Section 16(6) of CGST Act:

    This amendment conditionally allows the availment of ITC when a GST registration is revoked but later reinstated, provided that the returns for the cancellation period are filed within 30 days of the revocation order (vide Section 118 of the Finance Act, 2024).

2. Empowering Appellate Tribunal: Section 109 Amendment

The government is empowered to notify specific types of cases that must be heard only by the Principal Bench of the Appellate Tribunal, including anti-profiteering matters. This is aimed at ensuring that complex and significant cases are handled by a specialized tribunal (vide Section 142 of the Finance Act, 2024).

3. Anti-Profiteering Measures: Sunset Clause in Section 171

  • A sunset clause has been introduced for the anti-profiteering measures under Section 171 of the CGST Act. This ensures that all such cases will now be aligned with the jurisdiction of the GST Appellate Tribunal (GSTAT), thereby providing a clear endpoint for these measures (vide Section 148 of the Finance Act, 2024).

4. No Refund Provision: Section 118

  • No refunds will be granted for tax paid or ITC reversed, which would not have been payable or reversed had Section 118 been in force at all relevant times (vide Section 150 of the Finance Act, 2024).

B. Changes Effective from 1st November 2024

1. Exclusion of Certain Alcohol from GST: Section 9 Amendment

  • Undenatured extra neutral alcohol (ENA) or rectified spirit used for manufacturing alcoholic liquor for human consumption has been excluded from the purview of GST. This amendment is applicable under Section 9 of the CGST Act and Section 5(1) of the IGST Act (vide Sections 114 and 151 of the Finance Act, 2024).

2. Amendment in Multiple Sections: Section 10, 21, 35, and More

  • References to Section 74A have been added to various sections of the CGST Act, wherever Section 73 or Section 74 were previously mentioned. This brings more consistency and clarity to demand and recovery provisions (vide Sections 115, 120, 123-140, and 145 of the Finance Act, 2024).

3. Regularization of Past Tax Practices: Section 11A Insertion

  • The government has been empowered to regularize past discrepancies in tax practices through a notification. This provides relief to businesses that may have followed generally accepted, but incorrect, tax practices, ensuring that they are not unfairly penalized (vide Section 116 of the Finance Act, 2024).

4. Time of Supply for Reverse Charge Mechanism (RCM)

  • For services subject to Reverse Charge Mechanism (RCM), the amendment specifies the time of supply where the recipient must issue a self-invoice (vide Section 117 of the Finance Act, 2024).

5. Amendment to Section 17(5): Restriction on ITC

  • The restriction on the availability of ITC in cases where tax is paid under Section 74 is limited to demands up to the financial year 2023-24. Additionally, references to Sections 129 and 130 have been removed (vide Section 119 of the Finance Act, 2024).

6. Revocation of Registration: Section 30 Amendment

  • The Central Government has been granted the power to prescribe conditions and restrictions for the revocation of GST registration cancellations (vide Section 121 of the Finance Act, 2024).

7. Time Limit for Issuance of Invoice: Section 31 Amendment

  • A time limit has been proposed for issuing invoices by the recipient when they are liable to pay taxes under RCM (vide Section 122 of the Finance Act, 2024).

8. Filing of GSTR-7 Return for TDS Deductors

  • Registered persons required to deduct tax under Section 51 must now file a monthly return in FORM GSTR-7, even if no tax has been deducted (vide Section 124 of the Finance Act, 2024).

9. Restriction on IGST Refunds: Section 54 Amendment

  • IGST refunds are restricted for goods subjected to export duty, including those exported to SEZs. This applies regardless of whether the goods were supplied with or without payment of tax (vide Section 128 of the Finance Act, 2024).

10. Summons Compliance: Section 70 Amendment

  • Authorized representatives can now appear on behalf of summoned persons to comply with summons issued by the proper officer (vide Section 135 of the Finance Act, 2024).

11. Common Time Limits for Demand Notices: Section 74A Insertion

  • A common time limit has been established for demand notices and orders, irrespective of fraud or misstatement. This will apply to cases from the financial year 2024-25 onwards, while demands related to earlier periods will continue under the old provisions (vide Section 138 of the Finance Act, 2024).

12. Pre-Deposit for Appeals: Section 107 and Section 112 Amendment

  • The pre-deposit amount for filing GST appeals has been reduced, making it more accessible for taxpayers. Additionally, the time limit for filing appeals before the GST Appellate Tribunal (GSTAT) has been set at 3 months from the notification date (vide Sections 141 and 143 of the Finance Act, 2024).

13. E-Commerce Penalties: Section 122 Amendment

  • Penalty provisions for e-commerce operators have been updated, reflecting the evolving digital commerce landscape (vide Section 144 of the Finance Act, 2024).

14. Waiver of Interest and Penalty: Section 128A Insertion

  • A waiver of interest and penalty is provided for demand notices, orders, or appellate orders under Section 73 of the CGST Act for the financial years 2017-18, 2018-19, and 2019-20, provided the full tax amount is paid by a notified date (vide Section 146 of the Finance Act, 2024).

15. Transitional Credit for Service Invoices: Section 140 Amendment

  • This amendment allows for transitional credit for service invoices received by IGST before the appointed date, with retrospective effect from 1st July 2017 (vide Section 147 of the Finance Act, 2024).

16. Amendments in Schedule III: Co-Insurance and Re-Insurance Transactions

  • Co-insurance premiums and re-insurance commissions are now included in the CGST Act, streamlining these financial transactions within the GST framework (vide Section 149 of the Finance Act, 2024).

These amendments represent significant updates aimed at enhancing the clarity, efficiency, and fairness of the GST system. Businesses and tax practitioners should familiarize themselves with these changes to ensure compliance and optimize their GST practices.

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