Goods and Services Tax (GST) is a comprehensive indirect tax system in India that was introduced in July 2017, replacing multiple taxes such as VAT, Excise Duty, and Service Tax. GST is levied on the supply of goods and services, and the tax rate varies based on the type of goods and services being supplied. GST is a destination-based tax, meaning the tax revenue goes to the state where the goods or services are consumed. The GST council, consisting of the central and state government representatives, decides on the tax rate and any changes to the GST law.

GST news and updates must be tracked by every business for ensuring timely and 100% compliance. Read on to get the latest developments from CBIC, GST Council and GST Network/portal on GST returns and compliances, e-way bills and e-invoicing systems.

2024 GST Updates:

3rd September 2024

A new functionality of the Invoice Management System (IMS) was introduced on the GST portal, effective from 1 October 2024, which will help taxpayers address invoice corrections and amendments with their suppliers

Latest Changes of GST Law in Union Budget 2024:

Adding New GST Section 74A

To furnish the common time limit for the issuance of the demand notices and the orders no matter whether the matter comprises fraud, suppression, willful misstatement, etc., or not, for a period of Financial year 2024-25 onwards.

Adding New GST Section 128A

For exemption of interest and penalty for demand notices issued u/s 73, who pays full tax up to 31.03.2025.

Adding New Sub-section (5) in Section 16

Conditionally the same Amendment relaxes for cases where returns from the date of registration cancellation to revocation are filled within 30 days of the revocation order.

Adding New Section 11A

To authorize the government to regularize the former differences in tax practices via issuing a notification, ensuring that businesses are not unduly penalized for pursuing a generally accepted but wrong tax practice.

Modification in GST Sections 73 and 74

To furnish the distinct time limit for issuing the demand notices and the orders related to the duration up to FY 2023-24.

New Sub-section (5) in GST Section 16

Extending the due date to claim ITC for invoices or debit notes under section 16(4) of the CGST Act, to 30th November 2021 for FY 2017-18, 2018-19, 2019-20, and 2020-21. This extension applies to returns filed in FORM GSTR-3B.

Modification in GST Section 107 & Section 20 of the IGST Act

To diminish the amount of pre-deposit needed to be paid for filing of an appeal under GST.

Modification in GST Section 112

Time to file appeals in GST Appellate Tribunal, to permit 3 months period for filing appeals before GSTAT to begin from a date to be announced via the Government for appeals/ revision orders passed. It shall come into force from 01.08.2024.

Furthermore, decreasing the amount of pre-deposit required to be paid for filing the GSTAT appeals.

Modification in GST Section 122

E-commerce operators Penalty provisions

Modification in GST Section 140

To permit the transitional credit for service invoices obtained via the IGST before the appointed date. The amendment shall hold a retrospective effect from 01.07.2017.

Modification in Section 171 of the CGST Act 2017

To present a sunset clause for Anti-Profiteering measures and align these matters to the GSTAT (GST Tribunal)

Schedule III Related to No Supply

Co-insurance premium apportioned via lead insurer to the co-insurer towards the supply of insurance service via lead and co-insurer to the insured in coinsurance agreements and transactions of ceding commission/ re-insurance commission between insurer and re-insurer.

Modification in GST Section 54 & Section 16 of the IGST Act

To limit the IGST refunds for the goods within export duty, along with those exported or supplied to SEZs, irrespective of with or without tax payment.

Modification in GST Section 39

The enrolled individual ought to deduct tax under section 51 and should file the return in Form GSTR-7 monthly even when no tax has been deducted.                                                        

Other Modificationt

Also, there is a new amendment in section 9 of the CGST Act 2017 by the finance bill 2024.

Other Amendments in GST for FY-2023-24

1. Changes in GST Rates

The proposition of GST has led to numerous changes across the structure which has rationalized the GST rates for various goods and services in distinct manners affecting varied sectors differently. These changes affect planning and consequently the business as a whole and thus need to be put into account to ensure they comply.

Reduced Rates:

Some inputs and services were earlier in the GST ambit before the  liberalization of GST rates for certain products to mitigate the financial burden.

Increased Rates:

Whereas essential commodities and day-to-day usage products have received a cut in their GST rates to boost  revenue, non-essential and luxury products have received an increase in their GST rates.

Exemptions and Concessions:

They have reduced GST or given lower rates, on certain goods and services which are targeted to special sectors such as renewable energy and healthcare, et cetera.

2. Revised Input Tax Credit (ITC) Provisions

The changes in the Input Tax Credit (ITC) provisions are among some of the biggest changes on the GST front, for the FY 2023-24. These changes must be comprehended by businesses to ensure they secure the best of the ITC credits and to steer clear of any non-compliance.

Eligibility Criteria:

New limitations have been placed regarding the ability to claim ITC. Companies and corporations must verify compliance by their suppliers to GST legislation and correctness of uploaded invoices to the GST website.

Time Limit for Claiming ITC:

This is regarding the time threshold from the date of issue of invoice mentioning that credit has been availed has been increased up to either of the periods, the annual return has been filed through the assessee or the September return of the subsequent financial year, has been filed.

Matching of ITC:

There are improved reconciliations that have been established and implemented now thus ensuring that what is claimed by the ITC corresponds to the information that is given by the suppliers. Some of these penalties include the possibility of penalties in the course of the business transaction hence any inconsistencies must be reconciled immediately.

3. Penalty and Prosecution Provisions

Failure to comply with the regulation is punishable by a fine of up to € 200,000 or imprisonment of up to two years; legal entities can face a fine of up to € 1,000,000, suspension of operations, or partial or complete nationalization; Severe punishment can also be applied for the falsification of documents or indicating false information, as well as for interfering with the work of the supervisory authority. Amendments in the Act led to the enhancement of punishment in tax evasion and referral to prosecution in cases of non-compliance.

Late Fees and Penalties:

Scale up for money owed for filing returns after the due date of GST or GST provisions not being followed.

Prosecution for Fraudulent Activities:

More action for charging of the criminals subject to legal charges for fraudulent actions and stern penalties inclusive of imprisonment.

Critical Corrections Needed Before October 2024

1. Reconciliation of ITC

To achieve this, all companies have to reconcile their Input Tax Credit (ITC) before they can obtain any credits since they will need to prove that the claimed credits are real and not fake by providing valid invoices.

This involves:

Matching ITC with GSTR-2A and GSTR-2B:

Ensuring that ITC claimed in GSTR-3B matches the ITC available as per GSTR-2A and GSTR-2B.

Rectifying Discrepancies:

The next course of action is to immediately address any disparities between the ITC claimed and the ITC captured in the supplier’s returns, in order to eliminate future problems.

2. Updating Accounting Systems

To comply with the new GST amendments, businesses must update their accounting systems and software to handle the revised provisions, including To comply with the new GST amendments, businesses must update their accounting systems and software to handle the revised provisions, including:

Invoicing Software:

Some of the specifications include: Confirming that the software is able to create e-invoices wherever it’s possible and along with it ensuring that all necessary details are captured correctly.

GST Compliance Tools:

To enhance GST compliance and minimize operational risk, leveraging better GST tools to monitor the changes in GST rates, better handling of ITC and accurate filing of returns.

3. Training and awareness programs

Training and awareness programs are an integral part of any organizational development activities as they are the key strategy through which the organizational goals and objectives are communicated to the employees of the organization to ensure organizational success.It is crucial for the accounting and finance teams to continually update about the recent changes in the gst act and policies and to achieve this it is wise to engage them in training and awareness programs.

Regular Workshops:

Scheduling factory-focused awareness creation sessions such as training workshops and seminars in order to pass information on the new provision and their implications to the employees.

Expert Consultation:

Requesting advice on different complex areas for determining legal requirements in GST for compliance.

4. Extended filing of return

It is therefore essential to meet all the statutory filing of the GST returns in order to avoid incurring heavy penalties and interests. Businesses should:

Set Reminders:

Encourage a strong system of reminders and alert which helps to ensure timely submission of all the GST returns as and when required.

Regular Reviews:

It showed that one needs to carry out the checks of GST filings on a regular basis to reduce the extent of errors.