20Oct23 New GST Changes Webina@r ppt.pdf

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WebinarPresentation
Speaker
AkellaPrakasaRao
TaxExpert
Advocate–IndirectTax

Akella Prakasa Rao
Welcoming
TaxExpert
Advocate–IndirectTax

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Webinar Agenda
• Deletion of Liability on Import Ocean Freight in CIF Imports (Notification 11, 12 & 13/2023-IGST Rate)
• Composition Levy Extended for Ecommerce Goods Suppliers (Section 10 CGST Act, 2013)
• Clarificatory Amendment Concerning Payment to Supplier within 180 Days (Section 16 of CGST Act, 2017)
• Inclusion of Sale of Warehoused Goods in Value of Exempt Supply (Section 17(3) of CGST)
• ITC Blocked on CSR Activities (Section 17(5)(fa) of CGST)
• Retrospective Overriding Effect of Section 23(2) on Sections 22 and 24
• Time Limit for Application for Revocation of Cancelled Registration (Section 30 & Rule 23)
• Limitation on Filing Returns (Section 37, 39, 44, 52 of CGST)
• Refunds and Interest on Delayed Refunds (Section 54 & 56 of CGST and Rule 94)
• Assessment of Unregistered Persons (Section 62 of CGST)
• Inclusion of ‘Non-taxable Online Recipient’ (Rule 64 of CGST Rules)

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• Penalty for Certain Offences (Section 122(1B) of CGST)
• Punishment for Certain Offences (Section 132 of CGST)
• Compounding of Offences (Section 138 of CGST and Rule 162)
• Consent-Based Sharing of Information (Section 158A of CGST Rule 162)
• Retrospective Applicability of Schedule III (Schedule III of CGST and Rule 43)
• Scope of OIDAR Services Widened (Section 2(17) of IGST Act)
• Amendment for Invoicing rules HSN code Mandatory
• Place of Supply for Transportation of Goods (Section 12(8) and 13(9) of IGST)
• Zero-rated Supplies to SEZ for Authorized Operations (Section 16(1)(b) of IGST Act)
• IGST Zero-rated Supplies Not Permitted with Payment of IGST Until Notified (Section 16(3) & (4) of IGST Act)
• Details of notifications issued with changes applicable from 01.10.2023
• 52nd GST Council minutes
Webinar Agenda

Deletion of Liability on Import Ocean Freight in CIF Imports (Notification 11, 12 & 13/2023-IGST Rate):
Sr. No. 109(c) of Notification No. 9/2017-Integrated Tax (Rate) dated June 28, 2017 which, in general, exempted service
provided by a person in non-taxable territory to non-taxable territory, specifically excluded inbound ocean freight from this
exemption. Therefore, in case of inbound ocean freight, service provided by a person located outside India to a person
located outside India was liable to GST. Since, it is not possible to levy and recover tax on overseas service providers, in
such cases, an importer was made liable to pay GST under Reverse Charge Mechanism (RCM), as per entry 10 of
Notification No. 10/2017 – IGST (Rate). Therefore, in case of import on CIF basis, an importer was required to pay GST
under RCM on 10% of CIF value of the goods imported (deemed value of service).
1. Notification No. 11/2023- Integrated Tax (Rate) Dated: 26th September, 2023– removed inbound ocean freight services
provided by a person in non-taxable territory to non-taxable territory from the relevant entry under IGST rate notification.
2. Notification 12/2023-Integrated Tax (Rate) dated September 26, 2023– removed the exclusion of inbound ocean freight
from the exemption provided for services by a person in non-taxable territory to a person in non-taxable territory.
3. Notification 13/2023-Integrated Tax (Rate) dated September 26, 2023– removed the entry related to liability of importer
under RCM in such cases.
GST changes from 01.10.2023

Location Place of Supply Ocean Freight Air Freight
SP SR Before After Before After Before After
Outbound
Karnataka Outside India Outside Inda
(POD)
Outside India
(LOR)
Zero rated No change Zero rated No change
Outside India Karnataka Outside Inda
(POD)
Outside India
(LOR)
Not taxed Taxable as
import under
RCM
Not taxed Taxable as
import
under RCM
Outside India Outside India Outside Inda
(POD)
Outside India
(LOR)
Not taxed No change Not taxed No change
Inbound
Karnataka Outside India Inda (POD) Outside India
(LOR)
GST as per POD Zero rated Exempt No change
Outside India Karnataka Inda (POD) Outside India
(LOR)
Taxable as
import under
RCM
No change Exempt No change
Outside India Outside India Inda (POD) Outside India
(LOR)
Not taxed Not taxed Exempt No change

• Composition Levy Extended for Ecommerce Goods Suppliers (Section 10 CGST Act, 2013):The composition
scheme, previously unavailable to registered persons supplying goods through ecommerce operators, is now
extended to them. It’s important to note that registered persons engaged in the supply of services through
ecommerce operators are still restricted from availing this benefit. Refer Notification No. 36/2023-Central Tax
dated 04.08.2023.
• Clarificatory Amendment Concerning Payment to Supplier within 180 Days (Section 16 of CGST Act, 2017): To
align the language of law with the return filing system, it is provided that where a recipient fails to pay to the
supplier the amount towards the value of supply along with tax, within a period of 180 days from the date of issue
of invoice, an amount equal to the ITC availed by the recipient, shall be paid by the recipient along with interest
payable u/s 50 of the CGST Act. The pre-amendment provision provides for payment of ITC as addition to output
tax liability whereas, post-amendment it would be payment/reversal of ITC. Consequently, the liability of interest
on such reversal shall be determined in accordance with Section 50(3) instead of 50(1) of the CGST Act. Payment
should be done to supplier only. Payment made to other than supplier shall not be eligible for reclaim.

• Inclusion of Sale of Warehoused Goods in Value of Exempt Supply (Section 17(3) of CGST): As per Notification No.
36/2023 – Central Tax dated 04.08.2023, the sale value of warehoused goods before clearance will now be included
in the value of exempt supply for the purpose of reversing common input tax credit under Section 17(2)(3) read
with Rule 42/43.
• ITC Blocked on CSR Activities (Section 17(5)(fa) of CGST): A newly introduced clause in Section 17(5)(fa) of the
CGST Act pertains to Corporate Social Responsibility (CSR) activities. As per the change, Input Tax Credit (ITC) will
no longer be available on goods or services received by a taxable person, which are used or intended to be used for
activities related to fulfilling obligations under CSR activities. However this new insertion is prospective in nature
and hence the past ITC on CSR is eligible, but the revenue may litigate the matter.
• Retrospective Overriding Effect of Section 23(2) on Sections 22 and 24: This amendment effective from
01.07.2017 stipulates that persons exempted from obtaining GST registration by virtue of a notification issued
under Section 23(2) of the CGST Act need not obtain registration regardless of the provisions under Section 22
(threshold limit cases) or Section 24 (mandatory cases). It’s noteworthy that persons exempted from registration
under Section 23(1) do not benefit from this amendment.

• Time Limit for Application for Revocation of Cancelled Registration (Section 30 & Rule 23): As per [Notification No.
38/2023- Central Tax dated 4th Aug 23], the previous time limit of 30 days prescribed under Section 30 has been
omitted. Instead, the time period is now prescribed under Rule 23 and has been extended to 90 days from the date of
the order of cancellation. Additionally, the Commissioner has the authority to allow further extensions, not exceeding
180 days.
• Limitation on Filing Returns (Section 37, 39, 44, 52 of CGST): As per the [Notification No. 38/2023 – Central Tax dated
4th Aug 23], registered persons will not be allowed to furnish returns in GSTR-1, GSTR-3B, GSTR-9, GSTR-9C, and
GSTR-8 after a period of three years from the due date of furnishing of the relevant return.
• Refunds and Interest on Delayed Refunds (Section 54 & 56 of CGST and Rule 94): According to the amendments,
Section 54 has undergone technical changes to align with the current scheme of ITC availment on a self-assessment
basis. Provisional Refund of ITC in case of Export is omitted. Section 56 specifies that interest on delayed refunds will
be granted subject to certain conditions and restrictions. The manner in which interest will be prescribed is also
mentioned. It has been amended now w.e.f 1.10.2023 to exclude the period of delay caused due to assessee in
computing period of 60 days for calculation of interest on payment of refund. [Notification No. 38/2023- Central Tax
dated 4th Aug 23]

• Assessment of Unregistered Persons (Section 62 of CGST): An important change pertains to the period within
which a taxable person must furnish Form GSTR 3B or Form GSTR 10 (Final Return) in cases of Best Judgment
Assessment. The period has been increased from 30 days to 60 days under the Best Judgment Assessment for
effecting the deemed withdrawal of the best judgment order. Beyond 60 days, an additional period of 60 days (61
to 120 days) has been extended, subject to the payment of an additional late fee over and above the standard late
fee.
• Inclusion of ‘Non-taxable Online Recipient’ (Rule 64 of CGST Rules): A significant inclusion to Rule 64 is the term
“non-taxable online recipient” as referred to in the Integrated Goods and Services Tax (IGST) Act, 2017. This change
expands the scope of Rule 64 to cover more categories of recipients, thereby promoting greater tax compliance.
[Notification No. 38/2023- Central Tax dated 4th Aug 23]
• Penalty for Certain Offences (Section 122(1B) of CGST): These provisions apply in cases of contravention of
provisions relating to supplies of goods made through ECOs by unregistered persons or composition taxpayers.
[Notification No. 37/2023 – Central Tax dated 04.08.2023]

• Punishment for Certain Offences (Section 132 of CGST): Section 132 of the CGST Act, which deals with the
punishment for certain offences, has undergone several amendments: a) Some offences specified under
clause (g), (j), and (k) from Section 132(1) of the CGST Act, 2017, have been decriminalized. b) There is an
amendment in the monetary threshold for initiating prosecution proceedings. The threshold has been
amended from Rs. 1 Crore to Rs. 2 Crore for launching prosecution, except for cases involving fake/bogus
invoices. In cases of offences other than fake invoices, imprisonment can be initiated if the value exceeds Rs.
2 crores, while prosecutions for fake invoices will continue for the threshold amount of Rs. 1 Crore.
• Compounding of Offences (Section 138 of CGST and Rule 162): The amendment concerning the
compounding of offences brings two significant changes: a) Fake/bogus invoice cases are excluded from the
option of compounding of offences. b) The amendment reduces the amount for compounding various
offences, except for the offence of fake invoices. Under the new provisions, the minimum compounding
amount is 25% of the tax involved, and the maximum is 100% of the tax involved. This is a notable change
from the previous minimum of higher of Rs. 10,000 or 50% of tax involved and a maximum of higher of Rs.
30,000 or 150% of tax involved. [Notification No. 38/2023- Central Tax dated 4th Aug 23]

• Consent-Based Sharing of Information (Section 158A of CGST Rule 162): An insertion of Section 158A allows for the
sharing of information or details furnished by a taxable person on the GST common portal with other systems as may
be notified by the government. [Notification No. 38/2023- Central Tax dated 4th Aug 23]
• Retrospective Applicability of Schedule III (Schedule III of CGST and Rule 43): Several retrospective changes have
been made to Schedule III of the CGST Act. These changes concern the activities of supply of goods from a place
outside the taxable territory to another place outside the taxable territory, high sea sales, and the supply of
warehoused goods before their clearance for home consumption. These supplies are proposed to be made non-
taxable with retrospective effect from July 1, 2017, to resolve ongoing and prospective litigations. However, no refund
of such tax paid shall be available in cases where any tax has already been paid in respect of such
transactions/activities during the period from July 1, 2017, to January 31, 2019. [Notification No. 38/2023- Central Tax
dated 4th Aug 23]
• Scope of OIDAR Services Widened (Section 2(17) of IGST Act): In the definition of Online Information Database Access
and Retrieval (OIDAR) services, the condition of “essentially automated” and “involving minimal human intervention”
has been removed, making the definition more inclusive.

• Amendment for Invoicing rules HSN code Mandatory:
Aggregate Turnover > 5 crore: 6 digits in their E-invoices/E-way bill
Aggregate Turnover < 5 crore: 4 digits in their E-invoices/E-way bill.

Place of Supply for Transportation of Goods (Section 12(8) and 13(9) of IGST):
Place of supply of transportation of goods, including by mail or courier (Section 12(8) of IGST Act): The proviso to
Section 12(8) has been omitted. As a result, the place of supply, irrespective of the destination of the goods, will be
determined based on the location of the recipient of the service. If the recipient is a registered person, half of the tax
shall accrue to the State where the recipient is registered, as opposed to the previous practice of the full tax accruing
to the Union in case of goods destined outside India.
Place of supply of transportation of goods, other than by mail or courier (Section 13 of IGST Act): Section 13(9) of
the IGST Act, 2017, has been omitted. Consequently, the place of supply of services in the case of transportation of
goods, other than by way of mail or courier, would be covered under the default provision of Section 13(2) of the IGST
Act. It will be determined based on the location of the recipient of services, in cases where either the supplier of
services or recipient of services is located outside India. This change has significant implications for international
trade, as services to recipients outside India will qualify as exports, and services from suppliers outside India will
qualify as imports of service, regardless of the destination of goods. [Notification 13/2023 – Integrated Tax (Rate)
dated 26th Sept 23] [Notification 11/2023 – Integrated Tax (Rate) dated 26th Sept 23]

• Zero-rated Supplies to SEZ for Authorized Operations (Section 16(1)(b) of IGST Act): An important change to Section
16(1)(b) has added the words “for authorized operations.” This amendment clarifies that only supplies made for
authorized operations to Special Economic Zone (SEZ) units or developers shall qualify as zero-rated supplies. This
amendment streamlines the process and removes the need for an endorsement from a designated SEZ officer regarding
authorized operations, as required by Rule 89. [Notification No. 27/2023–Central Tax Dated: 31st July, 2023] It has been
clarified on 03.10.2023 on Instruction 95 dt.11.06.2019 that the zero rating would continue for the lease rental/other
charges collected by Developer from units for setting up of employee welfare facilities like canteen, creche, gymnasium
and the like for the exclusive use of their employees.
• IGST Zero-rated Supplies Not Permitted with Payment of IGST Until Notified (Section 16(3) & (4) of IGST Act): The
default option is now supplying under LUT without tax payment and claiming refund of accumulated ITC, with the
government authorized to notify categories permitted for IGST payment and refund route. The latest notification,
No.01/2023-IGST, permits tax payment for all exports of goods and services, barring specific goods like cigarettes, pan-
masala, and other tobacco related products. Currently, no notification has been issued permitting supplies to SEZ
units/developers with payment of IGST. Hence, default route of LUT without payment of IGST would only be available.
[Notification No. 1/2023–IGST Dated: 31st July, 2023]. In the 52nd GST Council, it was decided to issue a notification to
restore the facility and the details are awaited as on date.

• Notification No. 48/2023: Appoints 1st October 2023 as the date on which the provisions of the Central Goods &
Services (Amendment) Act, 2023 shall come into force.
• Notification No. 49/2023: Notifies the following supplies under Section 15(5) of the CGST Act: i. Supply of online
money gaming ii. Supply of online gaming, other than online money gaming ADVERTISEMENT iii. Supply of
actionable claims in casinos Note: Sec 15(5) empowers the Government to make valuation rules in respect of such
supplies as may be notified and the valuation mechanism prescribed under sub-section 1 to 4 of Section 15 will not
apply to such supplies.
• Notification No. 50/2023: Amends Notification No. 66/2017 – CT Dated 15.11.2017(which provides for an
exemption on advance received in case of supply of goods) to state that registered persons making a supply of
actionable claims as defined under Section 2(102A) will be liable to pay tax on advance received by them.

Notification No. 51/2023: Makes the following amendments to Central Goods & Services Tax Rules, 2017:
• Rule 8(1) lists the category of suppliers who do not need to declare information as required in Part A of Form GST
REG 01. The said rule is amended to include a person supplying online money gaming from a place outside India
to a person in India referred to in Section 14A of the IGST Actin the list of persons who need not declare
information as required in Part A of Form GST REG 01.
• Rule 14 of the said Rules is being amended to include the following: A person supplying online money gaming
from a place outside India to a person in India shall apply for registration in Form GST REG 10 on the common
portal.
• In the said rules, after Rule 31A, Rule 31B, which deals with the valuation of supply in connection with online
gaming, including online money gaming, and Rule 31C, which deals with the valuation of supply in connection
with casinos, shall be inserted.
• In the said rules, proviso to Rule 46(f) is being amended to include the following: In cases involving supply of
online money gaming to a recipient who is unregistered, irrespective of the value of such supply, a tax invoice
issued by the registered person shall contain the name of the state of the recipient and the same shall be deemed
to be the address on record of the recipient.

• Rule 64 is being substituted to state the following: 64. Form and manner of submission of return by persons
providing online information and data base access or retrieval services and by persons supplying online money
gaming from a place outside India to a person in India.- Every registered person either providing online money
gaming from a place outside India to a person in India, or providing online information and data base access or
retrieval services from a place outside India to a non-taxable online recipient referred to in section 14 of the
Integrated Goods and Services Tax Act, 2017 (13 of 2017) or to a registered person other than a non-taxable
online recipient, shall file return in FORM GSTR-5A on or before the twentieth day of the month succeeding the
calendar month or part thereof.
• Second proviso to Rule 87(3) of is being amended to include the following: A person supplying online money
gaming from a place outside India to a person in India as referred to in Section 14A of the IGST Act, may make
the deposit under sub-rule (2) through international money transfer through Society for Worldwide Interbank
Financial Telecommunication payment network.
• Necessary amendments made to Form GST REG 10 in connection with application for registration of person
supplying online money gaming from a place outside India to a person in India and Form GSTR 5A in connection
with Details of supplies of online money gaming by a person located outside India to a person in India

• Notification No. 02/2023: Appoints 1st October 2023as the date on which the provisions of the
Integrated Goods & Services (Amendment) Act, 2023 shall come into force.
• Notification No.03/2023: Notifies supply of online money gaming as goods, on import of which IGST
shall be levied on the value determined under section 15 of the Central Goods and Services Tax Act.
Further provisions of section 3 of the Customs Tariff Act, 1975 shall not apply to such imports.
• Notification No.04/2023: Notifies the Principal Commissioner of Central Tax, Bengaluru West and all
the officers subordinate to him as the officers empowered to grant registration in case of supply of
online money gaming provided or agreed to be provided by a person located in non-taxable territory and
received by a person in India

52nd GST Council Meeting Highlights
• There is an important announcement in relation to the appointment of President
and Members to the GST Council. Now the practicing advocates can also be
considered to be appointed as Member (Judicial).
• GST Council recommended to keep Extra Neutral Alcohol (ENA) which is used for
manufacture of alcohol for human consumption outside their purview.
• Some concessional rates were announced in respect of Millet based food
preparations and molasses.
• the GST Council has also recommended to exempt services of water supply, public
health, sanitation conservancy, solid waste management and slum improvement
and upgradation supplied to Governmental Authorities.
• GST Council has recommended that bus operators organised as companies may be
excluded from the purview of section 9(5) of CGST Act, 2017. This would enable
them to pay GST on their supplies using their ITC
• Supply of all goods and services by Indian Railways shall be taxed under Forward
Charge Mechanism to enable them to avail ITC.
• A clarification will be issued on the Corporate guarantees and their taxability.
• Provision for automatic restoration of provisionally attached property after
completion of one year
• A clarification was promised on the applicability of ISD and cross charge. 20

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