Changes In GST Law Effective From 1 October 2023- Part II

On 31st July, 2023, CBIC issued Notification no. 28/2023-Central Tax. The notification mentioned that the provisions of sections 137 to 162 (except sections 149 to 154) of the Finance Act, 2023 shall come into force w.e.f. 01st of October, 2023.

Also, it specified that the provisions of sections 149 to 154 of the said Act shall come into force w.e.f. 01st of August, 2023.

To understand section 137 to 139 of the Finance Act, read our blog “Effective GST Changes w.e.f. October 01, 2023- Part I”.

Let's discuss section 140 to 150 of the Finance Act, 2023 in this part!

Section 140 of the Finance Act, 2023

Section 140 deals with amendments in section 23 of the CGST Act, 2017.

Section 23 of the CGST Act, 2017 covers provisions related to Persons not liable for registration.

Earlier, its sub-section 2 stated that the Government may, on the recommendations of the Council, by notification, specify the category of persons who may be exempted from obtaining registration under this Act.

Now, it is substituted for these wordings that “Notwithstanding anything to the contrary contained in sub-section (1) of section 22 or section 24, the Government may, on the recommendations of the Council, by notification, subject to such conditions and restrictions as may be specified therein, specify the category of persons who may be exempted from obtaining registration under this Act.” This amendment is retrospectively made w.e.f. 01-07-2017.

This amendment grants an exemption to a person from taking registration in GST as per Section 22(1) of the CGST Act and compulsory registration under Section 24 of the CGST Act. It means that the following persons already exempted from compulsory registration need not obtain registration under GST:

• Person making outward supplies which are exclusively covered under RCM
• Person making supplies of services through an E-Commerce Operator having aggregate turnover not exceeding INR 20L in a Financial Year
• Person supplying handicraft goods having aggregate turnover not exceeding INR 20L in an FY
• A person making inter-state supplies of taxable services having aggregate turnover not exceeding INR 20 Lakhs in an FY, etc.

Section 141 of the Finance Act, 2023

Section 141 deals with amendments in section 30 of the CGST Act, 2017.

Section 30 of the CGST Act, 2017 covers provisions relating to the Revocation of cancellation of registration.

Sub-section 1 of the same earlier stated that Subject to such conditions as may be prescribed, any registered person, whose registration is canceled by the proper officer on his motion, may apply to such officer for revocation of cancellation of the registration in the prescribed manner within thirty days from the date of service of the cancellation order.

Now the wordings “the prescribed manner within thirty days from the date of service of the cancellation order” are substituted to “such manner, within such time and subject to such conditions and restrictions, as may be prescribed.”

Also, it had a proviso which stated that such period may, on sufficient cause being shown, and for reasons to be recorded in writing, be extended, –

1. by the Additional Commissioner or the Joint Commissioner, as the case may be, for a period not exceeding thirty days;
2. by the Commissioner, for a further period not exceeding thirty days, beyond the period specified in clause (a).

This proviso is removed by way of this amendment.

This means that the time limit of Rule 23 of the CGST Rules, 2017 is to be followed. This rule was amended by way of Notification No. 38/2023 - Central Tax dated 04.08.2023. As per this rule, a person can apply for revocation of cancellation of registration within ninety days from the date of the service of the order of cancellation of registration. Now, this time limit of 90 days will apply. Also, this time limit can be increased by the officer for a further period of 180 days.

Section 142 to 145 of the Finance Act, 2023

Section 142 deals with an amendment to section 37 of the CGST Act, 2017. Section 143 deals with an amendment to section 39 of the CGST Act, 2017. Section 144 deals with an amendment to section 44 of the CGST Act, 2017. Section 145 deals with an amendment to section 52 of the CGST Act, 2017.

Following are the provisions these sections cover:

A new provision has been inserted in all of the above-mentioned sections as follows:

“A registered person shall not be allowed to furnish a return for a tax period after the expiry of three years from the due date of furnishing the said return.

Provided that the Government may, on the recommendations of the Council, by notification, subject to such conditions and restrictions as may be specified therein, allow a registered person or a class of registered persons to furnish the return for a tax period, even after the expiry of the said period of three years from the due date of furnishing the said return.”

It means that the Registered person will not be allowed to furnish belated returns in Form GSTR-1, GSTR-3B, GSTR-8, GSTR-9, and GSTR-9C after the expiry of three years from the due date of furnishing the relevant returns.

Section 146 of the Finance Act, 2023

Section 146 deals with amendments to section 54 of the CGST Act, 2017. Section 54 of the CGST Act, 2017 covers provisions relating to Refund of Tax. Its sub-section 6 was earlier read as follows:

“Notwithstanding anything contained in sub-section (5), the proper officer may, in the case of any claim for refund on account of zero-rated supply of goods or services or both made by registered persons, other than such category of registered persons as may be notified by the Government on the recommendations of the Council, refund on a provisional basis, ninety percent. of the total amount so claimed, excluding the amount of input tax credit provisionally accepted, in such manner and subject to such conditions, limitations, and safeguards as may be prescribed and thereafter make an order under subsection (5) for final settlement of the refund claim after due verification of documents furnished by the applicant.”

By way of this amendment, the words “excluding the amount of input tax credit provisionally accepted,” are removed.

This amendment removes the reference to the provisionally accepted ITC to align the same with the scheme of availing of self-assessed ITC as per Section 41(1) of the CGST Act.

Conclusion :

The recent GST changes effective from October 1, 2023, bring noteworthy amendments to various sections of the CGST Act. Sections 140 to 150 address crucial aspects, from exemptions for specific categories under Section 140 to modifications in registration cancellation timelines under Section 141. Additionally, Sections 142 to 145 introduce a time limit of three years for furnishing returns, emphasizing timely compliance. The removal of the proviso in Section 141 streamlines the process of revoking the cancellation of registration. Lastly, Section 146's amendment in Section 54 simplifies the provisional refund process.