What are the latest updates on GST applicable from 1st October 2023?

Introduction

As of October 1, 2023, the Finance Act, 2023, brought in some crucial changes to the Goods & Services Tax (GST). These changes aim to reshape the tax scenario for online gaming, the Input Tax Credit (ITC), and the composition scheme.  In this blog, we will discuss some of the GST latest updates or news in a way that is easy to understand.

What are the recent changes in the Goods and Services Tax (GST) Law?

The following are the recent changes in GST law that are effective from 1st October 2023:

1. The composition scheme is extended to e-commerce operators

Earlier, registered individuals who were engaged in supplying goods through an E-Commerce Operator (ECO) did not have access to the Composition Scheme’s benefits under GST, which have now been extended to them. However, those who provide services on e-commerce platforms still have some restrictions.

2. Payment by the supplier within 180 days

The recent GST changes or amendments in the payment by suppliers states that if someone gets a bill for goods or services and doesn’t pay to the supplier within 180 days, they have to give back the tax credit they have received. Plus, they need to pay interest as per Section 50 of the CGST Act.

3. Extension of time for revocation of cancelled registration

The government has increased the time limit for submitting an application for revocation of a canceled GST registration from 30 days to 90 days from the date of the cancellation order. Moreover, it is now possible to ask for an extension of up to 180 days if there are valid reasons for it. The request can be made to the Commissioner or an authorized officer of a similar or higher rank (Additional Commissioner or Joint Commissioner). They must give written reasons for granting the extension.

4. Time limitation for filing GST Returns

A person who is a registered taxpayer must file their returns, such as GSTR-1, GSTR-3B, GSTR-9, and GSTR-8, within three years from the date when they were supposed to submit those returns. After the expiration of three years, taxpayers will not be allowed to file those returns, as per the GST latest news.

5. 28% GST on online gaming

From October 1, 2023, any money you put into online gambling, casinos, or the purchase of chips will be subject to a 28% GST. After six months, the GST Council will assess the effectiveness of this new tax regulation for online gaming and casinos.

6. Assessment of unregistered taxpayers

The government has extended the time limit for submitting Form GSTR 3B or GSTR 10 (final return) from 30 days to 60 days in cases of withdrawal of the Best Judgment Assessment order. If required, you can extend this 60-day period to 120 days, but you will have to pay additional late fees on top of the standard late fee.

7. Sharing of information with taxpayer’s consent

This new change allows taxpayers to decide whether they want to share the information they provide (for example, during registration, return filing, creating e-invoices, e-Waybills, or any other necessary documents) on the common GST portal with other systems. In simpler terms, you have control over who can see your tax-related details, and you can give permission for this sharing according to the latest GST news.

8. Zero-rated Supplies to SEZ

This change removes the uncertainty about the eligibility of supplies for zero-rated status. It ensures that only supplies intended for authorized operations within a Special Economic Zone (SEZ) unit or by a developer will be considered zero-rated. In the past, suppliers in the Domestic Tariff Area (DTA) had to get approval from the designated SEZ officer to claim a refund of Input Tax Credit (ITC) or Integrated Goods and Services Tax (IGST). Now, this requirement is incorporated into the official rules, ensuring that it cannot be challenged by an individual as it goes against the law.

9. Higher monetary limit for criminal offense

The government has increased the threshold limit for converting a tax violation into a criminal offense. If the amount of tax involved in the violation exceeds Rs. 2 crores, it will be considered as a criminal offense. Previously, this threshold limit was Rs. 1 crore. It is important to note that the threshold limit remains Rs. 1 crore for cases related to fake invoices for claiming input tax credit, as per the latest updates in GST.

10. Amendments in ODIAR services

According to the latest GST amendments, if you offer online services to individuals in India and you are not based here, you must register, collect, and pay Goods and Services Tax (GST). These services are called Online Information Data Access Retrieval (OIDAR) services. OIDAR services are those that are provided via the Internet or an electronic network and are primarily automated with minimal human intervention. The Finance Act, 2023 made some changes to these rules, which are:

• It eliminated the criteria that previously specified that services should primarily be computer-driven and involve minimal human intervention. As a result, services that were previously exempt from GST now might be subject to it. Now, any service that relies on the internet or an electronic network falls under the OIDAR service category.

• The Act also changed the definition of “non-taxable online recipient.” Now, it includes individuals who receive these services and are registered for GST solely to avail of the tax deduction at the source. Previously, this category only covered unregistered individuals, regular customers, and public bodies.

11. Interest will be applied to delayed refunds

When applying for a refund, if it takes more than 60 days to process, you are entitled to receive extra money known as ‘interest’ as compensation for the delay. However, certain circumstances may not be included when calculating this delay:

• If you receive a notice (referred to as FORM GST RFD-08) and take more than 15 days to respond (using FORM GST RFD-09) or submit additional documents, those days will not be considered in the delay calculation as per the amendments in GST Law.
• If there’s an issue with depositing the refund into your bank account due to incorrect details provided by you, the time taken to rectify this error will not be counted as a delay.

12. Changes in place of supply of goods transportation

The GST rule regarding the determination of the place for transporting goods has been modified. Previously, if both the sender and receiver of the goods were in India, the place was determined in a specific manner. However, the revised rule states that the location of the goods receiver will now be the deciding factor. This change applies only if the receiver is a registered person as per the amendments in GST law.

Key Takeaways

Starting in October 2023, there are some amendments in GST law. It is important for businesses and individuals who pay taxes to be aware of these changes. The objective behind these changes is to simplify the rules, reduce confusion, and make it easier to comply with the Goods and Services Tax regulations in India. To follow these new rules and get the most benefit from them, it’s a good idea for taxpayers to talk to tax experts and stay updated on GST latest news.