Finance Minister has expressed that India is in a rare position of optimism and positivity about future growth. India continues to be the fastest growing economy. According to MoF, improved monsoon, strong fiscal performance and higher capex by public-private sectors suggests for Indian macroeconomic stability and growth. However, negative cross border spillovers and any adverse global events could act as a deterrent in higher growth in the current or next fiscal.
According to S & P global, Indian economy is likely to grow by an average of 6.7% till financial year 2030-31. It will also remain the fastest growing economy among G-20 nations in financial year 2024. Private sector investment and corporate profits are likely to be on a rise which would imply higher tax revenues too.
In its bi-monthly monetary policy review, Reserve Bank of India has focused on inflation with a forecast to 5.4% for financial year 2025. RBI has asked banks to keep a 10% of incremental deposits as a temporary cash reserve and has kept interest rates unchanged.
The 51st meeting of GST Council was held on 2nd August, 2023 with the main agenda of taxing online gaming and actionable claims. The GST Council recommended certain amendments in the CGST Act 2017 and IGST Act 2017, including amendment in Schedule III of CGST Act, 2017, to provide clarity on the taxation of supplies in casinos, horse racing and online gaming. The Council also recommended to insert a specific provision in IGST Act, 2017 to provide for liability to pay GST on the supply of online money gaming by a supplier located outside India to a person in India, for single registration in India for the said supplier through a simplified registration scheme and also for blocking of access by the public to any information generated, transmitted, received or hosted in any computer resource used for supply of online money gaming by such supplier in case of failure to comply with provisions of registration and payment of tax. It was also decided by the Council that effort will be made to complete the process of making amendments in the Act at the earliest and bring the amendments into effect from 1st October 2023.
Finance Minister has introduced CGST Act (Amendment) Bill, 2023 and IGST Act (Amendment) Bill 2023 in the Parliament on 11th August, 2023 to implement decisions of GST Council to levy 28% tax on online gaming. Both the Bills have been passed by the Lok Sabha on same day. This will come into effect from a notified date. It provides for defining online gaming, registration and change in scope of supply (Schedule III) etc. Similar changes are stipulated in IGST Act, 2017. It is expected that all the states will also make the necessary amendments in state GST laws in next two months in the ongoing monsoon sessions or by way of as Ordinance on online gaming. It is expected to raise about Rs. 2000 crore of tax revenue which is expected to be levied from 1st October, 2023.
Further new notifications, viz Notification Nos. 36 to 38, all dated 04.08.2023 have been issued to implement decisions of GST Council. These relate to prescribing special procedure to be followed by e-commerce operators in respect of supplies of goods through them by dealers under composition scheme, special procedure to be followed by e-commerce operator in respect of supplies of goods through them by unregistered persons and amendment in CGST rules. Few CGST Rules have been amended in relation to returns, registration, physical verification of business premises, manner of dealing with difference in input tax credit (ITC) between GSTR-2B and GSTR-3B, intimation of certain amounts liable to be recovered u/s 79, consent based sharing of information etc.
Mr. Sanjay Agarwal, IRS, has been appointed as new Chairman of CBIC on 5th August, 2023.
CGST (Amendment) Bill, 2023
- The Bill proposes the following :
- It provides for defining online gaming [section 2 (80A)], online money gaming [section 2 (80B)], specified actionable claim [section 2 (102A)] and virtual digital asset [section 2 (117A)]
- It amends definition of supplier in section 2(105) to provide clarity on who is supplier in case of supply of specified actionable claim
- It provides for mandatory registration of the person for supplying online money gaming from a place outside India to a person in India (section 24)
- In Schedule III, ‘lottery, betting and gambling’, shall be substituted by ‘specified actionable claims’.
- These shall be effective after enactment from a notified date.
(Source: CGST (Amendment) Bill, 2023, 51st GST Council meeting recommendations)
IGST (Amendment) Bill, 2023
- Defines online gaming [section 2(17)]
- Scope of section 5 on ‘integrated tax on goods’ is proposed to be changed to provide ‘goods other than goods as may be notified …’
- Place of supply to any unregistered person to be location of supplier where address of such person is not recorded in the invoice (section 10)
- Provide for special provision for specified actionable claims (online gaming) supplied by a person located outside the taxable territory to a person located in India [Section 14A]
- Provide for special provision of requirement of taking single registration under a simplified scheme, payment of integrated tax on online gaming and blocking of access by the public to any information used for such supplier in case of non- compliance of registration or non-payment of tax [Section 14A].
- This shall be effective after enactment from a date to be notified later.
There is a likelihood of the GST being levied @ 28% w.e.f. 01.10.2023.
(Source: IGST (Amendment) Bill, 2023, 51st GST Council meeting recommendations)
Special procedure for E-commerce Operators for supplies made through persons under Composition
- E-commerce operators have been notified to collect tax at source (TCS) under section 52 of CGST Act to be the class of persons who shall follow the following special procedure in respect of supply of goods made through it by the persons paying tax in composition scheme under section 10 of the CGST Act
- The special procedure involves the following:
- the electronic commerce operator shall not allow any inter-State supply of goods through it by the said person;
- the electronic commerce operator shall collect tax at source under sub-section (1) of section 52 of the said Act in respect of supply of goods made through it by the said person and pay to the Government as per section 52 (3) of the CGST Act; and
- the electronic commerce operator shall furnish the details of supplies of goods made through it by the said person in the statement in FORM GSTR-8 electronically on the common portal.
- This shall be effective from 01.10.2023.
(Source: Notification No. 36/2023-Central Tax dated 04.08.2023)
Special Procedure for E-commerce Operators collecting TCS and making supply of goods through exempted persons
- CBIC has notified the special procedure to be followed by the electronic commerce operators who are required to collect tax at source under section 52 as the class of persons who shall follow the following special procedure in respect of supply of goods made through it by the persons exempted from obtaining registration in terms of Notification No. 34/2023-CT dated 31.07.2023.
- CBIC has notified vide Notification No. 34/2023-CT dated 31.07.2023, exemption from obtaining registration under section 22(1) of CGST Act, 2017 to persons making supplies of goods through e-commerce operators, who is required to collect tax at source under section 52 of CGST Act, 2017 and who is having aggregate turnover in preceding financial year and in current financial year not exceeding the amount of aggregate turnover above which supplier is liable to be registered.
- The special procedure involves the following :
- the electronic commerce operator shall allow the supply of goods through it by the said person only if enrolment number has been allotted on the common portal to the said person;
- the electronic commerce operator shall not allow any inter-State supply of goods through it by the said person;
- the electronic commerce operator shall not collect tax at source under section 52(1) in respect of supply of goods made through it by the said person; and
- the electronic commerce operator shall furnish the details of supplies of goods made through it by the said person in the statement in FORM GSTR-8 electronically on the common portal.
- Where multiple e-commerce operators are involved in a single transaction through E-com Platform, “electronic commerce operator” shall mean the electronic commerce operator who finally releases the payment to the said person for supply made by the said person through him.
- This shall be effective from 01. 10.2023.
(Source: Notification No. 37/2023-Central Tax dated 04.08.2023)
Amendments in CGST Rules
- CBIC has notified amendments in Rules vide CGST (Second Amendment) Rules, 2023.
- Following rules / forms have been amended / inserted :
|
Rule / Forms
|
Relating to
|
|
9 (1)
|
Verification of registration application
|
|
10A
|
Furnishing of bank account details
|
|
21A
|
Suspension of registration
|
|
23*
|
Revocation of cancellation of registration
|
|
25
|
Physical verification of business premises in certain cases
|
|
43*
|
Manner of determination of ITC in respect of capital goods and reversal thereof
|
|
46
|
Tax invoice
|
|
59
|
Form and manner of furnishing details of outward supplies
|
|
64*
|
Form and manner of suppression of returns by person providing OIDAR services
|
|
67*
|
Form and manner of submission of statement of supplies through
E-com operator
|
|
88D(new)
|
Manner of dealing with difference in input tax credit available in auto-generated statement containing the details of input tax credit and that availed in return
|
|
89
|
Application for refund of tax etc
|
|
94*
|
Credit of amount of rejected refund claim
|
|
96
|
Refund of IGST paid on goods or services exported out of India
|
|
108
|
Appeal to Appellate Authority
|
|
109
|
Application to Appellate Authority
|
|
138F (new)
|
Information to be furnished in case of intra-State movement of gold, precious stones, etc. and generation of e-way bills thereof
|
|
142 B (new)
|
Intimation of certain amounts liable to be recovered under section 79 of the Act
|
|
162*
|
Procedure for compounding of offences
|
|
163 (new)*
|
Consent based sharing of information
|
|
Form GSTR 3A
|
Form GSTR 9C
|
|
Form GSTR 5A*
|
Form GST-RFDI
|
|
Form GSTR 8A*
|
Form DRC 01C (new)
|
|
Form GSTR 9
|
Form DRC 01D (new)
|
*W.e.f. 01.10.2023
(Source: Notification No. 38/2023-Central Tax dated 04.08.2023)
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