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

On 31st July, 2023, CBIC issued Notification no. 28/2023-Central Tax. It was mentioned in the said notification 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 sections 137 to 139 of the Finance Act, read our blog “Effective GST Changes w.e.f. October 01, 2023- Part I”.

To understand sections 140 to 146 of the Finance Act, 2023, read our blog “Effective GST Changes w.e.f. October 01, 2023- Part II”.

To understand sections 147 to 156 of the Finance Act, 2023, read our blog “Effective GST Changes w.e.f. October 01, 2023- Part III”.

Let's discuss sections 157 to 159 of the Finance Act, 2023 in this part!

Section 157 of the Finance Act, 2023

Section 157 deals with amendments in section 138 of the CGST Act, 2017.

Section 138 of the CGST Act, 2017 covers provisions related to the Compounding of offences.

Section 138(1) states that any offence under this Act may, either before or after the institution of prosecution, be compounded by the Commissioner on payment, by the person accused of the offence, to the Central Government or the State Government, as the case be, of such compounding amount in such manner as may be prescribed. However, it has a proviso that covers offenses not eligible for compounding.

This amendment adds clause (i) of section 132(1) to such list of offenses not eligible for compounding. This clause covers the offence of receiving or is in any way concerned with the supply of, or in any other manner deals with any supply of services which he knows or has reasons to believe are in contravention of any provisions of this Act or the rules made thereunder.

Further, it has made some other changes in the list of offenses not eligible for compounding.

Also, compounding fees are reduced as follows:

Section 158 of the Finance Act, 2023

Section 158 deals with the insertion of section 158A to the CGST Act, 2017.

Section 158A of the CGST Act, 2017 covers provisions related to the Consent based sharing of information furnished by taxable persons.

This section is as follows:

Consent-based sharing of information furnished by a taxable person 158A.

1. Notwithstanding anything contained in sections 133, 152, and 158, the following details furnished by a registered person may, subject to the provisions of sub-section (2), and on the recommendations of the Council, be shared by the common portal with such other systems as may be notified by the Government, in such manner and subject to such conditions as may be prescribed, namely:-
   1. particulars furnished in the application for registration under section 25 or in the return filed under section 39 or under section 44.
   2. the particulars uploaded on the common portal for preparation of invoice, the details of outward supplies furnished under section 37, and the particulars uploaded on the common portal for generation of documents under section 68.
   3. such other details as may be prescribed.
2. For the purposes of sharing details under sub-section (1), the consent shall be obtained, of-
   1. the supplier, in respect of details furnished under clauses (a), (b) and (c) of sub-section (1); and
   2. the recipient, in respect of details furnished under clause (b) of sub-section (1), and under clause (c) of sub-section (1) only where such details include identity information of the recipient, in such form and manner as may be prescribed.
3. Notwithstanding anything contained in any law for the time being in force, no action shall lie against the Government or the common portal with respect to any liability arising consequent to information shared under this section and there shall be no impact on the liability to pay tax on the relevant supply or as per the relevant return.".
   
   This new provision allows the sharing of information or details furnished by the taxpayers (viz. particulars in the registration application, returns or e-invoice or e-Waybill, or any other as may be prescribed) on the GST Common portal, with other systems upon taxpayer's consent.

Section 159 of the Finance Act, 2023

Section 159 deals with retrospective exemption to certain activities and transactions in Schedule III to the CGST Act, 2017.

It is stated in the amendment that in Schedule III to the Central Goods and Services Tax Act, paragraphs 7 and 8 and the Explanation 2 thereof (as inserted vide section 32 of Act 31 of 2018) shall be deemed to have been inserted therein with effect from the 1st day of July 2017.

Paragraph 7 of Schedule III covers the supply of goods from a place in the non-taxable territory to another place in the non-taxable territory without such goods entering into India.

Paragraph 8 of Schedule III covers the supply of warehoused goods to any person before clearance for home consumption.

Both these entries should have the effect of exemption from July 01, 2017. This is amended to put an end to ongoing litigations or prospective litigations in cases wherein no tax is paid by any taxpayer on these supplies.

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 01, 2017, to January 31, 2019.

Conclusion

We have discussed amendments in section 138, 158A, and Schedule III of the CGST Act, 2017 in this part. Section 160 to 162 of the Finance Act will be covered in Part V of this blog named “Effective GST Changes w.e.f. October 01, 2023- Part V”. Stay tuned with LogiTax for such updates!