Key Highlights of Union Budget 2023

Changes under GST

 KEY HIGHLIGHTS OF UNION BUDGET 2023 01/02/2023

GST

GST has been a landmark reform of Independent India showcasing the spirit of Cooperative
Federalism. While aspirations were high, there were huge challenges too. These challenges were
overcome deftly and painstakingly under the guidance and oversight of the GST Council. The right
balance between facilitation and enforcement has engendered significantly better compliance.

There are certain changes proposed in the CGST Act & IGST Act in the Finance Bill, 2023, on the
basis of recommendations made by the GST Council. These changes broadly relate to
facilitation/simplification and improving compliances. These changes include raising the
minimum threshold of tax amount for launching prosecution under GST from Rs. 1 crore to Rs. 2
crores, except for the offence of issuance of invoices without the supply of goods or services or
both. The compounding amount has been reduced from the present range of 50% to 150% of the
tax amount to the range of 25% to 100%. Moreover, certain offences are decriminalized under
clauses (g), (j) and (k) of sub-section (1) of section 132 of the CGST Act, 2017. Amendments have
also been proposed in Sections 37, 39, 44, and 52 of the CGST Act, 2017 to restrict the filing of
returns viz. GSTR1, GSTR 3B, GSTR 9/9C and GSTR 8 to a maximum period of three years from the
due date of filing of the relevant return.

Following amendments proposed in the Finance Bill, 2023, vide Clause 128 to 144 except clause
no. 142, will come into effect from a date to be notified, as far as possible, concurrently with the
corresponding amendments to the similar GST Acts passed by the State(s) & Union territories
with the legislature. Further, amendments proposed in Clause no. 142 of the Finance Bill, 2023
will come into effect retrospectively from July 1, 2017.

Proposed amendments in the CGST Act, 2017

Current provisions Proposed provisions Effect
Clause 128 – Section 10 – Composition Levy
Section 10(2)(d): Section 10(2)(d): Seeks to remove the
restriction imposed on the
(d) he is not engaged in making (d) he is not engaged in registered persons engaged
any supply of goods or services making any supply of goods or in supplying goods through
through an electronic services through an electronic Electronic Commerce
commerce operator who is commerce operator who is Operators (“ECOs”) from
required to collect tax at source required to collect tax at opting to pay tax under the
under section 52; source under section 52; Composition Levy and to
enable unregistered
suppliers and composition
Section 10(2A)(c): Section 10(2A)(c): taxpayers to make intra-
state supply of goods

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(c) engaged in making any (c) engaged in making any through ECOs, subject to
supply of goods or services supply of goods or services certain conditions.
through an electronic through an electronic
commerce operator who is commerce operator who is
required to collect tax at source required to collect tax at
under section 52; source under section 52;

Clause 129 – Section 16 – Eligibility and conditions for taking input tax credit.
Second Proviso to Section Second Proviso to Section Seeks to amend second and
16(2): 16(2): third provisos of Section
16(2) of the CGST Act to
Notwithstanding anything Notwithstanding anything align with the return filing
contained in this section, no contained in this section, no system provided in the CGST
registered person shall be registered person shall be Act.
entitled to the credit of any entitled to the credit of any Further, where a recipient
input tax in respect of any input tax in respect of any fails to pay to the supplier
supply of goods or services or supply of goods or services or the amount towards the
both to him unless,–– both to him unless,–– value of supply along with
tax, within a period of 180
…………. ……………… days from the date of issue
of invoice, an amount equal
Provided further that where a Provided further that where a to the ITC availed by the
recipient fails to pay to the recipient fails to pay to the recipient, shall be paid by
supplier of goods or services or supplier of goods or services the recipient along with
both, other than the supplies or both, other than the interest payable under
on which tax is payable on supplies on which tax is Section 50 of the CGST Act.
reverse charge basis, the payable on reverse charge
amount towards the value of basis, the amount towards the Further, the recipient would
supply along with tax payable value of supply along with tax be entitled to re-avail the
thereon within a period of one payable thereon within a ITC on payment made by
hundred and eighty days from period of one hundred and him to the supplier of the
the date of issue of invoice by eighty days from the date of amount towards the value
the supplier, an amount equal issue of invoice by the of supply of goods or
to the input tax credit availed supplier, an amount equal to services or both along with
by the recipient shall be added the input tax credit availed by tax payable thereon.
to his output tax liability, along the recipient shall be paid by
with interest thereon, in such him along with interest
manner as may be prescribed: payable under section 50, in
such manner as may be
prescribed:
Third Proviso to Section 16(2): Third Proviso to Section
16(2):

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Provided also that the

Provided also that the recipient recipient shall be entitled to
shall be entitled to avail of the avail of the credit of input tax
credit of input tax on payment on payment made by him to
made by him of the amount the supplier of the amount
towards the value of supply of towards the value of supply of
goods or services or both along goods or services or both
with tax payable thereon. along with tax payable
thereon.
Clause 130 – Section 17 – Apportionment of credit and blocked credits
Section 17(3): Section 17(3): Seeks to restrict availment
of ITC in respect of certain
The value of exempt supply The value of exempt supply transactions specified in
under sub-section (2) shall be under sub-section (2) shall be para 8(a) of Schedule III of
such as may be prescribed, and such as may be prescribed, the CGST Act i.e., “Supply of
shall include supplies on which and shall include supplies on warehoused goods to any
the recipient is liable to pay tax which the recipient is liable to person before clearance for
on reverse charge basis, pay tax on reverse charge home consumption”, by
transactions in securities, sale basis, transactions in including the value of such
of land and, subject to clause securities, sale of land and, transactions in the value of
(b) of paragraph 5 of Schedule subject to clause (b) of exempt supply.
II, sale of building. paragraph 5 of Schedule II,
sale of building.
Explanation.-For the purposes
of this sub-section, the Explanation.-For the purposes
expression ‘‘value of exempt of this sub-section, the
supply’’ shall not include the expression ‘‘value of exempt
value of activities or supply’’ shall not include the
transactions specified in value of activities or
Schedule III, except those transactions specified in
specified in paragraph 5 of the Schedule III, except,–
said Schedule.
(i) the value of activities or
transactions specified in
paragraph 5 of the said
Schedule; and

(ii) the value of such activities

or transactions as may be
prescribed in respect of clause
(a) of paragraph 8 of the said
Schedule.
After Section 17(5)(f): After Section 17(5)(f): Seeks to provide that ITC
shall not be available on

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(fa) goods or services or both good/services received by

received by a taxable person, taxable person, which are
which are used or intended to used or intended to be used
be used for activities relating for activities relating to his
to his obligations under obligations under
corporate social responsibility Corporate Social
referred to in section 135 of Responsibility (“CSR”)
the Companies Act, 2013; activities referred to in
Section 135 of the
Companies Act, 2013

Clause 131 – Section 23 – Persons not liable for registration

(1) The following persons shall Notwithstanding anything to Seeks to provide overriding
not be liable to registration, the contrary contained in sub- effect to the Section 23 of
namely:–– section (1) of section 22 or the CGST Act retrospectively
section 24,–– from July 01, 2017 over
(a) any person engaged Section 22(1) or Section 24
exclusively in the business of (a) the following persons shall of the CGST Act.
supplying goods or services or not be liable to registration,
both that are not liable to tax namely:–– It means that persons
or wholly exempt from tax required to take registration
under this Act or under the (i) any person engaged in GST as per Section 22(1)
Integrated Goods and Services exclusively in the of the CGST Act and
Tax Act; business of supplying compulsory registration
goods or services or required under Section 24 of
(b) an agriculturist, to the both that are not liable the CGST Act, need not to
extent of supply of produce out to tax or wholly register themselves if they
of cultivation of land. exempt from tax under are not liable for registration
this Act or under the and/or exempted under
(2) The Government may, on Integrated Goods and Section 23(1)
the recommendations of the Services Tax Act, 2017; of the CGST Act.
Council, by notification, specify
the category of persons who (ii) an agriculturist, to
may be exempted from the extent of supply of It means that following
obtaining registration under produce out of persons need not required
this Act. cultivation of land; to take registration at all in
GST:
(b) the Government may, on
the recommendations of the 1. Any person engaged
Council, by notification, exclusively in the
subject to such conditions and business of supplying
restrictions as may be goods or services or
specified therein, specify the

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category of persons who may both that are not liable

be exempted from obtaining to tax or wholly exempt
registration under this Act. from tax under the
CGST Act or IGST Act;
2. An agriculturist, to the
extent of supply of
produce out of
cultivation of land;
3. Any person, who are
exempted by way of
notification from
obtaining registration
in the GST.

Clause 132 – Section 37 – Furnishing details of outward supplies

After Section 37(4): After Section 37(4): Seeks to insert new sub-
section (5) in Section 37 of
(5) A registered person shall the CGST Act so as to
not be allowed to furnish the provide a maximum time
details of outward supplies limit of 3 years upto which
under sub-section (1) for a tax the details of outward
period after the expiry of a supplies in Form GSTR-1 can
period of three years from the be furnished by a registered
due date of furnishing the said person, from the due date of
details: filing of such statement.

Provided that the Government Further, it also seeks to

may, on the provide an enabling
recommendations of the provision for extension of
Council, by notification, the said time limit, subject
subject to such conditions and to certain conditions and
restrictions as may be restrictions, for a registered
specified therein, allow a person or a class of
registered person or a class of registered persons.
registered persons to furnish
the details of outward
supplies for a tax period under
sub-section (1), even after the
expiry of the said period of
three years from the due date
of furnishing the said details.
Clause 133 – Section 39 – Furnishing of returns

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After Section 39(10): After Section 39(10): Seeks to insert new sub-
section (11) in Section 39 of
(11) A registered person shall the CGST Act so as to
not be allowed to furnish a provide a time limit of 3
return for a tax period after years upto which the return
the expiry of a period of three in Form GSTR-3B can be
years from the due date of furnished by a registered
furnishing the said return: person, from the due date of
filing of such return.
Provided that the Government
may, on the Further, it also seeks to
recommendations of the provide an enabling
Council, by notification, provision for extension of
subject to such conditions and the said time limit, subject
restrictions as may be to certain conditions and
specified therein, allow a restrictions, for a registered
registered person or a class of person or a class of
registered persons to furnish registered persons.
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.
Clause 134 – Section 44 – Annual return
Every registered person, other (1) Every registered person, Seeks to insert new sub-
than an Input Service other than an Input Service section (2) in section 44 of
Distributor, a person paying tax Distributor, a person paying the CGST Act, so as to
under section 51 or section 52, tax under section 51 or section provide a time limit of 3
a casual taxable person and a 52, a casual taxable person years, upto which the
non-resident taxable person and a non-resident taxable annual return in Form GSTR-
shall furnish an annual return person shall furnish an annual 9, Form GSTR-9A and Form
which may include a self- return which may include a GSTR-9B can be furnished
certified reconciliation self-certified reconciliation by a registered person, from
statement, reconciling the statement, reconciling the the due date of filing of such
value of supplies declared in value of supplies declared in return.
the return furnished for the the return furnished for the
financial year, with the audited financial year, with the Further, it also seeks to
annual financial statement for audited annual financial provide an enabling
every financial year statement for every financial provision for extension of
electronically, within such time year electronically, within the said time limit, subject
and in such form and in such such time and in such form to certain conditions and
manner as may be prescribed: and in such manner as may be restrictions, for a registered
prescribed: person or a class of
registered persons.

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Provided that the Provided that the

Commissioner may, on the Commissioner may, on the
recommendations of the recommendations of the
Council, by notification, Council, by notification,
exempt any class of registered exempt any class of registered
persons from filing annual persons from filing annual
return under this section: return under this section:

Provided further that nothing Provided further that nothing

contained in this section shall contained in this section shall
apply to any department of the apply to any department of
Central Government or a State the Central Government or a
Government or a local State Government or a local
authority, whose books of authority, whose books of
account are subject to audit by account are subject to audit
the Comptroller and Auditor- by the Comptroller and
General of India or an auditor Auditor-General of India or an
appointed for auditing the auditor appointed for auditing
accounts of local authorities the accounts of local
under any law for the time authorities under any law for
being in force. the time being in force.

(2) A registered person shall

not be allowed to furnish an
annual return under sub-
section (1) for a financial year
after the expiry of a period of
three years from the due date
of furnishing the said annual
return:

Provided that the Government

may, on the
recommendations of the
Council, by notification, and
subject to such conditions and
restrictions as may be
specified therein, allow a
registered person or a class of
registered persons to furnish
an annual return for a
financial year under sub-
section (1), even after the
expiry of the said period of

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three years from the due date

of furnishing the said annual
return.
Clause 135 – Section 52 – Collection of tax at source.
After Section 52(14): After Section 52(14): Seeks to insert new sub-
section (15) in Section 52 of
(15) The operator shall not be the CGST Act, so as to
allowed to furnish a provide a time limit of 3
statement under sub-section years upto which the
(4) after the expiry of a period statement in Form GSTR-8
of three years from the due can be furnished by an ECO,
date of furnishing the said from the due date of filing of
statement: such statement.

Provided that the Government Further, it seeks to provide

may, on the an enabling provision for
recommendations of the extension of the said time
Council, by notification, limit, subject to certain
subject to such conditions and conditions and restrictions,
restrictions as may be for an ECO or a class of ECOs.
specified therein, allow an
operator or a class of
operators to furnish a
statement under sub-section
(4), even after the expiry of
the said period of three years
from the due date of
furnishing the said statement.
Clause 136 – Section 54 – Refund of tax
Section 54(6): Section 54(6): Seeks to remove the
reference to the
Notwithstanding anything Notwithstanding anything provisionally accepted ITC to
contained in sub-section (5), contained in sub-section (5), align the same with the
the proper officer may, in the the proper officer may, in the present scheme of
case of any claim for refund on case of any claim for refund on availment of self-assessed
account of zero-rated supply of account of zero-rated supply ITC as per Section 41(1) of
goods or services or both made of goods or services or both the CGST Act.
by registered persons, other made by registered persons,
than such category of other than such category of
registered persons as may be registered persons as may be
notified by the Government on notified by the Government on
the recommendations of the the recommendations of the
Council, refund on a provisional Council, refund on a
basis, ninety per cent. of the provisional basis, ninety per

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total amount so claimed, cent. of the total amount so

excluding the amount of input claimed, excluding the
tax credit provisionally amount of input tax credit
accepted, in such manner and provisionally accepted, in such
subject to such conditions, manner and subject to such
limitations and safeguards as conditions, limitations and
may be prescribed and safeguards as may be
thereafter make an order prescribed and thereafter
under sub-section (5) for final make an order under sub-
settlement of the refund claim section (5) for final settlement
after due verification of of the refund claim after due
documents furnished by the verification of documents
applicant. furnished by the applicant.
Clause 137 – Section 56 – Interest on delayed refunds
If any tax ordered to be If any tax ordered to be Seeks to prescribe such
refunded under sub-section (5) refunded under sub-section manner and subject to such
of section 54 to any applicant is (5) of section 54 to any conditions and restrictions
not refunded within sixty days applicant is not refunded as may be prescribed for
from the date of receipt of within sixty days from the computation of period of
application under subsection date of receipt of application delay beyond 60 days from
(1) of that section, interest at under subsection (1) of that the date of receipt of refund
such rate not exceeding six per section, interest at such rate application till the date of
cent. as may be specified in the not exceeding six per cent. as refund, for the purpose of
notification issued by the may be specified in the calculation of interest on
Government on the notification issued by the delayed refunds.
recommendations of the Government on the
Council shall be payable in recommendations of the
respect of such refund from the Council shall be payable in
date immediately after the respect of such refund for the
expiry of sixty days from the period of delay beyond sixty
date of receipt of application days from the date of receipt
under the said sub-section till of such application till the
the date of refund of such tax: date of refund of such tax, to
be computed in such manner
Provided that where any claim and subject to such conditions
of refund arises from an order and restrictions as may be
passed by an adjudicating prescribed:
authority or Appellate
Authority or Appellate Tribunal Provided that where any claim
or court which has attained of refund arises from an order
finality and the same is not passed by an adjudicating
refunded within sixty days from authority or Appellate
the date of receipt of Authority or Appellate
application filed consequent to Tribunal or court which has

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such order, interest at such rate attained finality and the same
not exceeding nine per cent. as is not refunded within sixty
may be notified by the days from the date of receipt
Government on the of application filed
recommendations of the consequent to such order,
Council shall be payable in interest at such rate not
respect of such refund from the exceeding nine per cent. as
date immediately after the may be notified by the
expiry of sixty days from the Government on the
date of receipt of application recommendations of the
till the date of refund. Council shall be payable in
respect of such refund from
Explanation.––For the the date immediately after
purposes of this section, where the expiry of sixty days from
any order of refund is made by the date of receipt of
an Appellate Authority, application till the date of
Appellate Tribunal or any court refund.
against an order of the proper
officer under sub-section (5) ofExplanation.––For the
section 54, the order passed by purposes of this section,
the Appellate Authority,where any order of refund is
Appellate Tribunal or by the made by an Appellate
court shall be deemed to be an Authority, Appellate Tribunal
order passed under the said or any court against an order
sub-section (5). of the proper officer under
sub-section (5) of section 54,
the order passed by the
Appellate Authority, Appellate
Tribunal or by the court shall
be deemed to be an order
passed under the said sub-
section (5).
Clause 138 – Section 122 – Penalty for certain offences.
After Section 122(1A): After Section 122(1A): Seeks to insert new sub-
section (1B) in Section 122
(1B) Any electronic commerce of the CGST Act so as to
operator who–– provide for penal provisions
(i) allows a supply of goods or applicable to ECO in case of
services or both through it by contravention of provisions
an unregistered person other relating to supplies of goods
than a person exempted from made through them by
registration by a notification unregistered persons or
issued under this Act to make composition taxpayers.
such supply;

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(ii) allows an inter-State

supply of goods or services or
both through it by a person
who is not eligible to make
such inter-State supply; or
(iii) fails to furnish the correct
details in the statement to be
furnished under sub-section
(4) of section 52 of any
outward supply of goods
effected through it by a
person exempted from
obtaining registration under
this Act, shall be liable to pay
a penalty of ten thousand
rupees, or an
amount equivalent to the
amount of tax involved had
such supply been made by a
registered person other than a
person paying tax under
section 10, whichever is
higher.
Clause 139 – Section 132 – Punishment for certain offences
Section 132(1): Section 132(1): Seeks to amend Sub-section
(1) of section 132 of the
Whoever commits, or causes to Whoever commits, or causes CGST Act, so as to
commit and retain the benefits to commit and retain the decriminalize offences
arising out of, any of the benefits arising out of, any of specified in clauses (g), (j)
following offences, namely:- the following offences, and (k) of the
namely:- said sub-section as
……………. prescribed below -

• obstructs or prevents
(g) obstructs or prevents any (g) obstructs or prevents any any officer in the
officer in the discharge of his officer in the discharge of his
discharge of his duties
duties under this Act; duties under this Act; under this Act;
• tampers with or destroys
………………… ………………..
any material evidence or
documents;
(j) tampers with or destroys (j) tampers with or destroys
any material evidence or any material evidence or • fails to supply any
documents; documents; information which he is

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required to supply under

(k) fails to supply any (k) fails to supply any the CGST Act or the CGST
information which he is information which he is rules made thereunder
required to supply under this required to supply under this or supplies false
Act or the rules made Act or the rules made information; or
thereunder or (unless with a thereunder or (unless with a
reasonable belief, the burden reasonable belief, the burden Further, clause (iii) of
of proving which shall be upon of proving which shall be upon Section 132(1) of the CGST
him, that the information him, that the information Act has been amended to
supplied by him is true) supplies supplied by him is true) reduce monetary threshold
false information; or supplies false information; or from one crore to two crore
for launching prosecution,
(l) attempts to commit, or (l) attempts to commit, or except for “an offence
abets the commission of any of abets the commission of any specified in clause (b) of
the offences mentioned in of the offences mentioned in Section 132(1) of the CGST
clauses (a) to (k) of this section, clauses (a) to (f) and clauses Act ” i.e. issues any invoice
(h) and (i) of this section, or bill without supply of
shall be punishable–– shall be punishable–– goods or services or both in
violation of the provisions of
(i) in cases where the (i) in cases where the this Act, or the rules made
amount of tax evaded amount of tax evaded thereunder leading to
or the amount of input or the amount of input wrongful availment or
tax credit wrongly tax credit wrongly utilisation of input tax credit
availed or utilised or the availed or utilised or or refund of tax;
amount of refund the amount of refund
wrongly taken exceeds wrongly taken exceeds Thus, for fake invoices, the
five hundred lakh five hundred lakh prosecution will continue as
rupees, with rupees, with for threshold amount of Rs.
imprisonment for a imprisonment for a 1 Crore.
term which may extend term which may
to five years and with extend to five years
fine; and with fine;

(ii) in cases where the (ii) in cases where the

amount of tax evaded amount of tax evaded
or the amount of input or the amount of input
tax credit wrongly tax credit wrongly
availed or utilised or the availed or utilised or
amount of refund the amount of refund
wrongly taken exceeds wrongly taken exceeds
two hundred lakh two hundred lakh
rupees but does not rupees but does not
exceed five hundred exceed five hundred
lakh rupees, with lakh rupees, with

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imprisonment for a imprisonment for a

term which may extend term which may
to three years and with extend to three years
fine; and with fine;

(iii) in the case of any (iii) in the case of an

other offence where the offence specified in
amount of tax evaded clause (b) where the
or the amount of input amount of tax evaded
tax credit wrongly or the amount of input
availed or utilised or the tax credit wrongly
amount of refund availed or utilised or
wrongly taken exceeds the amount of refund
one hundred lakh wrongly taken exceeds
rupees but does not one hundred lakh
exceed two hundred rupees but does not
lakh rupees, with exceed two hundred
imprisonment for a lakh rupees, with
term which may extend imprisonment for a
to one year and with term which may
fine; extend to one year and
with fine;
(iv) in cases where he
commits or abets the (iv) in cases where he
commission of an commits or abets the
offence specified in commission of an
clause (f) or clause (g) offence specified in
or clause (j), he shall be clause (f) or clause (g)
punishable with or clause (j), he shall
imprisonment for a be punishable with
term which may extend imprisonment for a
to six months or with term which may
fine or with both. extend to six months
or with fine or with
both.
Clause 140 – Section 138 – Compounding of offences
Section 138(1): Section 138(1): Seeks to amend to sub-
section (1) of section 138 of
Any offence under this Act may, Any offence under this Act the CGST Act , so as to:
either before or after the may, either before or after the • Exclude the persons
institution of prosecution, be institution of prosecution, be involved in offence
compounded by the compounded by the relating to the issuance
Commissioner on payment, by Commissioner on payment, by

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the person accused of the the person accused of the of invoices without the
offence, to the Central offence, to the Central supply of goods or
Government or the State Government or the State services or both from the
Government, as the case be, of Government, as the case be, option of compounding
such compounding amount in of such compounding amount of the offences.
such manner as may be in such manner as may be
prescribed: prescribed:
• Reduce the amount for
Provided that nothing Provided that nothing compounding of various
contained in this section shall contained in this section shall offences except offence
apply to- apply to- of fake invoice, by
reducing the minimum
(a) a person who has been (a) a person who has been and maximum amount
allowed to compound once in allowed to compound once in for compounding.
respect of any of the offences respect of any of the offences
specified in clauses (a) to (f) of specified in clauses (a) to (f),
sub-section (1) of section 132 (h), (i) and (l) of sub-section (1) Now the minimum amount
and the offences specified in of section 132; prescribed is 25% to 100% of
clause (l) which are relatable to the tax amount involved
offences specified in clauses (a) (b) a person who has been from 50% to 150% of tax
to (f) of the said sub-section; allowed to compound once in amount involved.
respect of any offence, other
(b) a person who has been than those in clause (a), under Existing Compounding
allowed to compound once in this Act or under the Amount: Rs. 20,000
respect of any offence, other provisions of any State Goods (CGST+SGST) or 50% to
than those in clause (a), under and Services Tax Act or the 150% of tax amount,
this Act or under the provisions Union Territory Goods and whichever is higher,
of any State Goods and Services Tax Act or the
Services Tax Act or the Union Integrated Goods and Services Proposed Compounding
Territory Goods and Services Tax Act in respect of supplies Amount: 20,000 or 25% to
Tax Act or the Integrated of value exceeding one crore 100% of tax amount
Goods and Services Tax Act in rupees; involved, whichever is
respect of supplies of value higher.
exceeding one crore rupees; (c) a person who has been
accused of committing an
(c) a person who has been offence under clause (b) of
accused of committing an sub-section (1) of section 132;
offence under this Act which is
also an offence under any other (d) a person who has been
law for the time being in force; convicted for an offence under
this Act by a court;
(d) a person who has been
convicted for an offence under (e) a person who has been
this Act by a court; accused of committing an

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offence specified in clause (g)

(e) a person who has been or clause (j) or clause (k) of
accused of committing an sub-section (1) of section 132;
offence specified in clause (g) and
or clause (j) or clause (k) of sub-
section (1) of section 132; and (f) any other class of persons
or offences as may be
(f) any other class of persons or prescribed:
offences as may be prescribed:
Provided further that any
Provided further that any compounding allowed under
compounding allowed under the provisions of this section
the provisions of this section shall not affect the
shall not affect the proceedings, if any, instituted
proceedings, if any, instituted under any other law:
under any other law:
Provided also that
Provided also that compounding shall be allowed
compounding shall be allowed only after making payment of
only after making payment of tax, interest and penalty
tax, interest and penalty involved in such offences.
involved in such offences.
Section 138(2): Section 138(2):

The amount for compounding The amount for compounding

of offences under this section of offences under this section
shall be such as may be shall be such as may be
prescribed, subject to the prescribed, subject to the
minimum amount not being minimum amount not being
less than ten thousand rupees less than twenty-five per cent.
or fifty per cent. of the tax of the tax involved and the
involved, whichever is higher, maximum amount not being
and the maximum amount not more than one hundred per
being less than thirty thousand cent of the tax involved.
rupees or one hundred and fifty
per cent. of the tax, whichever
is higher.
Clause 141 – Section 158A – Consent based sharing of information furnished by taxable
person
Section 158A Section 158A: A new section 158A in the
CGST Act is being inserted so
(1) Notwithstanding anything as to
contained in sections 133, 152
and 158, the following details

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furnished by a registered provide for prescribing

person may, subject to the manner and conditions for
provisions of subsection (2), sharing of the
and on the recommendations information furnished by
of the Council, be shared by the registered person:
the common portal with such - in his return or
other systems as may be - in his application of
notified by the Government, in registration or
such manner and subject to - in his statement of
such conditions as may be outward supplies, or
prescribed, namely:–– - the details uploaded by
(a) particulars
him for generation of
furnished in the
electronic invoice or
application for
registration under - E- way bill or
section 25 or in the - any other details, as
return filed under may be prescribed, on
section 39 or under the common portal
section 44; with such other
(b) the particulars systems, as may be
uploaded on the notified.
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;
(c) such other details
as may be prescribed.
(2) For the purposes of sharing
details under sub-section
(1), the consent shall be
obtained, of ––

(a) the supplier, in

respect of details
furnished under
clauses (a), (b) and (c)
of sub-section (1); and

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(b) 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.”
Retrospective Changes in Schedule III (Para 7, 8(a) and 8(b) and Explanation 2
Clause 142 of the Finance Bill, 2023:

Schedule III of the CGST Act is being amended to give retrospective applicability to Para 7, 8 (a)
and 8 (b) of the said Schedule, with effect from July 01, 2017, so as to treat the activities/
transactions mentioned in the said paragraphs as neither supply of goods nor supply of
services.
It is also being clarified that where the tax has already been paid in respect of such
transactions/ activities during the period from July 01, 2017 to January 31, 2019, no refund of
such tax paid shall be available.

Note: Paragraphs 7 and 8 (a) and 8 (b) was inserted to keep certain transactions/ activities,
such as supplies of goods from a place outside the taxable territory to another place outside
the taxable territory, high sea sales and supply of warehoused goods before their home
clearance.

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However, it has been proposed that, no refund of tax paid shall be available in cases where any
tax has already been paid in respect of such transactions/ activities during the period July 01,
2017 to January 31, 2019.

Further, as per proposed changes in Section 17(3) of the CGST Act it restricts the ITC which
needs to be reversed in para 8(a) of Schedule III of the CGST Act i.e., “Supply of warehoused
goods to any person before clearance for home consumption,” by including the value of such
transactions in the value of exempt supply.

Proposed amendments in the IGST Act, 2017

Current provisions Proposed provisions Effect
Clause 143 – Section 2 – Definitions
Section 2(16): Section 2(16):
Clause (16) oreceipt of of
“non-taxable online recipient” “non-taxable online recipient” the IGST Act is being
means any Government, local means any unregistered amended so as torevise the
authority, governmental person receiving online definition of “non-taxable
authority, an individual or any information and database online recipient” by
other person not registered access or retrieval services removing the condition of
and receiving online located in taxable territory. receipt of online
information and database information and database
access or retrieval services in Explanation.––For the access or retrieval services
relation to any purpose other purposes of this clause, the (OIDAR) for purposes other
than commerce, industry or expression “unregistered than commerce, industry or
any other business or person” includes a person any other business or
profession, located in taxable registered solely in terms of profession so as to provide
territory. clause (vi) of section 24 of the for taxability of OIDAR
Central Goods and Services service provided by any
Explanation.––For the Tax Act, 2017 person located in non-
purposes of this clause, the taxable territory to an
expression “governmental unregistered person
authority” means an authority receiving the said services
or a board or any other body,– and located in the taxable
– territory.

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(i) set up by an Act of Further, it also seeks to

Parliament or a State clarify that the persons
Legislature; or registered solely in terms of
clause (vi) of Section 24 of
(ii) established by any CGST Act shall be treated as
Government, unregistered person for the
purpose of the said clause.
with ninety per cent. or more
participation by way of equity
or control, to carry out any
function entrusted to a
Panchayat under article 243G
or to a municipality under
article 243W of the
Constitution;
Section 2(17): Section 2(17): Seeks to amend clause (17)
of Section 2 of IGST Act so as
“online information and “online information and to remove the condition of
database access or retrieval database access or retrieval "essentially automated" and
services” means services whose services” means services "involving minimal human
delivery is mediated by whose delivery is mediated by intervention" from the said
information technology over information technology over definition.
the internet or an electronic the internet or an electronic
network and the nature of network and the nature of
which renders their supply which renders their supply
essentially automated and essentially automated and
involving minimal human involving minimal human
intervention and impossible to intervention and impossible to
ensure in the absence of ensure in the absence of
information technology and information technology and
includes electronic services includes electronic services
such as,–– such as,––

(i) advertising on the (i) advertising on the

internet; internet;

(ii) providing cloud (ii) providing cloud

services; services;

(iii) provision of e- (iii) provision of e-

books, movie, music, books, movie, music,
software and other software and other
intangibles through intangibles through

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KEY HIGHLIGHTS OF UNION BUDGET 2023 01/02/2023

telecommunication telecommunication
networks or internet; networks or internet;

(iv) providing data or (iv) providing data or

information, information,
retrievable or retrievable or
otherwise, to any otherwise, to any
person in electronic person in electronic
form through a form through a
computer network; computer network;

(v) online supplies of (v) online supplies of

digital content (movies, digital content
television shows, music (movies, television
and the like); shows, music and the
like);
(vi) digital data
storage; and” (vi) digital data
storage; and
(vii) online gaming;

Clause 144 – Section 12 - Place of supply of services where location of supplier and
recipient is in India
Section 12(8): Section 12(8):
Proviso to sub-section (8) of
(8) The place of supply of (8) The place of supply of section 12 of the IGST Act is
services by way of services by way of being omitted so as to
transportation of goods, transportation of goods, specify the place of supply,
including by mail or courier to,– including by mail or courier irrespective of destination
– to,–– of the goods, in cases where
the supplier of services and
(a) a registered person, shall be (a) a registered person, shall recipient of services are
the location of such person; be the location of such person; located in India.

(b) a person other than a (b) a person other than a

registered person, shall be the registered person, shall be the
location at which such goods location at which such goods
are handed over for their are handed over for their
transportation. transportation.

Provided that where the Provided that where the

transportation of goods is to a transportation of goods is to a
place outside India, the place of place outside India, the place

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 KEY HIGHLIGHTS OF UNION BUDGET 2023 01/02/2023

supply shall be the place of of supply shall be the place of

destination of such goods. destination of such goods.

a. CGST Act means Central Goods and Services Tax Act, 2017
b. IGST Act means Integrated Goods and Services Tax Act, 2017
c. UTGST Act means Union Territory Goods and Services Tax Act, 2017

Hope the information will assist you in your Professional endeavours. In case of any query/
information, please do not hesitate to write back to us.

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About us:
A2Z Taxcorp LLP is a boutique Indirect Tax firm having its offices at New Delhi and Guwahati
specializing in GST, Central Excise, Custom, Service Tax, VAT, DGFT, Foreign Trade Policy, SEZ, EOU,
Export – Import Laws, Free Trade Policy, etc. It is a professionally managed firm having a team of
experienced and distinguished Chartered Accountants, Company Secretary, Lawyers, Corporate
Financial Advisors and Tax consultants to provide various services like litigation and representation,
transaction advisory, diagnostic reviews/ health checks, audit defense & protection, retainership &
compliance, configuration of tax efficient business model etc. Its clientele consists mainly of Foreign
MNC, large/mid-sized Indian companies which includes exporters, FMCG, consumer durables,
automobiles, aerated beverages, ceramic tiles, real-estate, hospitality, etc.

Thanks & Best Regards, Our Address:

A2Z TAXCORP LLP
Bimal Jain Tax and Law Practitioners
FCA, FCS, LLB, B. Com (Hons)
Author of a book on Goods and Services Tax, Flat No. 34B,
Ground Floor, Pocket – 1,
titled, “GST Law and Commentary (with
Mayur Vihar Phase-1
Analyses and Procedures)” [7th Edition] Delhi – 110091 (India)
Email: [email protected] Tel: +91 11 42427056
Connect With Us: Web: www.a2ztaxcorp.com

2C, 2nd Floor, City Trade Centre,

A.T. Road, Guwahati - 781001
Email: [email protected]

DISCLAIMER: The views expressed are strictly of the author and A2Z Taxcorp LLP. The contents
of this weekly newsletter are solely for informational purpose. It does not constitute
professional advice or recommendation of firm. Neither the author nor firm and its affiliates
accepts any liabilities for any loss or damage of any kind arising out of any information in this
weekly newsletter nor for any actions taken in reliance thereon.

©A2Z TAXCORP LLP 22