Recent Changes in GST

– A Detailed Analysis
Speakers:
CA Ravi Kumar Somani
GST - Current Trends
ROI

2
GST - Current Trends
ROI
 Excessive litigation at all levels - GST officials issued a little
under 1.13 lakh show-cause notices to tax-payers in 2023-
24, but classification disputes on tax rates were behind just
555 of those notices.

 Over the past three financial years the number of alleged

evasion cases filed by just the Directorate General of GST
Intelligence has almost doubled to 23,000, with a fourfold
rise in the amounts involved to 4.34 trillion rupees ($51.9
billion).

 From PepsiCo, BMW, Uber, Infosys, Mahindra, gaming startups

- they are all embroiled in GST litigation that could take years
to resolve and add to the cost of doing business in India.
3
 Design Challenge in Dual Administration –Unlimited Trouble.
GST - Current Trends
ROI

4
GST - Current Trends
ROI

 Excessive compliance burden – Only to increase.. ISD,

Increased reporting, vendor/ customer follow-ups etc.

 B2C E-invoicing, Invoice Management System, GSTR 1A,

Credit Notes matching functionality.

 Honeymoon of GST era now comes to end – Real party now

begins!!!

 Have you taken back-up of GST Returns filed?? Old data to be

archived - Data to be archived beyond 7 years.

 Supreme Court judgment by Safari Retreats - What is ‘Plant’

5
Amnesty - Waiver Of Interest And
Penalty

1 2 3 4 5
Section 128A Total GST Benefit of waiver No refund of Waiver does not
inserted for demand as per not available interest and cover demands of
conditional the SCN/Order where GST penalty, if already erroneous
waiver of interest must be paid on demand is not paid by the refunds
and penalty for or before paid for all taxpayer
demands raised 31.03.2025 disputes covered
u/s.73, Period covered - in SCN/Order
FY 2017-18,
2018-19 and
2019-20

Recommended in GST 53rd Council meeting, effective from Union Budget 2024
Amnesty - Time-limit of issuing
Notice

Particulars FY 17-18 FY 18-19 FY 19-20 FY 20-21 FY 21-22

Notice u/s 73 30-09-2023 31-01-2024 31-05-2024 30-11-2024 30-09-2025

Notice u/s 74 07-08-2024 30-06-2025 30-09-2025 31-08-2026 30-06-2027

Detailed
Amnesty Sec ROI Stage Waiver
Scheme - 73 Notice or order passed by the adjudicating authority Yes
Section 128A 73 Order passed by first appellate authority Yes
73 Matter pending before first appellate authority or Yes (If appeal/writ
Court withdrawn)
74 Notice passed by the adjudicating authority No
74 Order passed by first appellate authority No (But provision
says otherwise)
74 Original proceedings u/s 74 but modified u/s 73 Yes
based on order of appellate authority. - matter re-
determined
73 Amount re-quantified/ modified by the committee of Yes (If payment made
commissioners/ revisional authority, Tribunal, Court within 3 months)
73/ Erroneous Refund or Interest or penalty already paid No Refund
74
Note: No appeal shall lie against an order passed providing benefit under8 the
above scheme
Amnesty -
Procedure ROI
 Procedure and conditions for availment of this benefit to be
and notified.
conditions
 Payment of tax may be made by the registered persons by
31.03.2025, to avail the said benefit.

 Circular to be issued to clarify various issues related to availing this

benefit of waiver of interest or penalty or both as per section 128A
of CGST Act.

 It is notified that the scheme to be effective from 01.11.2024.

9
Amnesty -
Certain ROI
Pending  What if there is no tax liability in the SCN? – Amnesty appears only
Issues when ‘tax’ is payable – Encouraging non-compliances as usual. –
How about Pre-deposit,

 'Full Amount of Tax’ - qua notice or qua issue,

 Cases of bunching of SCN into a single order - Application of 128A?

 Fate of notices u/s 74? - Department invoked 74 only for extended

time-period or due to audit proceedings but no element of fraud,
 For 2017-18, 2018-19 * 2019-20 - Application for rectification
u/s 161.

10
Amnesty -
Certain
 Once settledROI
u/s 128 A, If department appeal is filed subsequently,
Pending then whether the balance confirmed demand is appealable or one
Issues has to pay the full amount of tax mandatorily.

 Penalties u/s section 127 and sec 129, No tax involved, whether
covered under the scheme,

 Redetermination of notice by way of order by the adjudicating

authority,

 Voluntarily payment of tax before issuance of notice - Benefit for

interest/ penalty,

 Appeals not filed within the due date including extended period -
whether benefit can be availed considering the provision stating
11
Notwithstanding anything to the contrary contained in the act,
Amnesty -
Certain ROI
Pending  What if in the cases of orders passed, recovery is already done –
partially/ fully - whether application can be made and benefit be
Issues claimed for interest/ penalties portion ..??

 Order received u/s 74, whether can be covered u/s 128A(1)(C),

Plain reading of the provision v/s Intent..??

 Tax payable is appropriated. Whether such cases are covered -

whether payable as on date or payable as per the order..?? –
Different practices by central and state authorities.

 Assessing the broad expected outcome of the pending cases, if the

probability of outcome seems unfavorable, then benefit under the
scheme can be availed.

 Withdrawal of the existing appeal/ writ before the notification - ?? 12

Checkpoints around
‘As is - where common
is’ benefit forcost
past -
Common Trade
allocation/ Practices – Sec 11 A
distribution

Background Amendment Implications

• Insertion of section 11A • Refund of past taxes -
• Government in the past
for granting power not to article 265 of the COI -
extended various benefits
recover duties not levied Unjust enrichment
on “as is basis” based on
“common trade practices”. or short levied as a result impact
• No specific provisions of common trade practice • Basis of determining
under the GST law for prevalent practice?
extending such benefits. • Whether restriction also
• Provisions under section on refunding the pre-
28A of Customs Act and deposit
11C of Central Excise Act.
Formation of GST Appellate
Tribunal
 Removal of Difficulty Order No. 09/2019-Central Tax dated 03.12.2019 & Circular no. 132/2/2020-GST
provided that the time limit of three months (for assessee appeals) or six months (for departmental
appeals), shall be reckoned from the following dates, whichever is later:
(i) Date of communication of order; or
(ii) The date on which President or the State President as the case may be of the Appellate Tribunal
after its constitution under Section 109, enters office

 During the 50th GST Council Meeting, Hon'ble Justice(Retd) Shri. Sanjaya Kumar Mishra was appointed
to the post of President of GSTAT in May 2024.

 Doubts had arisen as to whether the clock for computation of time limit for filing appeals in the principal
bench GSTAT has start ticking, upon appointment of the President of GSTAT.

 Clarified that the three-month period for filing appeals before the GSTAT would start from a date to be
notified by the Government in respect of appeal/ revision orders passed before the date of said
notification.
Recommended in GST 53rd Council meeting, effective from Union Budget 2024
Formation of GST Appellate
Tribunal
 Goods and Services Tax Appellate Tribunal (GSTAT) established, w.e.f. 1st day of September, 2023

 Constitutes the Principal Bench of the Goods and Services Tax Appellate Tribunal (GSTAT) at New Delhi
consisting of consist of the President, a Judicial Member, a Technical Member (Centre) and a Technical
Member (State).
 Place of supply matters,
 Anti-Profiteering matters.

 Constitutes the number of State Benches consisting of two Judicial Members, a Technical Member
(Centre) and a Technical Member (State) with with the Sitting or Circuit Benches. For ex: Maharashtra is
as under:
State Name No. of Benches Location Sitting/ Circuit
Goa Mumbai Panaji (Circuit)
3 Pune Thane
Maharashtra
Nagpur Chhatrapati Sambhajinagar
Recommended in GST 53rd Council meeting, effective from Union Budget 2024
Formation of GST Appellate
Tribunal
 Locations shown as 'Circuit' shall be operational in such manner as the President may order, depending
upon the number of appeals filed by suppliers in the respective States/jurisdiction. Additional sitting
Bench shall be operated by one Judicial Member and one Technical Member.

 Currently, the functionality for filing of an application in FORM GST DRC-03A, is not available on the
common portal. Hence, if pre-deposit is inadvertently paid through FORM GST DRC-03, then proper
officer must be intimated to not initiate recovery till the time functionality made available on the portal.

 Manual filing of APL - 05 to be permitted if the Registrar allows the same by issuing a special or general
order to that effect.

 Letter to be submitted to the division office, stating our intent of filing the appeal before GSTAT or else
department may take adverse action of recovery - Circular No. 224/18/2024 GST

 Cases where tax paid in the past against appellate orders with no intent to appeal – To be reassessed
based on the new developments and call to file an appeal before GSTAT to be considered.
Recommended in GST 53rd Council meeting, effective from Union Budget 2024
Changes in Quantum of
Pre-Deposit
 The upper limit of pre-deposit (in value terms) is revised, to reduce the impact of cash flow blockages for
taxpayers.

 Also, the percentage of pre-deposit to be made before GSTAT has been reduced from 20% to 10%.

 The revised limits of pre-deposit are as under:

Appeal Stage Existing Limit Proposed Limit
First Appeal 10% of CGST & SGST with a maximum 10% of CGST & SGST with a maximum
value limit of Rs.25 Crores each value limit of Rs.20 Crores each
GSTAT 20% of CGST & SGST with a maximum 10% of CGST & SGST with a maximum
value limit of Rs.50 Crores each value limit of Rs.20 Crores each

Recommended in GST 53rd Council meeting, effective from Union Budget 2024
Section 74A - Uniform Time Limit
For SCN & Adjudication
 Currently 2 separate provisions govern time limit for issuance of notice and adjudication by the
AO(Normal period u/s.73 & extended period u/s.74) - Various instances of AO resorting to Section 74
without proper basis, as the time limit u/s. 73 would have lapsed.

 In the electronic era everything is available with the department as proving of suppression is very
difficult.

 To ensure uniform time limit for adjudication process and avoid possible revenue leakage, a uniform
time limit for issuance of SCN and adjudication for all scenarios is provided

 Section 74A applicable prospectively from the FY 2024-25 (S.73 & S.74 applicable till FY 2023-24) -
Once merged, the blocking of ITC u/s 74 may not be required.

Recommended in GST 53rd Council meeting, effective from Union Budget 2024
Section 74A - Uniform Time Limit
For SCN & Adjudication
 Separate time limit is carved (42 months) for issuing demand notice and then and Time limit for
issuance of demand orders may be kept at 12 months from the date of issuance of the demand
notice.

 If proper officer is not able to issue the order within the specified period, the commissioner/ JC can
based on reasons recorded in writing, extend the period of 12 months by another 6 months.

 Time allowed to taxpayer to settle tax with interest to avoid SCN - 60 days (increased from 30 days)

 Quantum of Penalty - No changes proposed(Fraud/suppression etc. - 100% and for Others -10%)

 Sec 17(5) blockage of credit becomes relevant only up to FY 23-24

Recommended in GST 53rd Council meeting, effective from Union Budget 2024
 ROI

Section 74A Clause 134 of Finance Bill 2024

Proposed Changes
Benefit for Taxpayer Benefit for Revenue
Time limit to take decision for Time limit of 42 months from the date of
non/reduced imposition of penalty annual return or date of erroneous
extended to 60 days instead of earlier 30 refund (for issuance of SCN).
days.
No notice when the value of the Order to be passed within 1 year from
proceedings for a financial year is less the date of notice. Further extension by
than Rs.1,000/- maximum 6 months basis order of
Commissioner/JC, basis reasons to be
recorded in writing

Penalty shall be reduced from 100% of No loss of period during reclassification

tax to 10% of tax incase of of cases u/s 75(2)
reclassification u/s 75(2A) 20
 ROI

Section 74A Cognate proposals based on section 74A

Amendment to section 17(5)(i) of CGST Act 2017.
Accommodation of provisions of section 74A in following sections:
• Section 10 – Composition Scheme
• Section 21 – Recovery of excess credit distribution
• Section 35(6) – Recovery in case of non maintenance of records
• Section 49(8) – Chronology for discharging off the liability
• Section 50(1) – Interest restriction to the cash portion
• Section 51 – TDS procedure
• Chapter XII – Assessments , Chapter XIII – Audit
• Section 75 – General provisions relating to determination of tax
• Section 104 – Exclusion from the limitation period incase of void
AAR/AAAR.
• Section 127 – Notice for penalty
21
Checkpoints around common
Interest-Balance costLedger
in E-Cash
allocation/ distribution

• Currently, Section 50 provides • Rule 88B is amended to provide Points requiring

that interest is not applicable if that the balance of E-Cash ledger
sufficient balance in E-Credit to be excluded for the
clarity
ledger is available. computation of interest in case
• Whether similar relief would
of delay in filing of Form GSTR-
be extended even in case of
• However, interest would be 3B.
default in payment of GST,
payable on the amount of tax where GSTR-3B was filed.
paid by debiting the E-Cash • It is in line with the ruling of the
ledger (in cases of delay in filing Madras HC in the case of Eicher
• Cases where interest was paid
of Form GSTR-3B). Motors Limited - GST deposited
in the past by the taxpayer -
in E-Cash Ledger would amount
Possibility to claim refund.
to payment to Government
Matching system in Discount
Credit Notes
 Clarification on mechanism for providing evidence for reversal of ITC by recipient where supplier
claims adjustment on issuance of credit note on accounts of discounts given as per sec 15(3) of the
CGST Act - Impact of Raj HC judgment in case of HUL

 Functionality/ facility is to be made available on the common portal to enable the suppliers as well as
the tax officers to verify whether the input tax credit attributable to such discounts offered through tax
credit notes has been reversed by the recipient or not

 Till the time functionality is built, Certificate from the recipient of supply, issued by the CA/ CMA
certifying that recipient has made the required proportionate reversal of ITC for ITC > 5 lacs.

 Self - certification if the value inclusive of CGST + SGST + IGST + Cess < 5 lacs.
Matching system in Discount
Credit Notes
 The supplier shall produce such certificates/undertakings before the tax officers, if required, during
any proceedings such as scrutiny, audit, investigations, etc.

 Even for the past period, suppliers may obtain the evidences and produce to the authorities concerned.

 In case where the recipient reverses after some time on a delayed basis and not in the same month.
Would it lead to levy of demand of interest by the department.

 Whether this also needs to be applied in cases of other credit notes issued u/s 34 for situations that of
other than the discounts
 Delay in filing GSTR-3B of previous FY
1 beyond subsequent September - ITC availed
in GSTR-3B

Extension of Belated filing of GSTR-3B along with late fees

2 under various amnesty extension
16(4) Time
Limit - 3 Issue arose for eligibility of ITC in such
cases

Background Several HC’s have upheld the validity of Sec

4 16(4) and Mad HC given contrary view. Kerala
HC held FA 2022 applies retrospectively
Extension of 16(4) Time Limit -
Clarification

ITC for FY 2017-18 to FY ITC eligible where return

2020-21 eligible if availed in filed post revocation of
any GSTR-3B filed till cancellation/suspension of
30.11.2021 registration if pending
returns are filed within 30
days of revocation order.
Extension
of 16(4)
Time Limit Areas requiring clarity:
 Refund of ITC already reversed - should be applied. If specific
ROI
provision inserted in law - may require to be litigated - closed v.
ongoing proceedings

 Matters pending in appeal/writs - withdrawal for claiming benefit:

 If time limits to appeal/order expires before notifying the
amendment - should we ignore or take action?
 Withdrawal if filed appeal/writs? - immediate v. after notifying
the amendment

 ITC in case of cancelled dealers - impact on 16(4)

 Delayed filing of R-1 by suppliers - covered u/s 16(4)?

27
Valuation for supply of import
of services by a related person
 Earlier clarification provided that supply of services between
distinct persons where full ITC is available to the recipient, value
ROI adopted to be deemed as open market value.

 It is now clarified that in cases where the foreign affiliate is

providing certain services to the related domestic entity, and
where full input tax credit is available, the value declared on the
invoice may be deemed as open market value.

 If the invoice is not issued, the value of such services may be

deemed to be declared as ‘Nil’ and may be deemed as open market
value in terms of second proviso to rule 28(1) of CGST Rules.

28
Valuation for supply of import
of services by a related person
 Does this clarification make the RCM liability on import of services
redundant..?? Whether applicable to all import of services RCM
ROI transactions or only where no consideration charged??

 Can the benefit of this clarification be said to be extendable to the

domestic related party transactions also.

 Whether can be applied as a matter of routine - If there is no further

sale/ or delayed sale from the recipient state, then it directly
impacts the collection of the recipient state.

 Valuation left to the discretion of related parties – Tax planning?? If

short/ excess charged, whether now can be adjusted through a
Debit/ credit note?

 The aspect of full ITC being eligible to the recipient must be looked
29
at qua the invoice or qua the GSTIN
Circular No. 210/4/2024-GST
 16(4) Time-limit for ITC on Tax paid
TARGET AUDIENCE
under RCM
• Ambiguity in time limit for taking RCM ITC especially when RCM
paid after September/November of next year
Background • ITC under GST to be taken basis tax invoice. Self invoice is relevant
By targeting these diverse audience document for RCM credit
segments, our marketing agency
ensures a customized and impactful
• Levy of tax liability is independent of ITC eligibility time limit
approch that aligns with the specific
• Time limit to be counted from the date of self invoice generation
Clarification
needs and goals of each client.
(independent of time of supply)
• Once interest is paid, the delay in ToS is taken care of. It should not
debar ITC

• Liability from supplies received from registered persons - basis of

taking ITC is vendor invoice - disputable
Points requiring • Tax paid through DRC-03 during audit proceedings
clarity • ITC can be availed for RCM paid pursuant to dept proceedings-
initiated u/s 74
 Clause ROI
113 & 118 of Finance Act 2024
Section 13 Amendments
& 31  Time for availing credit starts from date the recipient is liable to
issue invoice – Time-limit casted on recipient to issue self-invoice
being a recipient of goods/ service. – Effective w.e.f Nov 1, 2025

 Time-limit for the recipient to issue invoice is yet to be prescribed

by way of rules.

31
Reduction in Government Litigation
 Section 120 already provides that no appeal shall be preferred by the Department, where the amount of
GST involved is less than the monetary limits recommended by the Council.

 No monetary limits provided, hence no clarity existed on the restriction on the Dept to prefer appeal.

 The Council has now recommended the monetary limits, which appear to be in similar lines to the limits
provided under the erstwhile Central Excise regime.

 Monetary limits not applicable for cases involving question of law.

Appeal Stage Under Central Excise Under GST

Tribunal Rs. 50 Lakh Rs. 20 Lakh
High Court Rs. 1 Crore Rs. 1 Crore
Supreme Court Rs. 2 Crore Rs. 2 Crore

Recommended in GST 53rd Council meeting, effective from Union Budget 2024
Reduction in Government Litigation
 The value stated below is aggregate of CGST, SGST, IGST and Cess. If the dispute pertains to interest or
penalty or late fee only, then the value of only such interest or penalty or late fee must be considered.

 Where the dispute pertains to demand of interest, penalty and/or late fee (without involving any
disputed tax amount), the aggregate of amount of interest, penalty and late fee shall be considered for
applying the monetary limit for filing appeal.

 In a composite order which disposes more than one appeal/demand notice, the monetary limits shall be
applicable on the total amount of tax/interest/penalty/late fee, as the case may be, and not on the
amount involved in individual appeal or demand notice.

 Cases where only interest or penalty is in dispute (no GST demand) - Whether monetary limits would
apply? Going by the intention of the reducing Government litigation, it appears that the monetary limits
would be made applicable.

Circular No. 207/1/2024-GST

Recommended in GST 53rd Council meeting, effective from Union Budget 2024
Reduction in Government Litigation
 Monetary limits not applicable in the following cases:
 Where any provision has been held to be ultra vires to the Constitution of India;

 Where any Rules or regulations have been held to be ultra vires the parent Act;

 Where any order, notification, instruction, or circular issued by the Government, or the Board has
been held to be ultra vires of the Act or Rules made there under;

 Where the matter is related to the below and involves interpretation of the provisions of the Act /the
Rules/ notification/circular/order/instruction etc. –
a. Valuation of goods or services; or
b. Classification of goods or services; or
c. Refunds; or
d. Place of Supply; or
e. Any other issue,

 Where strictures/adverse comments have been passed and/or cost has been imposed against the
Government/Department or their officers.
Recommended in GST 53rd Council meeting, effective from Union Budget 2024
Corporate Guarantee - Deemed
Valuation
Points requiring clarity and possible views
 Amendment retrospective w.e.f. Oct 26,
Background Clarification 2023. - Prior to that???
 Recipient eligible for Full ITC - Qua
Transaction or Qua Person??
 Valuation mechanism is on per annum
Rule 28 provides Invoice value (even basis - Legality??
value of supply of nil value) to be
corporate  Liability based on loan amount disbursed
considered where or amount guaranteed - service is of
guarantee to a recipient is eligible
related person to be extending guarantee and hence it must be
for full ITC
deemed as 1% of on value of guarantee extended.
the amount of  Valuation in case of co-guarantors??
guarantee offered Deemed valuation  Corporate guarantee extended by overseas
Per annum or also not applicable company - Invoice value can be OMV?
actual for export of
consideration,  Interest paid - Can refund be claimed?? –
services Benefit of 11A??
whichever is higher.
 Valuation benefit whether only for
corporate guarantee or a blanket
application for all import of services?
Introduction of GSTR 1A –
Rule 59 ROI

 Provided that the said person may, after furnishing the details of
outward supplies of goods or service or both in FORM GSTR-1 for a
tax period but before filing of return in FORM GSTR-3B for the
said tax period, at his own option, amend or furnish additional
details of outward supplies of goods or services or both in
FORM GSTR-1A for the said tax period electronically through the
common portal, either directly or through a Facilitation Centre as
may be notified by the Commissioner.

 the additional details or amendments in details of outward supplies

furnished by his supplier in FORM GSTR-1A filed between the day
immediately after the due date of furnishing of FORM GSTR-1 for the
previous tax period to the due date of furnishing of FORM GSTR-1 for
the current tax period.
36
 ROI

B2C  The GST Council recommended roll out of a pilot for B2C e-
Invoicing, following the successful implementation of e-invoicing in
E-invoicing the B2B sector.

 The Council recognized potential benefits of e-invoicing in retail,

such as improved business efficiency, environmentally friendly, cost
efficiency to the business, etc.

 It would also provide an opportunity to the retail customers to

verify the reporting of the invoice in the GST return.

 The pilot will be rolled out on voluntary basis in selected Sectors

and States.

37
Mandatory Physical verification for
GST Registration
 Mandatory verification of original proof documents and photograph to be done at the
facilitation centers:
 Provided further that every application made under sub-rule (4) by a person, other than a person
notified under sub-section (6D) of section 25, who has not opted for authentication of Aadhaar
number, shall be followed by:

 Taking photograph of the applicant where the applicant is an individual or of such

individuals in relation to the applicant as notified under sub-section (6C) of section 25 where
the applicant is not an individual, and

 Verification of the original copy of the documents uploaded with the application in FORM
GST REG-01

 At one of the Facilitation Centers notified by the Commissioner for the purpose of this sub-
rule and the application shall be deemed to be complete only after successful verification as
laid down under this proviso.
Taxability of Warranty/
Extended Warranty
 Taxability of warranty in case of Automobile sector - Circular 216 clarifies that the coverage of the
Circular 195 need not be restricted only to the parts and the same to be extended even where entire
goods are replaced under warranty.

 Treatment of the damaged or faulty part which is to be returned by customer to dealer and
subsequently to Manufacturer?
 Original manufacturer issuing GST CN for the returned goods treating it as a sales return and
making a fresh sale of the new goods?

 Sales invoice is issued by the removal of goods by the customer to the manufacturer – Mfr treats it
as a purchase and avails ITC and Customer levies GST on the sales.

 Commercial Credit note issued by the manufacturer? Whether customer needs to still reverse the
ITC?
Taxability of Warranty/
Extended Warranty
 Goods returned by the customer under DC - Whether tax to be paid under schedule-I or ITC
reversal u/s 17(5)??

 Tax treatment for movement of warranty goods from the manufacturing location to the sales
location of the same entity.

 Taxability of Extended warranty – When given by two different entities or when given after the
transaction of sale does not amount to a composite supply
 When given along with the transaction of sale, can it amount to be a composite supply, especially
both are not bundled and is purely at the option of the customer.
[Circular No. 216/10/2024-GST]
Other Key Clarifications
Reference to Policy wing before issuing of Show Cause Notice in case of
interpretational issues prevailing in the industry/ Trade:
 “The scenario may arise in a CGST Zone where an issue investigated by one of the (Pr.) Commissioners is
based on an interpretation of CGST Act/ Rules, notifications, circulars etc., and it is in the direction of
proposing non-payment or short payment of tax, however, the background is that the taxpayer(s)
is/are following, or have followed, a prevalent trade practice based on particular interpretation
on that issue in the sector/industry. This scenario results in more than one interpretation and
likelihood of litigation, change in practice etc.

 In such cases, it is desirable that the zonal (Pr.) Chief Commissioner make a self-contained
reference to the relevant policy wing of the Board i.e., the GST Policy or TRU. The endeavor, to make
such reference before concluding investigation, and as much in advance, as is feasible, of the earliest due
date for issuing of show cause notice, may be useful in promoting uniformity or avoiding litigation if
the matter, after being processed, is amongst those that also gets placed before the GST Council.”

[Instruction No. 03/2024-GST]

Relaxation ROI
Clarification on IGST refunds where benefit of
in refunds concessional/ exemption notifications availed under
on exports rule 96(10) of CGST Rules and omission of rule 89 (4A)
& 89 (4B):
[Circular No. 233/26/2024-GST]
• Rule 96(10) of CGST Rules cannot be said to be contravened and
export with payment of IGST must be refunded if subsequently the
tax along with applicable interest is paid by reassessing the Bill of
Entry in respect of the import of the said inputs through the
jurisdictional Customs authorities.

• To simplify and expedite the procedure for refunds in respect of

exports, Council recommended to prospectively omit rule 96(10),
rule 89(4A) & rule 89(4B) from CGST Rules, 2017.

42
Refund of Additional IGST paid on
upward revision of export price
 Online refund application to be filed electronically in Form RFD 01 – Refund of Additional IGST or
ITC?? Refund to be filed under ‘Any Other’ category till the time specific category is added.

 Can the incremental value paid using debit note be paid under LUT while the original transaction is
exported with payment of IGST?

 The validated details of shipping bills, amount of IGST involved in such shipping bills, and amount of
IGST refund sanctioned by the customs must be made available to jurisdictional GST officers.

 2 years time-limit applies from the date of export of such goods - Price revisions beyond 2 years from
date of exports??

 For past cases, 2 years starts from the date effect of rule 89(1B) of CGST Rules.

 Downward revision in price of exported goods, tax refunded to be deposited along with applicable
interest. [Circular No. 226/19/2024-GST]
Other Key Clarifications
 The return in FORM GSTR-4 for a financial year from FY 2024-25 onwards shall be required to be
furnished by the registered person till the thirtieth day of June following the end of such financial
year.

 Goods subjected to export duty not eligible for refund under automated route also - whether exports
made with/ without payment of GST - Restriction also applies to supplies made to SEZ.

 B2C supplies to be reported at transaction level for invoices with value more than Rs. 1 lakh instead of
current limit of Rs. 2.5 lakhs.

 GSTR-9 exempted for taxpayer with less than Rs 2 crore turnover.

 Section 122(1B) amended to provide that penal provisions in case of non-compliance by the ECO’s to
be applicable only to those ECO’s who are liable to collect TCS.

 Reduction in TCS rate from 1% to 0.5% - This is mainly to ease the financial burden on the supplier’s
making supplies through such ECOs.
Other Key
Proposals in
Union Budget ROI
 TDS deductor’s in FORM GSTR-7 to be furnished every month
2024 regardless of whether any tax deduction has been made.

 As per the direction of the officer, a person summoned may appear

in person or by an authorized representative – Sec 70

45
Sector specific Recommendations
 To bring renting of commercial property by unregistered person to a registered person under Reverse
Charge Mechanism (RCM) to prevent revenue leakage – Warehouse, Godowns, Depots, Sales offices,
Branch offices, 3PL/ 4PL logistics etc.

 It is clarified that GST is exempt on the statutory collections made by the Real Estate Regulatory
Authority (RERA) in accordance with the Real Estate (Regulation and Development) Act, 2016 as
RERA is a Governmental Authority. [Circular No. 228/22/2024-GST]

 ITC on Ducts and Manholes used in network of optical fibre cables (OFCs) on the ground - [Circular
No. 219/13/2024-GST]

 GST Council recommended to constitute a Group of Ministers (GoM) to holistically look into the issues
pertaining to GST on the life insurance and health insurance. The GoM is to submit the report by end
of October 2024.

 Ancillary/ Intermediate services provided by GTA viz., loading/unloading, packing/unpacking,

transshipment, temporary warehousing etc. to be treated as part of the composite supply.
Sector specific Recommendations
 Exemption on renting of hostels, guest houses, PG etc., provided total amount of rental charged is less
than Rs 20,000/- per person per month and facility taken for a period of not less than 90 days.

 GST on Preferential location charges to be levied as per the tax rates as applicable to the construction
service.

 Place of supply in case of Data hosting services provided by the Data Centres in India to the cloud
computing service providers outside India is outside the taxable territory and hence to be treated as
an export of service - Circular No. 232/26/2024-GST

 Input tax credit in respect of demo vehicles is eligible. Further, eligibility of input tax credit on demo
vehicles is not affected if the said vehicle is capitalized in the books of account of the authorized
dealers provided that the dealer does not claim depreciation on the tax component of the cost of
capital goods. [Circular No. 231/25/2024-GST]
Sector specific Recommendations

 ENA excluded from levy of GST when used for manufacture of liquor for human consumption.

 Clarification on place of supply applicable for custodial services provided by banks to Foreign Portfolio
Investors - [Circular No 220/14/2024-GST]

 Clarification on time of supply in respect of supply of services of construction of road and maintenance
thereof of National Highway Projects of National Highways Authority of India (NHAI) in Hybrid
Annuity Mode (HAM) model - [Circular No. 221/15/2024-GST]

 Clarification on time of supply of services of spectrum usage and other similar services under GST -
[Circular No. 222/16/2024-GST]
Recommendations in Insurance
Sector
 Co-insurance premium apportioned by lead insurer to the co-insurer to be declared as no supply
under Schedule III of the CGST Act, 2017 and past cases may be regularized on ‘as is where is’ basis

 Transaction of ceding commission/re-insurance commission between insurer and reinsurer may be

declared as no supply under Schedule III of CGST Act, 2017 and past cases may be regularized on ‘as
is where is’ basis

 GST liability on reinsurance services of specified insurance schemes covered by Sr. Nos. 35 & 36 of
notification No. 12/2017-CT(Rate) may be regularized on ‘as is where is’ basis for the period from
01.07.2017 to 24.01.2018

 GST liability on reinsurance services of the insurance schemes for which total premium is paid by the
Government covered under Sr. No. 40 of notification No. 12 may be regularized on ‘as is where is’
basis for the period from 01.07.2017 to 26.07.2018
Recommendations in Insurance
Sector
 Clarification on taxability of wreck and salvage values in motor insurance claims - [Circular No.
215/9/2024-GST]

 Availability of ITC on repair expenses incurred by the insurance companies on reimbursement mode
settlements.

 Clarification on reversal of ITC under Rule 42/43 by insurance company on the value of supply
excluded from taxability under valuation provisions - relevant for real estate sector also.
Rate changes/ Exemptions
Description of Goods/ Services Old Rate New Rate Remarks
Import of specified items for defence forces
for a further period of five years till 30th Exempt
June, 2029
Aircraft maintenance items 18% 5%
Carton boxes for apples and other
18% 12%
horticulture
Fire water sprinkler (regularised for the
18% 12%
past)
Solar cookers 18%/12% 12%
Rate varied based on material
Steel Aluminum can used in milk industry 18%/12% 12% used in the manufacturing, thus
uniform rate recommended
Compensation cess on Aerated beverages &
energy drinks to authorized customers by Exempt
Unit Run Canteens under Ministry of Defence.
Rate changes/ Exemptions
Description of Goods/ Services Old Rate New Remarks
Rate
Amend existing entry covering poultry-
keeping machinery attracting 12% GST to
Parts of Poultry machinery 18% 12%
specifically incorporate 'parts of Poultry
keeping Machinery'
Scientific equipment's Exempt
Incentive scheme for Rupay Not
transaction and BHIM UPI Taxable
Sale of platform tickets, facility of retiring
rooms/waiting rooms, cloak room services
Supply of Railways Exempt
and battery-operated car services and to also
exempt the Intra-Railway transactions.
 Rate changes/ Exemptions
Description of Goods/ Services Old New Remarks
Rate Rate

Namkeens & Extruded/ Expanded Un-fried Snack Pellets - 5%

18% 12%
Savory Food Products Applicability - 12% prospectively

Cancer Drugs
12% 5%

Roof Mounted Package Unit

It will be classified under HSN 8415, attracting a
(RMPU) Air Conditioning 18% 28%
GST rate of 28%.
Machines for Railways
Classified under 9401, with GST increased
from 18% to 28%.
Car and Motorcycle Seats
18% 28% Uniform Rate: The 28% rate will be applicable
prospectively to align car seats with motorcycle
seats, which already attract 28%.
Sale of
ROI
 Registered to registered - 2% TDS

metal scrap  Unregistered to registered - 18% under RCM

 Supplier to take registration - crossing threshold
 Why only for metal scrap?

54
 for any queries -
[email protected]
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