Budget 2023: Amendments on Indirect Taxes

The CGST Act will be amended to: –

01. Raise the minimum threshold of tax amount for launching prosecution under GST from one crore to Rs. 02 crore;

02. Reduce the compounding amount from the present range of 50 per cent to 150 per cent of tax amount to the range of 25 per cent to 100 per cent;

03. Restrict filing of returns/statements to a maximum period of three years from the due date of filing of the relevant return/statement;

04. Enable unregistered suppliers and composition taxpayers to make intra-state supply of goods through E-Commerce Operators (ECOs);

05. This budget has also decriminalised certain offences under the CGST Act, which will be notified on a later date.

This Budget has introduced setting up a single window IT system for registration and approval from IFSCA, SEZ authorities, GSTN, RBI, SEBI and IRDAI.

Further, there would not be any mandatory registration under section 23 of GST even for tax payable under Reverse Charge Mechanism (RCM). This will be applied retrospectively from 01^st July 2017.

If both supplier and recipient are located in India, then place of supply for transportation of goods outside India shall be treated as if it were transported in India.

The time limit to file several GST returns such as GSTR-1, GSTR-3B, GSTR-9 and GSTR-8 has been proposed to be up to 3 years.

Customs Amendments: –

The Custom Duty rates on goods, other than textiles and agriculture has been reduced to 13% from 21%. The Customs Duty on specified capital goods or machinery for manufacture of lithium-ion cell for use in battery of electrically operated vehicle (EVs) extended to 31^st March 2024.

Further, when imported by notified testing agencies, vehicles, specified automobile parts/components, sub-systems and tyres will enjoy Customs Duty exemption for the purpose of testing and certification. These exemptions are however subjected to certain conditions.

There will be exemption on Basic Customs Duty on raw materials for manufacture of CRGO Steel, ferrous scrap and nickel cathode continued.

The Customs Act, 1962 will be amended to specify a time limit of nine months from date of filing application for passing final order by Settlement Commission.

The Customs Tariff Act to be amended to clarify the intent and scope of provisions relating to Anti-Dumping Duty (ADD), Countervailing Duty (CVD), and Safeguard Measures.