Introduction
The amendment that was introduced via the finance bill is going
to be a game changer in certain way as the Central Board of
Indirect Taxes and Customs' (CBIC) most recent Notification1,
which announced the effective date of the adjustments made to the
Central Goods and Services Tax Act, 2017 (CGST Act) and related
laws through the Finance (No.2) Act, 2024, the Government of India
has officially announced the effective date for the amendments to
the Goods and Services Tax (GST) laws introduced under the Finance
(No. 2) Act, 2024. These amendments are designed to streamline GST
compliance, enhance transparency in tax administration, and address
procedural challenges faced by taxpayers and businesses.1
I. Amendment effective from 27 September
2024:
The expansion of the Appellate Tribunal's powers to include
the review and resolution of anti-profiteering cases under the GST
regime is a significant step toward ensuring fair pricing practices
and safeguarding consumer interests. Previously, the
anti-profiteering mechanism had limitations, as cases were handled
primarily by the National Anti-Profiteering Authority (NAA), which
faced challenges such as delayed resolutions, resource constraints,
and restricted appellate recourse. Businesses often struggled with
prolonged uncertainty, and consumers faced delays in receiving the
benefits of reduced tax rates or enhanced input tax credits, with
the Tribunal now authorized to oversee these cases, it offers a
structured appellate platform for businesses and consumers alike,
expediting case resolution and reducing litigation bottlenecks. The
Tribunal's role in adjudicating these matters introduces a
higher degree of legal oversight, ensuring uniformity in
decision-making and fostering confidence in the system. By holding
businesses accountable for passing on tax benefits, this measure
deters profiteering practices
and promotes a level playing field. Furthermore, this development
aligns with the government's aim to enhance transparency and
fairness in the GST framework, encouraging compliance and
protecting consumer rights while bolstering public trust in the
taxation system.
- Amendment effective from 1 November
2024:
Significant changes in CGST law to come into effect from November 2024
Significant changes have been made to the Central Goods and
Services Tax (CGST) law with the goal of making compliance easier,
expediting processes, and resolving important operational issues
that taxpayers confront. These modifications represent an important
step in improving the GST structure in India, with the majority
going into effect on November 1, 2024.
An overview of the most important changes and their effects may be
found below,2
Correction of section 109 optimizes the GST appeal court's
appeal process. Appeals for conflicts on the hall are booked
exclusively for the main bench. The President of the Tribunal was
empowered to assign the case to the Chamber subject to this
limitation.Further, Article 112 was amended to provide that the
period for filing an appeal shall be three months from the date of
notification by the Government or the date of communication of the
impugned order.
This will ensure clarity and predictability in the appeals
process. These changes came into effect on September 27, 2024.
Reduction in advance deposits for appeals
Simplified filing for TDS deduction:
A registered person who is liable to deduct tax at source (TDS)
must file the return within ten days of the deduction month,
according to Section 39(3) of the current CGST Act. With the CGST
Rules, the government can now determine the timing thanks to the
replacement of this clause. Notably, in order to ensure complete
compliance, these returns must be filed even if no deductions were
made during the month.For TDS deductors, the revisions are intended
to increase reporting clarity and decrease compliance uncertainty.
Consistent due dates for penalties and claims Section 74A, which
establishes a single deadline for the issuance of demand letters
and demand orders starting in the fiscal year 2024–2025, is a
significant reform. Demand orders must be issued within 12 months
of the demand notice, which must be sent out within 42 months of
the applicable annual return's filing date. The time limits in
cases of fraud, fraudulent misrepresentation, and non-fraud are
standardized by these regulations. The current provisions of
sections 73 (non-fraud cases) and 74 (fraud cases) will remain in
effect for tax years up until the fiscal year 2023–2024.
Enhancing the appeals process before the court To reduce the
financial burden on taxpayers filing appeals, the requirement of
advance deposits under Articles 107 and 112 has been relaxed. The
revised structure is as follows:
The recent amendments to the CGST Act are set to significantly
reduce litigation costs for businesses by clarifying ambiguous
provisions and introducing measures to resolve disputes
efficiently. One notable reform is the conditional exemption from
interest and penalties for taxpayers who rectify errors, make
voluntary disclosures, or comply within stipulated timelines. This
proactive approach incentivizes compliance while offering relief
from punitive consequences, reducing the financial strain on
businesses. By promoting dispute avoidance and fostering a
cooperative tax environment, these changes align with the
government's vision of creating a more taxpayer-friendly
ecosystem, encouraging timely adherence to regulations and
minimizing litigation risks.
A new section 128A has been introduced to provide for conditional
exemption from interest and penalty on tax claims relating to
financial years 2017-18 to 2019-20. To avail this exemption,
taxpayers will need to pay the tax liability in full as per the
statement issued or give a show cause notice or order by a
specified date. This provision provides much-needed relief to
taxpayers and encourages voluntary compliance.
Profit Control Authority Transition
With effect from April 1, 2025, the Profit Control Authority will
no longer accept new applications for compliance reviews under
section 171(2). Cases involving anti-profiteering will be decided
by the Appellate Tribunal's Principal Bench. These changes are
intended to remove overlapping authorities and streamline the
anti-profiteering system. Certain commodities are not subject to
GST.
Section 9 of the CGST Act currently excludes "undenatured
extra neutral spirits or conditioned spirits used in the
manufacture of alcoholic beverages for human consumption" from
GST tax.
Similar amendments have been made to the IGST and UTGST Acts to
make the treatment of these goods uniform across the laws.
Regulating non-collection and under-collection of tax
Section 11A gives the government the authority to regularly
regulate instances of under-collection or non-collection of Goods
and Services Tax (GST) as a result of usual business practices,
depending on the GST Council's recommendations. This adjustment
will solve real- world problems for taxpayers and facilitate
compliance with previous disparities. Explanations of Refund
Limitations.
There have been important changes to the refund claims under
Section 16(5) of the IGST Act and Section 54(3) of the CGST Act.
Refunds of unutilized Input Tax Credits (ITC) or Integrated Taxes
paid on zero-rated supplies are now limited to goods subject to
export duty.
Supplies to SEZ developers or units in similar circumstances will
also be subject to these restrictions. These amendments ensure that
the reimbursements are not misused and are consistent with broader
trade policy objectives. Reinstating and cancelling
registrations
Conditions and restrictions for deregistration are provided by new
provisions in Article 30(2), which guarantee that the procedure is
not abused and is in line with the government's goal of
encouraging lawful business.
Other Changes:
● Co-insurance and Reinsurance Services: As long as the
relevant GST has been paid, transactions in which insurers allocate
co-insurance premiums and services to
reinsurers are now classified as "no supply" under
Schedule III.3
● Penalty Provisions for E-Commerce Operators: Only
e-commerce operators that are obligated to collect tax at source
under Section 52 will be subject to penalties under Section
122(1B). phone-approved statement: In order to streamline phone
calls, Article 70 (1a) will be implemented for individuals created
by authorized representatives.
Conclusion:
The latest amendments to the Central Goods and Services Tax (CGST)
Act underscore a pivotal shift toward a more efficient,
transparent, and taxpayer-friendly GST framework in India. These
reforms aim to simplify compliance processes, eliminate
interpretational ambiguities, and foster a business environment
that prioritizes transparency and ease of operation. One of
the critical changes involves rationalizing procedural
requirements, such as streamlining return filings and improving the
reconciliation process between invoices and returns, thus
significantly reducing the compliance burden on taxpayers.
Moreover, the amendments introduce clear provisions to address
long-standing ambiguities that often led to disputes and
litigation, ensuring greater certainty in tax administration. This
is particularly evident in areas like the input tax credit
mechanism, where specific conditions for claiming credits have been
clarified, reducing instances of denial or delay. Additionally, the
reforms emphasize the adoption of technology to automate compliance
and reporting, enhancing accuracy and efficiency while minimizing
human intervention and errors. Measures such as real-time tracking
of e-invoices and e-way bills further bolster transparency and curb
tax evasion. The government's focus on resolving procedural
inefficiencies, coupled with taxpayer-friendly dispute resolution
mechanisms like amnesty schemes and reduced penalties for voluntary
compliance, reflects a commitment to fostering trust between
taxpayers and authorities. These changes are also designed to align
India's GST framework with global best practices, thereby
attracting foreign investment and reinforcing India's position
as a preferred destination for business. Taxpayers, however, must
proactively adapt their operations to meet these revised provisions
by leveraging digital tools, upskilling their compliance teams, and
ensuring timely updates to their accounting and tax management
systems. The reforms not only offer a path to improved compliance
but also present opportunities for businesses to optimize tax
planning and operational strategies, ultimately contributing to a
robust and simplified indirect tax regime. By addressing key pain
points and emphasizing ease of doing business, the amendments to
the CGST Act mark a significant milestone in India's journey
toward an inclusive, transparent, and growth-oriented tax
ecosystem.
Originally published in January 2025.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
