Finance Bill, 2023 VisaVis GSTCA. Satyadev Purohit

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The Tax Publishers Finance Bill, 2023 Vis-a-Vis GST CA. Satyadev Purohit The GST Council in its 48th Meeting had made various recommendations vis--vis goods and services tax law. These recommendations are proposed to be incorporated in the goods and services tax laws by making various proposals under the Finance Bill, 2023. The learned author seeks to make an overview of the proposals made in the Finance Bill, 2023 in respect of the goods and services tax law. 1. Extension of composition scheme to persons supplying goods through electronic commerce operators Presently, any person engaged in making any supply of goods or services through an electronic commerce operator who is required to collect tax at source under section 52, is not eligible to opt for paying tax under the composition scheme. The Finance Bill, 2023 has proposed to amend sub-section (2) and sub-section (2A) of section 10 of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as "the CGST Act") so as to provide that the person engaged in making any supply of goods through an electronic commerce operator would not be ineligible to pay tax under the Composition Scheme. However, the person making supply of services through an electronic commerce operator would continue to be ineligible for composition scheme. Consequently, the restriction imposed on registered persons engaged in supplying goods through electronic commerce operators from opting to pay tax under the Composition Levy would stand removed. 2. Expansion of term "value of exempt supply" As per sub-section (2) of section 17 of the CGST Act, where the goods or services or both are used by the registered person partly for effecting taxable supplies including zero-rated supplies under the Act or under the Integrated Goods and Services Tax Act and partly for effecting exempt supplies under the said Acts, the amount of credit shall be restricted to so much of the input tax as is attributable to the said taxable supplies including zero-rated supplies. As per Explanation to sub-section (2) of section 17, the expression ''value of exempt supply'' shall not include the value of activities or transactions specified in Schedule III, except those specified in paragraph 5 of the said Schedule. Hence, as of now, the value of sale of land and sale of building would be regarded as value of exempt supply for the purpose of section 17(2). The Finance Act, 2023 proposes to make amendment in Explanation to section 17(2) so as to provide that supply of warehoused goods to any person before clearance for home consumption shall also be included in the value of exempt supply. SUBSCRIBE FOR FULL CONTENT

The Tax Publishers

Finance Bill, 2023 Vis-a-Vis GST

CA. Satyadev Purohit

The GST Council in its 48th Meeting had made various recommendations vis--vis goods and services tax law. These recommendations are proposed to be incorporated in the goods and services tax laws by making various proposals under the Finance Bill, 2023. The learned author seeks to make an overview of the proposals made in the Finance Bill, 2023 in respect of the goods and services tax law.

1. Extension of composition scheme to persons supplying goods through electronic commerce operators

Presently, any person engaged in making any supply of goods or services through an electronic commerce operator who is required to collect tax at source under section 52, is not eligible to opt for paying tax under the composition scheme.

The Finance Bill, 2023 has proposed to amend sub-section (2) and sub-section (2A) of section 10 of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as "the CGST Act") so as to provide that the person engaged in making any supply of goods through an electronic commerce operator would not be ineligible to pay tax under the Composition Scheme. However, the person making supply of services through an electronic commerce operator would continue to be ineligible for composition scheme.

Consequently, the restriction imposed on registered persons engaged in supplying goods through electronic commerce operators from opting to pay tax under the Composition Levy would stand removed.

2. Expansion of term "value of exempt supply"

As per sub-section (2) of section 17 of the CGST Act, where the goods or services or both are used by the registered person partly for effecting taxable supplies including zero-rated supplies under the Act or under the Integrated Goods and Services Tax Act and partly for effecting exempt supplies under the said Acts, the amount of credit shall be restricted to so much of the input tax as is attributable to the said taxable supplies including zero-rated supplies.

As per Explanation to sub-section (2) of section 17, the expression ''value of exempt supply'' shall not include the value of activities or transactions specified in Schedule III, except those specified in paragraph 5 of the said Schedule.

Hence, as of now, the value of sale of land and sale of building would be regarded as value of exempt supply for the purpose of section 17(2).

The Finance Act, 2023 proposes to make amendment in Explanation to section 17(2) so as to provide that supply of warehoused goods to any person before clearance for home consumption shall also be included in the value of exempt supply.