Union Budget 2024: Anticipating key GST reforms and industry impact
It is that time of the year again when industries, economists, financial advisors, and the taxpayer community eagerly await the announcements from the Hon’ble Finance Minister. The focus of the Modi 3.0 administration continues to be on fiscal consolidation.
Significant Goods and Services Tax (GST) related announcements and recommendations are made periodically through the GST Council meetings held this year. The latest GST council meeting, held on 22 June 2024 set the stage for the announcements in the upcoming budget. The Council delved into multiple industry issues and addressed many matters, largely in favour of the industry. However, it is crucial to review the fine print of the specific changes in the laws, including notifications and circulars.
Several changes were recommended, to give effect to which, the GST law would need to be amended. Some of the salient ones having a major impact on the industry include:
1. Proposed introduction of section 11A in the CGST Act
This provision would empower the Government to regularise non/short levy of tax due to common trade practices:Multiple industries would look forward to regularising their ongoing disputes involving industry practices under this provision (e.g. foreign airlines, shipping companies, online gaming companies, etc).
2. Retrospective amendment in section 16(4) of the CGST Act
This proposes an extension in the last date for claiming input tax credit (ITC) for FY2017-18 to FY2020-21 to 30 November 2021:The industry is looking forward to understanding the fate of ITC, which was either not claimed or reversed after claiming due to delayed claim, pertaining to this period.
