Key Amendments in GST in Finance Bill 2023

Recently the finance bill 2023 was passed in the Lok Sabha with a total of 64 official amendments proposed in the bill. These will include clarifications and also measures to take the sting out of some of the tax proposals announced in the budget and also include setting up a committee under the finance secretary to review the national pension scheme and setting up a goods and services tax (GST) Appellate Tribunal.


The bill will now go to the Rajya Sabha for approval. Finance Minister Nirmala Sitharaman said the RBI will look into the issues related to credit card payments for foreign tours not being captured under the Liberalised Remittances Scheme (LRS). The minister further said it has come to notice that payment for foreign tours through credit cards are not being captured under LRS and such payments escape tax collection at source.


Amendments relate to infrastructure investment trusts and the constitution of goods and services tax (GST) tribunal under the Central GST Act, according to people privy to the amendments.


Committee to review NPS


A committee under the chairmanship of the finance secretary will be set up to review the National Pension System (NPS) to address the needs of government employees while ensuring fiscal prudence.


Mutual funds had less than 35% AUM in domestic equity to lose indexation benefit, to be taxed as short-term capital gains


Debt funds with less than or equal to 35 percent invested in equity shares will be taxed at the investors’ income tax slab and treated as short-term capital gains. This is similar to how bank deposits are taxed in India. It will be applicable on investments done after April 1.


Enhanced tax benefits to offshore banking units operating in GIFT city


The offshore banking units operating in Gujarat International Finance Tec-City (GIFT City) will now get a 100 percent tax deduction on their income for ten years.


Tax on royalty or technical fees earned by foreign (non-resident) companies hiked


The tax on royalty or technical fees earned by non-resident companies has been hiked from 10 percent to 20 percent.


STT on futures and options trading hiked by up to 25 percent


The securities transaction tax (STT) on the sale of options has been increased to ₹2,100 on a turnover of ₹1 crore against an earlier levy of ₹1,700, an increase of 23.5%, while on the sale of futures contracts, STT has been raised to ₹12,500 on ₹1 crore of turnover against ₹10,000 earlier, indicating a 25% hike.


GST Appellate Tribunal


The benches of the GST Appellate Tribunal would be set up in every state while there will be a principal bench in Delhi that will hear appeals related to “place of supply”. Currently, taxpayers need to file their petitions in high courts.


TDS on online gaming apps preponed


From the earlier date of July 1, 2023, the date of application of the tax deducted at source (TDS) on online gaming applications has been preponed to 1st April. Online gaming companies are presently liable to pay 18 percent GST on their gross revenue.


No change in tax on non-par savings insurance products (₹5 lakh cap remains). 


No change in taxation REITS/InviTs despite representation (Income from REITS to be taxed as income from other sources and not as capital gains). 


The government is likely to propose a concessional withholding tax rate of 9%, against 20%, on interest payments on overseas long-term bonds or rupee-denominated bonds.

Furthermore, there are some changes in sections of GST.


It has been proposed to amend section 23(2) of the central goods and services tax act 2017 with a non-obstante clause, that too retrospectively applicable from 1st July 2017. So, to provide that, persons required taking registration in GST as per section 22(1) of the CGST act, and compulsory registration required under section 24 of the CGST act, need not register them if they are exempted from taking GST registration.


It has been proposed to amend section 30(1) of the CGST act, revocation of cancellation of registration, to remove the restriction on the registered person to apply for renovation or cancellation of its GST registration within 30 days from the date of service of cancellation order.

It has been proposed to amend section 62(2) of the CGST act, assessment of unregistered persons, to provide the time period of 60 days instead of 30 days, for furnishing return Form GSTR 3Bor Form GSTR 10 where the proper officer has assessed tax liability on best judgment assessment basis.


It has been proposed to substitute section 109 of the CGST act, to provide that, the jurisdiction, powers, and authority conferred on the GSTAT, shall be exercised by the principal bench and the state benches instead of the national bench or regional bench.


There are many amendments proposed and passed in the financial bill 2023.


(Source – Various sources from the internet including different websites taxguru, business standard, times of India, mint, and

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