GST Amendments 2024: Key Changes, Compliance & Impact

This blog introduces the key changes under the Finance (No. 2) Act, 2024, focusing on GST amendments for FY 2024-25. It covers topics like ITC extensions, fraud timelines, e-commerce penalties, and transitional credits. It will understand how the amendments simplify compliance, reduce costs, and provide sector-specific insights, helping businesses stay compliant and manage financial impacts.

The Finance (No. 2) Act, 2024 introduces significant reforms aimed at enhancing compliance measures and simplifying taxpayer procedures. These amendments focus on streamlining tax processes, fostering a more business-friendly environment, and addressing critical areas to improve tax collection efficiency. The proposed changes are designed to reduce the complexity, cost, and administrative burden of compliance for businesses and individual taxpayers alike.

This blog highlights the key GST amendments introduced for the fiscal year 2024-25 under the Finance (No. 2) Act, 2024. It covers updates on compliance requirements, extensions for claiming Input Tax Credit (ITC), penalties for e-commerce entities, and revised timelines for addressing tax fraud cases.

Simplification and Digital Transformation

The amendments emphasize reducing the taxation burden through simplified filing processes, expanded electronic solutions, and a move toward more transparent tax systems. Businesses can expect a reduction in paperwork and confusion, while individuals and corporations will gain access to clearer guidelines and improved support systems. These measures aim to ensure prompt tax payments and contribute to a more efficient and streamlined taxation framework.

Benefits to Businesses and Taxpayers

The amendments are particularly significant for businesses, as they aim to rationalize the tax regime. By simplifying compliance requirements and enhancing transparency, the changes enable businesses and taxpayers to better understand and fulfill their tax obligations. The government’s objective is to foster an environment where compliance is not only easier but also more cost-effective, thereby encouraging timely and accurate tax submissions.

Key Goals of the Amendments

1. Improved Compliance: Simplified procedures make it easier for taxpayers to meet regulatory requirements.
2. Streamlined Processes: Adoption of electronic solutions reduces manual intervention and administrative burden.
3. Enhanced Revenue Collection: By encouraging compliance, the government aims to increase tax revenues without overburdening taxpayers.
4. Business-Friendly Reforms: Rationalized rules and reduced complexity contribute to a more supportive environment for businesses.

In summary, the Finance (No. 2) Act, 2024 brings forward meaningful reforms to make tax compliance more accessible and efficient for businesses and individuals. These changes are expected to foster a more transparent and well-functioning tax ecosystem, benefiting taxpayers while aiding the government in achieving its revenue collection goals.

What are GST Amendments 2024?

The GST Amendment of 2024 act under the backdrop of the budget 2024 proposes certain changes to make compliance easier, improve information technology and rationalise taxes. Some of these changes respond to significant issues affecting operations of business entities, enhancing the effectiveness, clarity, and functionality of the GST regime.

Key Amendments in GST for FY 2024-25

Some of these changes are the introduction of a common timeline for demand notices, appeal process amendments, cut on penalties for e-commerce entities, and amnesty scheme of the compliance of 2017-2020, and transition credit rules for FY 2024-25. All these updates seek to find ways of reducing compliance cost and making it easier for firms to deal with taxes.

• Adding New GST Section 74A

Section 74A of GST has been introduced to introduce a time frame for issuing demand notices in fraud, willful misstatement or suppression of facts. It gives clarification of the timelines from FY 2024-25 where many codifications have already been made to these sections, and makes a more systematic way of decoding such cases.

• Modifications in GST Sections 73 and 74

Hence, the Assessment Committee has capped GST Sections 73 and 74 will be for cases up to FY 2023-24, basically leaving no provision for these sections for subsequent FYs. This change concerns better organising of the compliance and enforcement for past periods thus providing a more comprehensive outlook on tax recovery.

• New Sub-section (5) in Section 16

Another development of immense importance in GST Section 16 stipulates the new duration period for claiming ITC on invoices. A new Sub-section (5) has allowed claims for ITC for invoices of earlier fiscal years to help recover tax credits more flexibly.

• GST Appellate Tribunal (GSTAT) Amendments

In line with the amendments to be effective from 1st August 2024, the GASL has endeavoured to provide a period of up to three months to make appeals conveniently executing the dispute process. Also, the pre-deposit requirement has been lowered, thus, enabling the taxpayers to appeal against the decisions and judgments more and ease the appeal process and financial pressure.

• Modifications in GST Section 122

Recent amendments for penalties for e-commerce operators under Section 52 can be found in GST Section 122. Some changes make clearer understanding of the penalties concerning noncompliance with e-commerce tax collection and reporting rules. These changes have been proposed to follow GST norms better and minimise the violation of laws within the e-commerce industry.

• Adding New GST Section 128A

GST Section 128A discussed below presents an amnesty scheme for the period between the FY 2017 and 2020. It also enables the taxpayers to clear outstanding tax amounts under convenient terms of repayment. The eligibility criteria and compliance dates are proposed to promote voluntary compliance and provide efficient solutions for so-called ‘ zombies ’ disputes.

• Transitional Credit in GST Section 140

Additional rules under GST Section 140 have been prescribed to avail transitional input tax credit of the invoices, which have been issued before the appointed date of 1st of July 2017. This one is intended to permit the users to avail the credit which was availed by them under the previous system of indirect taxation and facilitate them to shield themselves under the arrangement of GST.

Other Key Changes in GST Amendments 2024

Some of the main changes brought to the GST Act in 2024 include, exclusion of co-insurance premium from supply under schedule III, new provisions relating to refund of export of goods under section 16, new provisions for cancellation or revocation of GST Registration under section 18 and GSTR 7 compliance even for those with no deduction or input tax credit. These changes are meant to improve understandability and Tax compliance for Tax payers.

• Schedule III – No Supply Transactions

Some of the supplies have even been exempt from the definition of supply under schedule III of the GST law like co-insurance premiums. This in effect implies that these premiums will not be subject to GST and this makes it easier for all contracting parties in co-insurance to deal with their tax status.

• Modifications to Refund Clauses (Section 54 & IGST Act)

The changes to Sections 54 and the IGST Act now contain limitations on expenditures on export duty on goods. This is all in an effort to streamline the refunds process while endorsing compliance to current changes on export duty regulation.

• GST Registration and Revocation (Section 30)

It required new rules concerning GST registration and revocation that defined new understanding of GST cancellation and reinstatement norms. Besides, these amendments simplify the common provisions relating to the conditions and procedures for the registration for or cancellation of GST registration for taxpayers.

• Modifications to TDS Return Filing (Section 39)

Section 39 has been added for the requirement of filing a TDS return. Even if no deductions have been made so far, the businesses will now have to file the GSTR-7 return. This change seeks to capture all the compliance associated with TDS in the GST system on a consistent and correct basis.

Impact of GST Amendments 2024 on Stakeholders

Concerning the amendments of GST for 2024: They aim at simplifying compliance burdens, reducing the financial burden and addressing the sectoral concerns. There will be four major positive impacts on businesses through greater efficiency in working; reduced pre-deposit requirement; predictable timelines for demanding notices; and improved value for money.

 However, specific changes such as refund and penalty may affect exporters and operators of electronic commerce.

• Simplified Compliance for Businesses

The Compliance Level under the 2024 GST amendments is improved through strengthening the ITC matching mechanism and modifications to return forms. It eliminates cumbersome administrative barriers such as the unified demand notice timeline and the new rules for appealing filing all of which ease compliance for businesses.

• Financial Implications

The amendments also contribute to introducing the amendments in the precondition of reduction of pre-deposit, bearing in mind that they facilitate the financial burden of the companies that file appeals. This will assist both the less and large business entities including the management of their cash flows and the enhancement of their access to justice mechanism over the various disputes without necessarily having to break the bank to do so.

• Sector-Specific Impact

Exporters should expect that their refunds for export duties will be conditioned while the e-commerce operators must abide by the new Section 52 penalties. These amendments are different upon sectors for example, efficient refund means fewer chances for which could have an impact on the e-commerce businesses conformity and can have an impact on their future performance as well as working plans. 

Conclusion on GST Amendments

The GST Amendments of 2024 bring about major changes with regard to enhancing compliances and setting efficient practices. These modifications are as follows: easier appeals, less severe penalties for e-commerce participants and ITC extension. Businesses should always keep abreast of these changes so that they can be in a better position to order. To get better understanding consult tax advisors or attend GST seminars.

We are using our expertise in helping you deal with the new or changed GST amendments and keep you out of trouble. We have the expertise in the new regulations to eliminate the clutter in GST filing and appeal and enable you to concentrate on developing your business. Allow us to optimise your compliance and improve your operations.

FAQs on GST Amendments 2024

How can small businesses comply with the new GST amendments?

Small businesses should focus on updating their processes for return filings and ITC reconciliation. Adapting to the new timelines and simplified filing requirements can ease the compliance burden, ensuring that all returns are filed on time and in line with the updated regulations.

Are there new provisions for late fee waivers under the 2024 amendments?

Yes, the 2024 amendments provide waivers on late fees for certain periods, particularly under the amnesty scheme for fiscal years 2017-2020. This offers businesses relief by reducing penalties for non-compliance during those years, provided they meet the compliance deadline.

How does Section 74A impact GST compliance for fraud cases?

Section 74A introduces a unified timeline for demand notices in cases of fraud or willful misstatement. This ensures a clearer and more predictable process, helping businesses understand the time frame for rectifying issues related to fraud or incorrect filings under GST.

What steps should exporters take in light of the new refund restrictions?

Exporters should carefully review the updated refund eligibility criteria under Section 54 and the IGST Act. They must ensure that all required documentation is accurate and timely submitted to comply with the new restrictions, ensuring smoother processing of export-related refunds.

How does the introduction of schedule III affect insurance and financial sectors?

The changes to Schedule III exclude certain transactions, like co-insurance premiums, from the definition of supply. This has specific implications for the insurance and financial sectors, as it clarifies which transactions are not subject to GST, potentially reducing compliance burdens for these businesses.