{"id":15863,"date":"2025-02-01T12:44:54","date_gmt":"2025-02-01T12:44:54","guid":{"rendered":"https:\/\/www.msassociates.pro\/articles\/?p=15863"},"modified":"2025-02-01T13:46:30","modified_gmt":"2025-02-01T13:46:30","slug":"finance-bill-2025-indirect-taxation","status":"publish","type":"post","link":"https:\/\/www.msassociates.pro\/articles\/finance-bill-2025-indirect-taxation\/","title":{"rendered":"Finance Bill 2025 – Indirect Taxation"},"content":{"rendered":"

Summary of Amendments \u2013 INDIRECT TAXATION<\/h2>\n

Goods and Services Tax:<\/h3>\n

1. Input Service Distributor can now distribute ITC availed on taxes paid under reverse charge under CGST, SGST and IGST<\/p>\n

2. Finance Bill proposes to define local fund and municipal fund as a fund which is under the control or management of an authority discharging civic functions of Panchayat Area \/ Metropolitan Area holding powers to collect taxes, cess etc.,<\/p>\n

3. Time of supply related to vouchers under the GST Law has been deleted in toto. With this, time of supply of these transactions will be governed by regular provisions;<\/p>\n

4. Retrospective amendment of the term \u201cplant or machinery\u201d as \u201cplant and machinery\u201d under blocked credits<\/p>\n

\n\n\n\n
Prior to this amendment, clause 17(5)(d) read as follows \u2013<\/p>\n

Goods or services received for construction of an immovable property (other than plant or machinery) cannot be availed as ITC<\/td>\n

Upon interpretation of the said clause, Hon\u2019ble Supreme Court (Safari Retreats case) allowed ITC on construction of an immovable property if it qualifies as a \u201cplant\u201d after fulfilment of the prescribed functionality test.<\/td>\nIn response to the said judgment, the Finance Bill proposes to amend the clause as \u201cplant and machinery\u201d retrospectively with effect from 01.07.2017, treating it as a drafting flaw, denying ITC on construction of a plant which is an immovable property<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n

5. Reduction of tax on credit note can be effected from output tax liability by the supplier only if:
\n(a) ITC attributable to this credit note, if availed, is reversed by the registered recipient
\n(b) Incidence of tax on such supply is passed on to any other person<\/p>\n

6. GSTR 2B was regarded as an \u201cauto generated statement\u201d under GST Law. This is now renamed as a \u201cstatement\u201d. Further, an amendment is made to extend powers to the Government to include new components \/ reports in GSTR 2B<\/p>\n

7. Where an order is passed demanding penalty (without demand of taxes), then pre-deposit to prefer an appeal before First Appellate Authority is now prescribed at 10% of penalty demand.<\/p>\n

8. Where an order is passed demanding penalty (without demand of taxes), then pre-deposit to prefer an appeal before Appellate Tribunal is now prescribed at 10% of penalty demand (in addition to the pre-deposit paid before the Appellate Authority).<\/p>\n

9. The Finance Bill has proposed a new provision for tracking specific goods \/ persons to be prescribed \u2013<\/p>\n

(a) A system may be introduced for affixing unique identification marking (UIM) \/ for electronic storage and access of information contained therein
\n(b) UIM includes a digital stamp, digital mark or the like, which is unique, secure and non-removable
\n(c) A UIM may be prescribed for such goods
\n(d) Persons in possession \/ who deal with such goods are required to \u2013
\n\u2022 Affix UIM
\n\u2022 Furnish necessary information \/ details to the Government
\n\u2022 Furnish details of machinery installed for manufacturing such goods
\n\u2022 Pay any amount in relation to UIM system, as prescribed
\n(e) Penalty for non-compliance of the above provision would be Rs. 1,00,000 or 10% of tax payable on goods, whichever is higher;<\/p>\n

10. Supply of goods warehoused in SEZ or in Free Trade Warehousing Zone to any person before clearance for exports \/ DTA is now regarded as \u201cNeither supply of goods nor supply of services (Schedule III)\u201d. This amendment is made with retrospective effect from 01.07.2017. It is further clarified that no refund shall be extended for all taxes collected on the above transaction till date.<\/p>\n","protected":false},"excerpt":{"rendered":"

Summary of Amendments \u2013 INDIRECT TAXATION Goods and Services Tax: 1. Input Service Distributor can now distribute ITC availed on taxes paid under reverse charge under CGST, SGST and IGST 2. Finance Bill proposes to define local fund and municipal fund as a fund which is under the control or management of an authority discharging […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9],"tags":[],"class_list":["post-15863","post","type-post","status-publish","format-standard","hentry","category-indirect-tax"],"yoast_head":"\nFinance Bill 2025 - Indirect Taxation<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.msassociates.pro\/articles\/finance-bill-2025-indirect-taxation\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Finance Bill 2025 - Indirect Taxation\" \/>\n<meta property=\"og:description\" content=\"Summary of Amendments \u2013 INDIRECT TAXATION Goods and Services Tax: 1. 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