Tax Talk
Indian Developments

Indirect Tax

Goods and Services Tax

The CBIC has notified the rate changes and issued the clarifications as recommended during the 50^th GST Council meeting. The same can be view here.

Amendments to GST law set to come into effect from 1 October 2023

Notification Nos. 27/2023-Central Tax and 28/2023-Central Tax both dated 31 July 2023

The Central Board of Indirect Taxes and Customs (CBIC) has notified the amendments proposed to the CGST Act and IGST Act vide Finance Act, 2021 and Finance Act, 2023. These amendments shall come into effect from 1 October 2023. However, the amendments relating to setting up of GST Tribunals have been brought into force from 1 August 2023.

The Finance Act, 2021 has proposed an amendment inter alia to Section 16 of the IGST Act to exclude supplies made to SEZ units and/or developers for any purpose other than the authorized operations from the scope of 'zerorated supply.' It has further empowered the government to notify the class of persons and the class of goods or services, which shall be allowed refund against exports made on payment of IGST. Section 16 also provides for deposit of refund received in case of non-realization of sales proceeds within the prescribed FEMA timeline in case of export of goods.

The key amendments vide Finance Act, 2023 can be view here.

Customs

Tariff rate for 'Liquified Propane', 'Liquified Butane' and 'Liquified Petroleum Gas' hiked, but effective BCD retained at 2.5% and 5% respectively

Notification Nos. 40 to 42/2023-Customs dated 30 June 2023, and 43 to 45/2023-Customs dated 1 July 2023

The import tariff rate for Liquified Propane and Liquified Butane has been hiked from 2.5% and for Liquified Petroleum Gas from 5%, to 15% from 1 July 2023 onwards. However, the effective rate of Basic Customs Duty (BCD) on said goods has been retained at 2.5% and 5%, respectively by way of amendments to Notification No. 50/2017-Customs. Additionally, an Agriculture Infrastructure Development Cess (AIDC) has been imposed at 15% except where Indian Oil Corporation Limited imports the same, Hindustan Petroleum Corporation Limited or Bharat Petroleum Corporation Limited for supply to household domestic consumers or Non-Domestic Exempted (NDEC) customers.

CBIC addresses HS Code concerns for Customs clearances under India-Japan CEPA

Instruction No. 19/2023-Customs dated 4 July 2023

Addressing the issue of the use of different versions of HS Codes in the Certificate of Origin (CoO) and Bill of Entry (B/E) for imports under the India-Japan Comprehensive Economic Partnership Agreement (CEPA), CBIC has clarified that the HS Code (2007 version) mentioned in the CoO issued under the India-Japan CEPA should be correlated with the HS Code (2022 version) mentioned in the B/E at the time of Customs clearance.

CBIC standardizes documentary and information requirements for AD Code registration/modification in relation to exports

Instruction No. 25/2023-Customs dated 28 July 2023

Acknowledging the need to minimize and standardize documentary requirements (as well as information necessary to be contained therein) across all Customs zones, the CBIC has directed the field formations to place reliance on only the following two documents (using a digital signature) on e-Sanchit for purposes of approval of AD Code/bank account registration:

• Bank's Authorization Letter with specified particulars
• Copy of canceled cheque related to said Bank Account No. (or the latest bank statement endorsed by the Bank).

Furthermore, it has been directed to put in place a suitable mechanism to ensure that the application for AD Code/ bank account registration is dealt with on the same day when made before 2 PM, while in other cases, it should be disposed of before 2 PM on the next working day.