Read all the updates and GST changes from January 1 2023 stated by CBIC.
In accordance with several rulings issued by the Central Board of Indirect Taxes and Customs (CBIC) earlier this month in the 48th GST Council Meeting, certain decisions pertaining to the Goods and Services Tax (GST) take effect from January 1, 2023.
1. GST Exemption on Rental Homes
According to CBIC, if a GST registered person rents a residential property in their individual capacity to use as their primary residence, no GST is due. When the residence is rented for his own use and not for business purposes, this exemption applies. This clarifies the proprietors of firms’ GST responsibility on rental premises. This amendment related to GST exemption for rental property will be implemented if:
- The registered person is proprietor of a proprietorship concern and rents the residential dwelling in his personal capacity for use as his own residence;
- Such renting is on his own account and not that of the proprietorship concern
This is as per GST Rate Notification 15/2022.
2. GST Rate Changes
As per GST Rate Notification No. 12/2022 and GST Rate Notification No. 13/2022 both dated 30th December 2022 –
The tax rate modifications approved by the Council, according to CBIC, will go into effect on January 1st. As a result, instead of the current 18% GST, ethyl alcohol sent to refineries for blending with motor spirit (petrol) will only be subject to 5% GST.
Pulse husk, such as those of chilka, chuni/churi, and khanda, would likewise be excluded rather than subject to tax. In addition, if these supplies have been exempted, they will be treated on “as is basis” from January 1, 2023, as a relief measure. In other words, the products listed above for cattle feed and the husks of pulses are exempt from paying GST.
Additionally, pencil sharpeners have been excluded from 12% GST, contrary to prior practice. However, mathematics boxes, colour boxes, and geometry boxes will be subject to a GST rate of 12%.
The non-carbonated drinks made from fruit pulp or juice will be subject to a 12% GST charge.
3. Decriminalize certain provisions of the law
In order to help the facilitation of trade, the GST Council has recommended the following:
- Raise the minimum threshold of tax amount for launching prosecution under GST from Rs. 1 Cr to Rs. 2 Cr, except for the offence of issuance of invoices without supply of goods or services or both
- Reduce the compounding amount from the present range of 50% to 150% of tax amount to the range of 25% to 100%
- Decriminalize certain offences specified under clause (g), (j) and (k) of sub-section (1) of section 132 of CGST Act, 2017, viz.-
- obstruction or preventing any officer in discharge of his duties;
- deliberate tempering of material evidence
- failure to supply the information.
4. GST Reverse Charge Changes
According to GST Rate Notification No. 14/2022-Central Tax, the supply of bergamot oil, spearmint oil, water mint oil, horsemint oil, and peppermint essential oil (Mentha piperita) by any unregistered person to registered persons is subject to GST on a reverse charge basis. Sales made on or after January 1st, 2023 are covered only.
The collection of tolls on an annuity basis would be exempt.
5. Input Tax Credit under GST changes from January, 2023
- The Finance Ministry made an announcement recently that a taxpayer under the Goods and Services Tax (GST) will be required to reverse the input tax credit (ITC) obtained by November 30 in the event his supplier failed to deposit the requisite taxes by September 30.
- Additionally, the CBIC also released few circulars (GST Circular No 183 and Circular No 184) that suggest procedures that will be applied to the ongoing proceedings for FY 2017-18 & 2018-19 and pending adjudications, or appeal proceedings related to FY 2017-18 & 2018-19 regarding mismatch in GSTR 3B and GSTR 1.
- Another important change announced around ITC under GST is regarding Rule 88C. CBIC issued guidelines for recovery proceedings under the provisions of Section 79 of the CGST Act, 2017. It instructed for providing of opportunity to the affected taxpayer to explain the differences between GSTR-1 and GSTR-3B by sending a letter, before initiation of action under Section 79 of the CGST Act, 2017. To standardize the entire recovery proceedings, Rule 88C has been inserted in the CGST Rules, 2017.
To read more about Rule 88C, read here.
6. GST Registration and Aadhar Authentication
Aadhar Authentication was made mandatory for new GST registration from 21 August 2020 onwards. However, the process being followed was not streamlined properly. To handle this issue, now the government has made it completely automatic and no time is lost in physical verification. So, when your Aadhar Authentication is complete (online), only then will the GST verification application be complete.
Note: PAN-linked email and mobile can now be used in conjunction with GST Registration or biometric authentication.
These are the 6 important GST changes from January 2023 that taxpayers need to look out for! We are also adding the link to our GST compliance calendar for Jan 2023 below so that you can download it and file your GST returns on time.
GST Return Filing Due Dates for January 2023
It is important for registered taxpayers to timely file their GST returns and pay their GST dues. We have prepared a GST Compliance Calendar for January 2023; It is a comprehensive image of our GST Compliance Calendar. It has all the GST Due dates for January 2023 so that you never miss a due date!
Check it out here: GST Due Dates Calendar January 2023
Best software to reconcile GST data faster and ensure 100% compliance – IRIS GST Software
As a registered taxpayer, reconciling your purchase invoices with the supplier-uploaded invoices on the GST system is a critical activity as it determines your ITC claim. Further, the Government issues legal notices to taxpayers for discrepancies in the ITC claimed in GSTR 3B and the amount as per supplier uploaded details. Our Smart Reconciliation comes in handy for managing reconciliation tasks in a timely, efficient and easy manner.