New Delhi, February 1, 2025 – The Union Minister for Finance and Corporate Affairs, Smt. Nirmala Sitharaman, presented the Union Budget 2025-26 in Parliament today, highlighting significant amendments to Goods and Services Tax (GST) laws aimed at facilitating trade and ensuring compliance.
Key Proposals Include:
- Distribution of Input Tax Credit:
Starting April 1, 2025, the Budget proposes the distribution of input tax credit by Input Service Distributors for inter-state supplies subject to reverse charge mechanisms. - Unique Identification Marking:
A new clause will define Unique Identification Marking for the implementation of a Track and Trace Mechanism to improve supply chain transparency. - Supplier Tax Liability Reduction:
Provisions for the reversal of input tax credit will be required if a credit note is availed, enabling a reduction in the supplier’s tax liability. - Mandatory Pre-Deposit for Appeals:
A 10% mandatory pre-deposit of the penalty amount will be required for appeals before the Appellate Authority in cases involving penalties without corresponding tax demands. - Penalties for Track and Trace Violations:
New penalties will be introduced for contraventions related to the Track and Trace Mechanism. - Revisions in Schedule III of the CGST Act, 2017:
Supplies of goods warehoused in Special Economic Zones (SEZ) or Free Trade Warehousing Zones to any person before export clearance or to the Domestic Tariff Area will be treated neither as a supply of goods nor services. No tax refunds will be available for such transactions, effective retroactively from July 1, 2017. - Expanded Definitions:
The definitions of ‘Local Fund’ and ‘Municipal Fund’ will be incorporated into the broader definition of “local authority.” - Filing Restrictions:
New conditions and restrictions will be imposed for filing returns.
The implementation of these amendments will be coordinated with State governments, following the recommendations of the GST Council.
Source:PIB
