GST Compendium: August 2024

The August edition of the GST compendium presents expert analysis on recent developments, including the Union Budget's legislative amendments, GST Council updates, and significant judicial decisions on customs duty, royalty, and direct tax proposals. Our team of experts breaks down the impact of these changes on businesses and the economy, providing clarity and insights.

Key highlights of the GST Compendium August 2024:

Important updates/announcements: The Finance Minister presented a transformative Union Budget on 23 July 2024 paving path on the vision of ‘Viksit Bharat’. On the GST front, the legislative amendments recommended in the 53rd GST Council meeting have been proposed in the Finance Bill. On the customs front, the budget has proposed several changes to support domestic manufacturing and promote exports. In addition, various changes have been made to the Customs Tariff to facilitate' Make in India.'

Key judicial pronouncements: The 9-judge bench of the Supreme Court (SC), in a majority judgement, has held that royalty and dead rent do not qualify as taxes or impositions. This verdict has far-reaching consequences as numerous cases related to service tax and GST were previously stayed by due to pendency of SC decision. However, the SC has reserved the judgement with regard to its retrospective or prospective application which needs to be closely tracked.

Important developments in direct taxes: The Central Board of Direct Taxes has issued a direction to Principal Commissioner of Income Tax  to accept delayed tax payments under the Direct Tax Vivad se Vishwas Act, 2020 (subject to certain conditions). On the judicial front, the SC has upheld that the explanation to Section 9 of the Income-tax Act, 1961, which was replaced vide Finance Act, 2010, is applicable prospectively. Hence, there is no liability to withhold tax based on the said explanation for prior years.