GST Compendium: September 2024

The September edition of the GST Compendium offers a comprehensive overview of the latest developments from the 54th GST Council meeting, including key recommendations on the import of services by airline companies, the application of GST on life and health insurance, and the rollout of e-invoicing for B2C transactions. This edition also covers the latest updates in erstwhile indirect tax law, customs and direct taxes, including significant Supreme Court rulings, Tribunal decisions, and CBDT clarifications, affecting diverse sectors and businesses.

Key highlights of the GST Compendium September 2024:

Important updates/announcements: The GSTN announced the launch of the Invoice Management System (IMS) starting from 1 October 2024. This system is designed to resolve invoice mismatches, simplify the validation process, and improve input tax credit claims transparency. Businesses must update their internal processes to comply with these new requirements.

Key judicial pronouncements: The issue of the taxability of royalty has long been debated under the erstwhile service tax regime, and this uncertainty continued into the GST era. However, the Supreme Court has finally resolved this dispute by ruling that royalty is not a tax, allowing states to recover tax on royalty retrospectively from 1 April 2005. This decision could pose financial challenges for businesses making royalty payments as they may face tax demands under the previous service tax regime and the current GST framework.

Significant updates in direct taxes: The CBDT has specified certain circumstances where electronic communication is not required for faceless assessment. Further, the CBDT has provided relief from the applicability of a higher rate of TDS/TCS due to inoperative PAN in case of the demise of deductees/collectees. The CBDT has also provided clarification regarding amendments in provisions related to the tax clearance certificate for persons domiciled in India.