KHANDHAR & ASSOCIATES

CHARTERED ACCOUNTANTS

GST WEEKLY UPDATE : 45/2023-24 (04.02.2024)

1. Budget proposal for the change in ISD & Penal provision:

Sr. Existing provision Amended provision (effective date to be

No. notified)
1 Clause (61) of Sec. 2 of CGST Act, 2017 Clause 61 of Sec. 2 of CGST Act, 2017 is
states as "Input Service Distributor" substituted as, “Input Service Distributor”
means an office of the supplier of goods or means an office of the supplier of goods or
services or both which receives tax services or both which receives tax invoices
invoices issued under section towards the receipt of input services, including
31 towards the receipt of input services invoices in respect of services liable to tax
and issues a prescribed document for the under sub-section (3) or sub-section
purposes of distributing the credit of (4) of section 9, for or on behalf of distinct
central tax, State tax, integrated tax or persons referred to in section 25, and liable to
Union territory tax paid on the said distribute the input tax credit in respect of
services to a supplier of taxable goods or such invoices in the manner provided in
services or both having the same section 20;’.
Permanent Account Number as that of
the said office;
2 Sec. 20(1) The Input Service Distributor
“Sec.20. (1) Any office of the supplier of
shall distribute the credit of central tax as
goods or services or both which receives tax
central tax or integrated tax and invoices towards the receipt of input
integrated tax as integrated tax or central
services, including invoices in respect of
tax, by way of issue of a document services liable to tax under sub-section (3) or
containing the amount of input tax credit
sub-section (4) of section 9, foror on behalf of
being distributed in such manner as may
distinct persons referred to in section 25,
be prescribed. shall be required to be registered as Input
Service Distributor under clause (viii) of
(2) The Input Service Distributor may
section 24 and shall distribute the input tax
distribute the credit subject to the
creditin respect of such invoices.
following conditions, namely:-

(a) the credit can be distributed to

(2) The Input Service Distributor shall
the recipients of credit against a
distribute the credit of central tax or
document containing such details as
integrated tax charged on invoices received by
may be prescribed; him, including the credit of central or
(b) the amount of the credit integrated tax in respect of services subject to
distributed shall not exceed the levy of tax under sub-section (3) or sub-
amount of credit available for section (4) of section 9 paid by a distinct
distribution; person registered in the same State as the said
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 KHANDHAR & ASSOCIATES
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Input Service Distributor, in such manner,
(c) the credit of tax paid on input
within such time and subject to such
services attributable to a recipient
of credit shall be distributed only to restrictions and conditions as may be
that recipient;
prescribed.
(d) the credit of tax paid on input
(3) The credit of central tax shall be
services attributable to more than
distributed as central tax or integrated tax
one recipient of credit shall be
and integrated tax as integrated tax or central
distributed amongst such recipients
tax, by way of issue of a document containing
to whom the input service is
the amount of input tax credit, in such
attributable and such distribution
manner as may be prescribed.”
shall be pro rata on the basis of the
turnover in a State or turnover in a
Union territory of such recipient,
during the relevant period, to the
aggregate of the turnover of all such
recipients to whom such input
service is attributable and which are
operational in the current year,
during the said relevant period;

(e) the credit of tax paid on input

services attributable to all
recipients of credit shall be
distributed amongst such recipients
and such distribution shall be pro
rata on the basis of the turnover in a
State or turnover in a Union
territory of such recipient, during
the relevant period, to the aggregate
of the turnover of all recipients and
which are operational in the current
year, during the said relevant
period.

Explanation.- For the purposes of

this section,-

(a) the "relevant period" shall be-

(i) if the recipients of credit have

turnover in their States or Union
territories in the financial year
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 KHANDHAR & ASSOCIATES
CHARTERED ACCOUNTANTS
preceding the year during which
credit is to be distributed, the said
financial year; or
(ii) if some or all recipients of the
credit do not have any turnover in
their States or Union territories in
the financial year preceding the year
during which the credit is to be
distributed, the last quarter for
which details of such turnover of all
the recipients are available,
previous to the month during which
credit is to be distributed;

(b) the expression "recipient of

credit" means the supplier of goods
or services or both having the same
Permanent Account Number as that
of the Input Service Distributor;

(c) the term "turnover", in relation

to any registered person engaged in
the supply of taxable goods as well
as goods not taxable under this Act,
means the value of turnover,
reduced by the amount of any duty
or tax levied 1[under entries 84
and 92A] of List I of the Seventh
Schedule to the Constitution and
entries 51 and 54 of List II of the
said Schedule.
3. Insertion of new section 122A. “122A. (1)
NA
Notwithstanding anything contained in this
Act, where any person, who is engaged in the
manufacture of goods in respect of which any
special procedure relating to registration of
machines has been notified under section 148,
acts in contravention of the said special
procedure, he shall, in addition to any penalty
thatis paid or is payable by him under Chapter
XV or any other provisions of this Chapter, be
liable to pay a penalty equal to an amount of

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 KHANDHAR & ASSOCIATES
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one lakh rupees for every machine not so
registered.

(2) In addition to the penalty under sub-

section (1), every machine not so registered
shall be liablefor seizure and confiscation:

Provided that such machine shall not be

confiscated where––

(a) the penalty so imposed is paid, and

(b) the registration of such machine is made

in accordance with the special procedure
within three days of the receipt of
communication of the order of penalty.”

2. E-Invoice System: Update for Quick Actions:

To access the portal, users can log in for various functions such as enabling e-Invoice
functionality, downloading e-Invoice JSONs, and submitting e-Invoice exemption declarations.
The portal also provides news and updates along with video links. Users can find detailed
information in the “About” section, which covers an overview, background, and details about
the Invoice Registration Portal (IRP).

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 KHANDHAR & ASSOCIATES
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For resources related to e-invoices, the portal offers notifications, circulars, master codes,
manuals, schema/validations (Version 1.1), and Frequently Asked Questions (FAQs).
Additionally, various services are available, such as checking the e-Invoice enablement status
of taxpayers, enabling e-Invoice functionality, searching for Harmonized System of
Nomenclature (HSN) codes, viewing/updating the Annual Aggregate Turnover (AATO), and
searching for IRNs. The mobile app provides convenient access to these features.

3. AAR & Important Judgements:

(i) AAR On GST on Manpower Services to Panchayats:

(Applicant – Manish Manpower Agency)

GST Authority for Advance Ruling (AAR) Karnataka decision regarding the tax implications on
the supply of manpower services by Manish Manpower Agency to Zilla Panchayat, Taluka
Panchayat, and various government departments.

Manpower services like cleaning staff, cook, assistant cook, staff nurse, teachers, and
watchman provided to hostels and residential schools/colleges run by Social Welfare
Department were deemed exempt. This exemption was justified by fulfilling both conditions
mentioned in Entry No.3 of Notification No.12/2017-Central Tax (Rate).

The AAR clarified that services like Data Entry Operator, Drivers, “D” Group staff, FDA, SDA,
Typists supplied to Zilla Panchayat/Taluk Panchayat/Social Welfare Department/Backward
Classes Welfare Department are not related to functions entrusted to Panchayats or
Municipalities. Hence, these services attract GST at the rate of 18% (9% CGST and 9% SGST).

Disclaimer:
This publication contains information for general guidance only. It is not intended to address the
circumstances of any particular individual or entity. Although the best of endeavour has been
made to provide the provisions in a simpler and accurate form, there is no substitute to detailed
research with regard to the specific situation of a particular individual or entity. We do not accept
any responsibility for loss incurred by any person for acting or refraining to act as a result of any
matter in this publication.

THANKING YOU.

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