[Opinion] Analyzing Notification No. 17/2024 – Central Tax and Its Implications on the Finance (No. 2) Act, 2024

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Notification No. 17/2024

R. Muthukumaran – [2024] 167 taxmann.com 31 (Article)

Introduction

The Ministry of Finance, through the Central Board of Indirect Taxes and Customs (CBIC), issued Notification No. 17/2024 – Central Tax on 27th September 2024 (S.O. 4253(E)). This notification brings into force various provisions of the Finance (No. 2) Act, 2024 (15 of 2024), specifically sections that amend the Central Goods and Services Tax (CGST) Act, 2017. The notification marks key implementation dates:

  • Date of publication in the Official Gazette for sections 118, 142, 148, and 150 of the Finance Act, 2024.
  • 1st November 2024 for sections 114 to 117, 119 to 141, 143 to 147, 149, and 151 to 157.

This article analyzes the individual sections of the Finance Act that have been activated by the notification, mapping each to the corresponding section of the CGST Act, along with the legislative purpose and the expected impact.

1. Breakdown of Finance Act Provisions with CGST Act Correlation

The following table provides a section-wise breakdown of the Finance (No. 2) Act, 2024 and its corresponding CGST sections, including an explanation of their intended legislative purpose.

Finance Act Section CGST Section Purpose
Section 114 Section 9 Amends the levy of CGST, including changes to the taxation of certain goods and services.
Section 115 Section 10 Revises the composition scheme under CGST to expand its scope and eligibility criteria.
Section 116 Section 11A Introduces Section 11A to provide relief for non-recovery of tax based on general practice.
Section 117 Section 13 Adjusts the provisions for determining the time of supply for services under GST.
Section 118 Section 16 Modifies the eligibility conditions for Input Tax Credit (ITC) to streamline compliance.
Section 119 Section 17 Restricts ITC availability further, aligning with government objectives to curb misuse.
Section 120 Section 21 Revises conditions for cancellation of GST registration, providing additional safeguards.
Section 121 Section 30 Facilitates easier revocation of registration cancellation, supporting business continuity.
Section 122 Section 31 Amends provisions for issuance of invoices to reduce compliance burden.
Section 123 Section 35 Revises the requirements for maintenance of records and accounts.
Section 124 Section 39 Updates the process for furnishing returns to improve timely filing and accuracy.
Section 125 Section 49 Introduces changes in the utilization of ITC, simplifying credit management.
Section 126 Section 50 Clarifies the conditions for interest on delayed payments of tax, ensuring fairness.
Section 127 Section 51 Adjusts provisions for Tax Deduction at Source (TDS), aligning with updated tax policies.
Section 128 Section 54 Updates the refund process, particularly for export-oriented and zero-rated supplies.
Section 129 Section 61 Strengthens the framework for scrutiny of returns filed under CGST.
Section 130 Section 62 Provides clarity on the assessment of non-filers of returns, enhancing tax administration.
Section 131 Section 63 Revises the rules for the assessment of unregistered persons.
Section 132 Section 64 Revises provisions for summary assessments.
Section 133 Section 65 Enhances audit powers of tax authorities for audit of registered persons under CGST.
Section 134 Section 66 Revises provisions for special audits.
Section 135 Section 70 Expands powers related to summoning individuals for evidence during GST investigations.
Section 136 Section 73 Adjusts the provisions for determination of tax in non-fraud cases.
Section 137 Section 74 Updates rules for tax determination in cases of fraud or suppression of facts.
Section 138 Section 74A Introduces Section 74A, enabling retrospective tax determination for specified periods.
Section 139 Section 75 Broadens general rules for tax determination, with a focus on transparency.
Section 140 Section 104 Revises the appeals process under CGST, emphasizing faster resolution.
Section 141 Section 107 Simplifies the appeals process to Appellate Authority.
Section 142 Section 109 Establishes jurisdiction for the Appellate Tribunal to handle appeals effectively.
Section 143 Section 112 Revises the appeal procedures to the Appellate Tribunal under CGST.
Section 144 Section 122 Updates penalty provisions under CGST to address new compliance challenges.
Section 145 Section 127 Modifies provisions related to penalties for specific offenses.
Section 146 Section 128A Introduces waiver provisions for interest and penalties for certain disputes.
Section 147 Section 140 Addresses transitional provisions for unutilized ITC.
Section 148 Section 171 Amends anti-profiteering measures, emphasizing consumer protection.
Section 149 Schedule III Adds provisions to clarify activities not considered supply of goods/services (e.g., financial services, insurance).
Section 150 Refund Limitations Further restricts refunds of Input Tax Credit under old Section 16. 
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