Union Budget 2024-25: GST Reforms to Simplify Taxation and Benefit the Common Man

New Delhi: In her Union Budget 2024-25 speech delivered in Parliament today, Union Minister of Finance and Corporate Affairs, Nirmala Sitharaman, highlighted the significant impact of the Goods and Services Tax (GST) on reducing the tax burden on common man, cutting down compliance costs, and lowering logistics expenses for businesses. She described GST as a monumental success, reflecting its transformative role in India’s tax landscape.

To further enhance the efficiency of the GST framework, several key amendments have been proposed. Notably, Extra Neutral Alcohol used in the manufacture of liquor will be excluded from central tax, with similar adjustments suggested for the Integrated GST (IGST) and Union Territory GST (UTGST) Acts. Additionally, a new Section 11A will grant the government the authority to address issues of non-levy or short levy of central tax resulting from prevalent trade practices.

The Finance Minister announced a relaxation in the time limit for availing input tax credit through the insertion of two new subsections to Section 16 of the Central GST (CGST) Act. The revised Act will also standardize the time limits for issuing demand notices and orders. Moreover, the period for taxpayers to benefit from reduced penalties—by paying the demanded tax along with interest—has been extended from 30 days to 60 days.

In a bid to ease the appeal process, the maximum pre-deposit amount for filing an appeal with the Appellate Authority will be reduced from ₹25 crore to ₹20 crore of central tax. Similarly, the pre-deposit requirement for appeals to the Appellate Tribunal will be cut from 20% with a maximum of ₹50 crore to 10% with a maximum of ₹20 crore of central tax. The time limit for filing appeals before the Appellate Tribunal will also be adjusted, effective from August 1, 2024, to prevent delays caused by the Tribunal’s operational timeline.

Further reforms include empowering the government to notify the GST Appellate Tribunal to handle anti-profiteering cases, aiming to streamline trade practices.