New GST Updates Effective from October 10 2024
New GST Updates Effective from October 10 2024 The Indian GST regime has undergone several important changes, with 8 new notifications issued on October 8, 2024, coming into effect from October 10, 2024. These amendments cover a wide range of areas including reverse charge mechanism (RCM) on goods and services, GST rate changes, and new exemptions. In this blog, we’ll delve into these updates, helping you understand the implications and compliance requirements for businesses.
Amendment in Reverse Charge Mechanism (RCM) for Goods
New GST Updates Effective from October 10 2024 One of the key updates is the extension of the RCM to specific categories of goods, particularly metal scrap. The government has issued Notification No. 06/2024-Central Tax (Rate), which amends the original Notification No. 4/2017-Central Tax (Rate) dated June 28, 2017. Under the new rules, metal scrap falling under HSCN codes 72, 73, 74, 75, 76, 77, 78, 79, 80, or 81 will now be subject to RCM when supplied by an unregistered supplier. New GST Updates Effective from October 10 2024 This means that registered recipients of these goods will be responsible for paying GST instead of the supplier.
The purpose of this change is to streamline compliance and ensure that tax collection is not lost in transactions involving unregistered suppliers. This change has been mirrored in amendments to both Union Territory Tax (Rate) and Integrated Tax (Rate) notifications, making it applicable across India uniformly. New GST Updates Effective from October 10 2024
Introduction of RCM for Renting Services
New GST Updates Effective from October 10 2024 Another major update is the inclusion of renting of property (other than residential dwellings) under the RCM when supplied by an unregistered person. This has been introduced through Notification No. 09/2024-Central Tax (Rate), amending Notification No. 13/2017-Central Tax (Rate). The recipient, if registered, will now be liable to pay GST on such services, closing a potential loophole where tax liability could have been avoided. This notification aligns with similar amendments in UTGST and IGST regulations.
New GST Rate on Passenger Transportation Services
New GST Updates Effective from October 10 2024 The GST Council has introduced a new GST rate on transportation of passengers by helicopter on a seat-share basis through Notification No. 07/2024-Central Tax (Rate). The applicable GST rate is set at 5% (2.5% CGST + 2.5% SGST), provided the supplier does not claim input tax credit (ITC) on goods used to provide the service. This new rate aims to support tourism and make helicopter transportation services more accessible.
New GST Exemptions for Specific Services
A major focus of the recent amendments has been on streamlining exemptions for various services. Notification No. 08/2024-Central Tax (Rate) amends the original Notification No. 12/2017-Central Tax (Rate) to include new exemptions. Some of the key additions are: New GST Updates Effective from October 10 2024
- Metering Equipment and Electricity Services: Supply of services incidental to electricity distribution, such as metering equipment on rent, testing for meters/transformers, shifting of meters/service lines, etc., are now exempt.
- Research and Development Services: Services provided by research institutions (funded through grants) and universities falling under Heading 9981 will be exempt, provided they are approved under clauses (ii) or (iii) of subsection (1) of Section 35 of the Income Tax Act, 1961.
- Educational Services: Services of affiliation provided by a Central or State Educational Board to a government-established school will be exempt, classified under Heading 9992.
These changes are expected to reduce compliance costs for specific industries and encourage research, development, and educational initiatives.
Aligning Skill Development Services under NCVET
In another crucial update, the GST notifications have aligned the definition and scope of services provided by the National Skill Development Corporation (NSDC) and related bodies to fall under the National Council for Vocational Education and Training (NCVET). Previously, these were recognized under the National Council for Vocational Training (NCVT), but the new amendment brings clarity and updates the nomenclature.
As per Notification No. 08/2024-Central Tax (Rate), this alignment ensures that entities recognized by NCVET are covered under specific exemption categories for skill development and vocational training services. This is expected to streamline the implementation of GST exemptions for skill development schemes and reduce ambiguity for training bodies.
Impact on Businesses and Compliance
The changes brought about by these notifications will have a broad impact across multiple sectors:
- Manufacturing and Scrap Dealers: The inclusion of metal scrap under RCM means that businesses dealing with such goods must ensure compliance when dealing with unregistered suppliers.
- Real Estate and Property Rentals: Businesses renting commercial properties from unregistered persons must account for the GST liability and update their tax reporting accordingly.
- Educational Institutions and Skill Development: Institutions involved in vocational training or affiliated with government boards need to verify their compliance with the updated provisions under NCVET to continue availing exemptions.
Conclusion
These GST amendments reflect the government’s ongoing efforts to plug revenue leakages, simplify compliance, and promote specific sectors like education and skill development. New GST Updates Effective from October 10 2024 Businesses must adapt to these changes by updating their GST processes and ensuring proper documentation to avoid penalties.
For detailed information, refer to the original notifications and keep track of updates on the GST portal.
If you have any questions or need further guidance on implementing these changes, feel free to comment below or reach out to a GST professional.
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