Ministry of Finance Year-Ender 2024: Key CBIC Reforms to Enhance GST Efficiency Published on: December 25, 2024
The Central Board of Indirect Taxes and Customs (CBIC) under the Ministry of Finance marked 2024 with impactful reforms, enhancing the Goods and Services Tax (GST) system in its seventh year. Therefore, here’s a comprehensive look at the major initiatives that prioritized efficiency, compliance, and taxpayer facilitation.
Top CBIC Reforms in GST for 2024
Strengthened Registration and Fraud Prevention
Firstly, CBIC leveraged AI and data analytics to improve risk-rating systems, thereby curbing fraud effectively. Additionally, geo-tagging was introduced for business location tracking to verify authenticity. Moreover, a system-based suspension was implemented to ensure compliance, targeting non-filers with automated action.
Simplified Compliance Measures
In order to simplify compliance, CBIC enforced sequential filing of GSTR-1 and GSTR-3B, ensuring smooth input tax credit processing. Furthermore, risk-based refunds were introduced for faster processing to benefit legitimate taxpayers. Notably, a temporary registration facility was made available, allowing unregistered individuals to apply for GST registration.
Small Business and E-Commerce Support
For the benefit of small businesses, the TCS rate for e-commerce was reduced from 1% to 0.5%, thus easing financial strain on small suppliers. In addition, the due dates for GSTR-4 filing for composition taxpayers were extended to June 30. Likewise, the aerospace sector received a boost with GST waivers on satellite launches.
Retrospective and Relaxed Tax Provisions
Significantly, Section 128A of the CGST Act offered interest and penalty waivers for FY 2017-18 to FY 2019-20, provided timely tax payments were made. Similarly, Section 16(4) was amended to extend input tax credit timelines for returns filed before November 30, 2021. Furthermore, Rule 88B amendments ensured no interest was charged for late returns if cash was available in the Electronic Cash Ledger.
New Facilities for Taxpayers
CBIC introduced FORM GSTR-1A, enabling taxpayers to amend or add missed details before filing GSTR-3B. Alongside this, consolidated Ease of Doing Business (EODB) guidelines were issued to minimize disputes during investigations.
Key GST Council Recommendations in 2024
Exemptions
Notably, GST exemptions were granted on gene therapy, third-party motor insurance contributions, and specific R&D services. These measures aim to provide significant relief to taxpayers.
Rate Reductions
In particular, GST rates were reduced on fortified rice, cancer drugs, and savory snacks. Such reductions align with CBIC’s goal to support public welfare and economic growth.
Uniform IGST Rates
To promote consistency, uniform IGST rates were harmonized for aircraft components and related tools.
Ease of Doing Business and Litigation Reduction
Appeal Filing
To improve cash flow, pre-deposit limits for appeals under GST were reduced. Specifically, appeal caps were lowered to ₹20 crores CGST/SGST for taxpayers, enhancing financial flexibility.
Government Litigation
Importantly, monetary limits were set for departmental appeals, significantly reducing unnecessary litigation.
