The Finance Minister Nirmala Sitharaman presented Union Budget 2020 in Parliament on Saturday, February 1st, 2020. She stated that the government shall work towards taking the country forward so that we can leapfrog to the next level of health, prosperity, and well-being.
The budget was presented in the backdrop of two cross-cutting developments:
- a) The proliferation of technologies, specially analytics, machine learning, robotics, bio-informatics and Artificial Intelligence; and
- b) The number of people in the productive age group i.e. 15-65 years in India, being at its highest.
This combination is special to contemporary India. The energy, enthusiasm and innovation of our youth are the ignition required to push forward. The Indian spirit of entrepreneurship which weathered several storms over the centuries inspires and motivates all of us alike and hence the government recognised the need to support and further energize this spirit.
This budget is woven around 3 prominent themes:
- Aspirational India in which all sections of the society seek better standards of living, with access to health, education and better jobs.
- Economic development for all, indicated in the Prime Minister’s exhortation of “SabkaSaath, SabkaVikas, SabkaVishwas”. This would entail reforms across swathes of the economy. Simultaneously, it would mean yielding more space for the private sector. Together, they would ensure higher productivity and greater efficiency.
- Ours shall be a Caring Society that is both humane and compassionate. Antyodaya is an article of faith.
The aim of this budget has been to lift up the dampened spirits of the Indian economy and to provide a stimulus towards growth whilst recovering from the current slowdown faced by businesses.
Amendments carried out through the Finance Bill, 2020 will come into effect on the date of its enactment (unless otherwise specified), concurrently with the corresponding amendments to the Acts passed by the States & Union Territories with the legislature.
Proposed Amendments in the CGST Act, 2017
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Current provisions |
Proposed provisions |
Effect |
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Section 2(114) – Definition of Union Territory |
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“Union territory” means the territory of- …….. (c) Dadra and Nagar Haveli and Daman and Diu; |
“Union territory” means the territory of- …….. (c) Dadra and Nagar Haveli and Daman and Diu; (d) Ladakh |
Seeks to align the definition of “Union territory” in line with the Jammu and Kashmir Reorganisation Act, 2019 and the Dadra and Nagar Haveli and Daman and Diu (Merger of Union Territories), Act, 2019 |
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Section 10(2) – Composition Scheme |
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Clause (b), (c) and (d): (2) The registered person shall be eligible to opt under sub-section (1), if–– …….. (b) he is not engaged in making any supply of goods which are not leviable to tax under this Act; (c) he is not engaged in making any inter-State outward supplies of goods; (d) he is not engaged in making any supply of goods through an electronic commerce operator who is required to collect tax at source under section 52……. |
Clause (b), (c) and (d): The registered person shall be eligible to opt under sub-section (1), if–– ……. (b) he is not engaged in making any supply of goods or services which are not leviable to tax under this Act; (c) he is not engaged in making any inter-State outward supplies of goods or services; (d) he is not engaged in making any supply of goods or services through an electronic commerce operator who is required to collect tax at source under section 52……. |
Seeks to harmonize the conditions for eligibility for opting to pay tax under the Composition Scheme as sub-section (1) and sub-section (2A) of Section 10 of the CGST Act. |
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Section 16(4) – the Time period for availing Input Tax Credit (ITC) |
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A registered person shall not be entitled to take input tax credit in respect of any invoice or debit note for supply of goods or services or both after the due date of furnishing of the return under section 39 for the month of September following the end of financial year to which such invoice or invoice relating to such debit note pertains or furnishing of the relevant annual return, whichever is earlier.
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A registered person shall not be entitled to take input tax credit in respect of any invoice or debit note for supply of goods or services or both after the due date of furnishing of the return under section 39 for the month of September following the end of financial year to which such invoice or invoice relating to such debit note pertains or furnishing of the relevant annual return, whichever is earlier. |
Seeks to delink the date of issuance of debit note from the date of issuance of the underlying invoice for purposes of availing ITC. |
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Section 29(1)(c) – Cancellation of registration by the proper officer |
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(1) The proper officer may, either on his own motion or on an application filed by the registered person or by his legal heirs, in case of death of such person, cancel the registration, in such manner and within such period as may be prescribed, having regard to the circumstances where,–– ……… (c) the taxable person, other than the person registered under sub-section (3) of section 25, is no longer liable to be registered under section 22 or section 24. |
(1) The proper officer may, either on his own motion or on an application filed by the registered person or by his legal heirs, in case of death of such person, cancel the registration, in such manner and within such period as may be prescribed, having regard to the circumstances where,–– ……… (c) the taxable person, other than the person registered under sub-section (3) of section 25, is no longer liable to be registered under section 22 or section 24 or intends to opt-out of the registration voluntarily made under sub-section (3) of section 25. |
Seeks to amend clause (c) so as to provide for cancellation of registration obtained voluntarily under sub-section (3) of Section 25. |
The Complete Newsletter can be accessed at: http://www.a2ztaxcorp.com/wp-content/uploads/2020/02/Section-wise-Analyses-of-Union-Budget-2020-containing-changes-under-GST-Customs-and-Central-Excise-Duty.pdf