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Key Amendments to Central Goods and Services Tax Rates – Notification No. 12/2023

The Indian Ministry of Finance has recently issued Notification No. 12/2023-Central Tax (Rate) on the 19th of October, 2023. This notification introduces significant amendments to a previous tax rate notification (No. 11/2017-Central Tax (Rate)) that was issued back in 2017. These amendments have been put in place to address specific tax rate and input credit issues.

Summary:

1. Introduction of New Conditions: The notification introduces new conditions related to the Central Goods and Services Tax (CGST) rates for specific services. Under serial numbers 8 and 10 in the notification, additional conditions have been added to clarify that if a supplier charges CGST at a rate higher than 2.5%, the recipient cannot claim input tax credit above 2.5%. Detailed examples are provided for clarity.

2. Alterations to Serial Number 34: Serial number 34 sees significant changes, including rephrasing “totalisator or a license to” to “licensing a.” Additionally, item (v) and its entries are omitted from the notification.

3. Changes in the Annexure: The notification also revises the Scheme of Classification of Services by omitting serial numbers 696 and 698, along with their associated entries.

4. Effective Date: The amendments outlined in this notification will be in effect from the 20th of October, 2023.

Businesses and individuals should closely review these changes and seek professional guidance to understand how these amendments might affect their operations and tax liabilities. These amendments can have far-reaching implications, and it’s crucial to ensure compliance with the updated regulations to avoid any potential issues with tax authorities.

For the complete and detailed information, individuals and businesses should refer to the official notification and consult with tax professionals to ensure they are in compliance with the new regulations.

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This Article is only a knowledge-sharing initiative and is based on the Relevant Provisions as applicable and as per the information existing at the time of the preparation. In no event RMPS & Co. or the Author or any other persons be liable for any direct and indirect result from this Article or any inadvertent omission of the provisions, update etc. if any

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