Government notifies effective date for amendments made in GST law vide Finance Act 2024

This Tax Alert summarizes recent Notification[1] issued by Central Board of Indirect Taxes and Customs (CBIC) notifying effective date for the amendments made in Central Goods and Services Tax Act, 2017 (CGST Act) vide Finance Act, 2024 in the interim budget.

As per the notification:

• Amendments relating to the definition of Input Service Distributor (ISD) in Section 2(61) and manner of distribution of credit by ISD in Section 20 of CGST Act will come into effect from 1 April 2025.
  
• Penalty provision introduced for non-registration of packing machines by manufacturers of pan masala, chewing tobacco and other tobacco-related products will be effective from 1 October 2024.
  

Comments

• With ISD becoming mandatory effective 1 April 2025 for all common input services (domestic and imports) businesses may need to determine services that will need to be routed through ISD.
  
• The taxpayers may also need to identify the state(s) where ISD registration would be required basis their procurement pattern.
  
• Timely intimation to vendors would be imperative so that invoices for common services are raised on the ISD registration effective 1 April 2025.
  
• The Government has amended the rules pertaining to ISD vide Notification No. 12/2024-CT dated 10 July 2024, however, the same will come into force from the date to be notified. The same will likely to be notified with effect from 1 April 2025 i.e., along with proposed ISD provisions.

[1] Notification No. 16/2024-Central Tax dated 6 August 2024