CBIC notifies provisions of Section 123 of the Finance Act, 2021 as recommended in 50th council meeting
In 50th GST council meeting held on 11th July 2023, the council recommended to bring in force provision of section 123 of finance act 2021 which is for Amendment of section 16.
Accordingly CBIC vide notification No. 27/2023–Central Tax Dated 31st July, 2023 notified the said provision to come into force w.e.f 1st day of October, 2023.
In exercise of the powers conferred by clause (b) of sub-section (2) of section 1 of the Finance Act, 2021 ( 13 of 2021), the Central Government hereby appoints the 1stday of October, 2023, as the date on which the provisions of section 123 of the said Act shall come into force.
Provision of section 123 of finance act 2021 can be read as under;
Amendment of section 16.
In the Integrated Goods and Services Tax Act, 2017, in section 16, ––
(a) in sub-section (1), in clause (b), after the words “supply of goods or services or both”, the words “for authorised operations” shall be inserted;
(b) for sub-section (3), the following sub-sections shall be substituted, namely:––
“(3) A registered person making zero rated supply shall be eligible to claim refund of unutilised input tax credit on supply of goods or services or both, without payment of integrated tax, under bond or Letter of Undertaking, in accordance with the provisions of section 54 of the Central Goods and Services Tax Act or the rules made thereunder, subject to such conditions, safeguards and procedure as may be prescribed:
Provided that the registered person making zero rated supply of goods shall, in case of non-realisation of sale proceeds, be liable to deposit the refund so received under this sub-section along with the applicable interest under section 50 of the Central Goods and Services Tax Act within thirty days after the expiry of the time limit prescribed under the Foreign Exchange Management Act, 1999 for receipt of foreign exchange remittances, in such manner as may be prescribed.
(4) The Government may, on the recommendation of the Council, and subject to such conditions, safeguards and procedures, by notification, specify––
(i) a class of persons who may make zero rated supply on payment of integrated tax and claim refund of the tax so paid;
(ii) a class of goods or services which may be exported on payment of integrated tax and the supplier of such goods or services may claim the refund of tax so paid.”.