India’s Economic Growth & GST Updates. As India approaches FY 2024-25, the economy is undergoing significant changes, particularly in taxation policies and Goods and Services Tax (GST) regulations. Forecasts from major institutions reflect optimism:
- ADB projects a 7% GDP growth.
- RBI estimates 7.2% growth, demonstrating optimism.
- OECD expects more modest growth at 6.7%.
Despite some concerns about agricultural performance due to weather fluctuations, the overall economic outlook remains promising. Let’s explore the major developments and updates shaping India’s economic and taxation framework in 2024-25. GST Registration.
1. Major GST Amendments Effective in 2024
The Central Board of Indirect Taxes and Customs (CBIC) has implemented several key GST amendments with two important effective dates:
- 27th September 2024
- 1st November 2024
Key Changes:
- Input Tax Credit (ITC) Benefits for Past Years
Amendments to Section 16 of the CGST Act now allow businesses to claim ITC retrospectively for previous financial years, ensuring fair reconciliation. - GST Appellate Tribunal (GSTAT) Empowered
From 1st October 2024, the GSTAT will adjudicate anti-profiteering cases under Section 171, ensuring compliance with tax reductions. - Extra Neutral Alcohol (ENA) Taxation Change
Starting 1st November 2024, ENA used in alcoholic beverage production will no longer fall under GST, reducing tax complexities for manufacturers.
2. Transition of Anti-Profiteering Cases to GSTAT
Currently, the Competition Commission of India (CCI) handles anti-profiteering cases under Section 171. However, from 1st April 2025, new cases will be shifted to the GSTAT. This transition will centralize the resolution of disputes related to passing on tax benefits and ITC reductions to consumers. GST Filing.
3. GST Compensation Cess Under Review
The GST Compensation Cess, initially set to expire in March 2026, is now under reconsideration. A Group of Ministers (GoM), led by Pankaj Choudhary, is evaluating whether to extend the cess or replace it with an alternative mechanism. States that have benefited from the compensation are advocating for an extension to sustain their revenue streams.
4. Progress on GST Rate Rationalization & Real Estate Taxation
The GoM on GST Rate Rationalization has reviewed the tax rates for over 100 items, but a final consensus is yet to be reached. Similarly, discussions on real estate taxation reforms remain ongoing, with further deliberations expected in the next GST Council meeting.
5. September 2024 GST Collections: Slower But Steady Growth
India’s gross GST collections in September 2024 amounted to ₹1.73 trillion, reflecting a 6.5% year-on-year increase from ₹1.62 trillion in September 2023. However, this growth is the slowest so far in the fiscal year.
- Net GST collections grew by 3.9% to ₹1.52 trillion YoY.
- Experts anticipate a rise in collections during the festive season, which could offset the recent slowdown.
6. GSTN Updates: Invoice Management & Data Archival
The Goods and Services Tax Network (GSTN) has rolled out several new measures for better compliance and smoother operations:
- Invoice Management System (IMS)
Launched on 1st October 2024, IMS allows businesses to efficiently manage invoice corrections via the GST portal, helping ensure accurate input tax credit matching. - Archival of GST Return Data
From 1st August 2024, the GSTN will archive returns older than seven years. Taxpayers must download and retain necessary data to avoid loss of records.
7. Clarification on Notices Without Digital Signatures
A crucial clarification has been issued regarding notices and orders generated through the GST portal without digital signatures. These are now deemed valid, as they are electronically linked to the issuing officer’s digital signature within the system.
Conclusion: Preparing for Compliance & Growth in FY 2024-25
As India’s taxation landscape evolves, businesses must stay updated with new GST amendments and leverage the latest tools such as the Invoice Management System to ensure compliance. The ongoing discussions on GST rate rationalization and the future of the Compensation Cess highlight the dynamic nature of India’s tax regime.
With steady economic growth projections and proactive policy changes, the GST system is becoming more streamlined and digitized. Businesses should monitor these developments closely to optimize tax benefits and avoid penalties.
FAQs on GST Updates 2024-25
- What are the key GST changes effective from November 2024?
- ENA used in alcohol production will no longer attract GST from 1st November 2024.
- What will happen to anti-profiteering cases from 2025?
- From 1st April 2025, new anti-profiteering cases will be handled by the GSTAT instead of the CCI.
- How can businesses manage archived GST return data?
- Taxpayers should download returns older than seven years from the GST portal before the data is archived.
India’s GST reforms and economic growth outlook signal both opportunities and challenges for businesses in 2024-25. Staying compliant with the latest amendments will be crucial for navigating this evolving landscape successfully.
