Manthan Ruparelia & Associates

Reversals required under Rule 37A are now availalbe in September's GSTR-2B

🟡 The table shows the amount of ITC to be reversed on account of non-filing of GSTR-3B by vendors for FY 2023-24.

↳ Next steps

→ Followup with vendors for filing pending GSTR-3B

→ In case GSTR-3B(s) of FY 2023-24 are not filed by vendors till you file GSTR-3B for the month of October, ITC shown in GSTR-2B (if availed) needs to be (temporarily) reversed through disclosure in 4B(2).

→ Such ITC can be reclaimed once the suppliers files their GSTR-3B for the relevant period.

🟡 ITC reversal amount under Rule 37A is calculated while considering all invoices (excluding RCM invoices), debit notes and their corresponding amendments (i.e. excluding credit notes and amendments to credit notes) pertaining to the tax period for which supplier has not filed GSTR-3B.

Some key amendments from the Union Budget 2024 that will take effect from October 1, 2024:

1. Direct Tax Vivad Se Vishwas Scheme (VSV) 2.0 :
This scheme helps settle tax disputes related to tax, interest, penalties, or fees pending as of July 22, 2024. If the tax department has filed an appeal, the taxpayer benefits from a reduced settlement amount of 50% of tax liability.

2. Share Buyback Taxation :
The government has modified taxation on share buybacks to be in line with dividends. Now, shareholders will be taxed according to their income tax slabs on buyback proceeds.
Companies must also withhold TDS at 10% for resident shareholders and 20% for non-residents.
The cost of the shares cannot be set off against the buyback proceeds but may be considered a capital loss.

3. TDS Rate Changes :
Multiple changes in TDS rates are to take effect:
Life Insurance Policy Payments (Section 194DA) : Reduced from 5% to 2%.
Commission on Lottery Tickets (Section 194G) : Reduced from 5% to 2%.
Payment of Commission/Brokerage (Section 194H) : Reduced from 5% to 2%.
Payment of Rent (Section 194-IB) : Reduced from 5% to 2%.
Payment by E-commerce Operators (Section 194-O) : Reduced from 1% to 0.1%.
Payments on Repurchase of Mutual Fund/UTI Units (Section 194F) : Omitted.

4. Black Money Act (BMA) Amendment :
Penalties under Sections 42 and 43 of the Black Money Act will no longer apply if the undisclosed foreign asset does not exceed Rs. 20 lakh, offering some relief for smaller undisclosed amounts.

5. Securities Transaction Tax (STT) :
For futures transactions, STT will increase from 0.0125% to 0.02% .
For options transactions, STT will rise from 0.0625% to 0.1%, applied to the premium amount.

6. Floating TDS Rate:
Effective October 1, 2024, TDS at 10% will apply to interest on central and state government bonds, including Floating Rate Savings Bonds.
No TDS will be deducted if the total interest income is less than Rs. 10,000 in a financial year.

7. Aadhar Card:
The provision allowing individuals to quote the Aadhaar Enrolment ID instead of the Aadhaar number in PAN applications and income tax returns will be discontinued from October 1, 2024.