The Union Budget 2025 has introduced some important changes to the Customs and GST laws, designed to make processes smoother, quicker, and more efficient for businesses. Here's a breakdown of the updates in an easy-to-understand way:
Key Changes in Customs Law:
Faster Provisional Assessments:
- Now, provisional assessments (temporary assessments on goods) must be finalized within 2 years. If needed, the time can be extended by one more year. This will help avoid delays and reduce long-term waiting for decisions.
Easy Corrections (Voluntary Revision):
- Importers/exporters can now correct their customs declarations (like bills of entry) after the goods have been cleared, within a set period. These corrections can be done without going through a complicated legal process unless there is fraud or misdeclaration.
Refunds Made Easier (Section 27):
- If a mistake is made in a previous declaration, refund claims must be submitted within 1 year of the duty or interest payment, ensuring that businesses don’t lose out due to lengthy procedures.
Faster Dispute Resolution:
- The Settlement Commission will be replaced by an Interim Board starting April 1, 2025. This will help in clearing up pending disputes faster, offering more certainty to businesses.
Simplified Tariff System:
- The Customs Tariff Act is getting simplified. Only eight tariff rates remain, making it easier to understand and apply. New classifications are introduced for special products like GI rice (e.g., basmati) and Makhana.
Key Changes in GST Law:
Easier Compliance for ISDs:
- The rule for Input Service Distributors (ISD) now includes inter-state supplies taxed under the reverse charge method (RCM). This change will make it easier for businesses to distribute input tax credits.
New Tracking System:
- A Track-and-Trace system will be introduced, where unique identifiers (like QR codes) will be placed on certain goods. This will help in better monitoring and control, ensuring products are tracked from start to finish.
No Time of Supply for Vouchers:
- The time of supply rule for vouchers (which could be used for goods or services) is being removed, simplifying the tax treatment of vouchers.
ITC on Machinery:
- Businesses can now claim Input Tax Credit (ITC) for plant and machinery purchases backdated to July 1, 2017. This is great news for businesses investing in machinery and equipment.
Supplies in Special Economic Zones (SEZs):
- Supplies made in SEZs (Special Economic Zones) before export clearance are now not considered as a supply of goods or services, reducing tax complications for businesses operating in these zones.
Appeals and Penalties:
- If a business wants to appeal a penalty decision, they now have to pay 10% of the penalty amount upfront. This will help resolve disputes more quickly.
