Every year the Finance Act carries a set of amendments to the GST Acts. These are reported when the Act is passed, and are frequently acted upon at that point. That is usually premature.
The sequence
From proposal to operation
Stage one
Finance Bill
The proposed amendments are introduced. At this stage they are proposals and may change before enactment.
Stage two
Enactment
The Finance Act receives assent. The amendments are now part of the statute book but ordinarily do not yet operate.
Stage three
Notification of the date
The Government notifies the date from which each amendment comes into force. Different amendments in the same Act often have different dates.
Stage four
State legislation
Corresponding amendments to the State GST Acts are made by the States, and the dates may not align exactly with the central notification.
Categories of amendment
Category | What to check |
|---|---|
Clarificatory amendment | Whether it is expressed to be retrospective, and from which date, since this affects concluded periods |
Substantive change to a charging or credit provision | The notified date, and the treatment of transactions straddling it |
Procedural change | Whether the corresponding rule and form have been amended, since the provision cannot operate without them |
Change to penalty or prosecution provisions | The date of the offence rather than the date of proceedings, as a rule |
Retrospective amendments
Some amendments are given retrospective effect, usually where the intention is stated to have always been that which the amendment now expresses. Where an amendment is retrospective, positions taken for earlier periods need to be reviewed, and any pending proceedings on the same question need a fresh submission.
A practical checklist
Maintain a table of the amendments in the current Finance Act with three columns: the provision, the effect, and the notified date.
Leave the notified date blank until the notification is issued, and review the table each month.
For each amendment with a notified date, identify affected transactions and the systems to be updated.
For retrospective amendments, list the earlier periods affected and any proceedings pending for those periods.
Confirm that the corresponding State amendment has been made where a state levy is involved.