India: Tax measures in budget 2023-2024, including GST-related measures

Union Budget 2023-2024 presented 2 February 2023

Union Budget 2023-2024 presented 2 February 2023

The Union Budget 2023-2024 was presented 2 February 2023.

Regarding direct tax:

  • There are no proposals to change individual (personal) income tax brackets (“slabs”) or tax rates, but the basic exemption would be increased to INR 300,000 (from INR 250,00).
  • The period of incorporation of eligible start-ups for certain tax incentives is being extended by an additional year.
  • Newly incorporated manufacturing entities would also be allowed an additional year’s extension with regard to the time for the start of manufacturing to qualify under the concessional tax regime.

There was an expectation that the government would provide guidance on India’s adoption of the global minimum tax rules, but there was no announcement in this regard.

Regarding goods and services tax (GST):

  • Restrictions are placed on input tax credit on activities pertaining to corporate social responsibility obligations as per Companies Act, 2013.
  • Penal provisions are introduced on electronic commerce operators for contravening provisions relating to supply of goods made through them by unregistered persons or composition taxpayers making interstate supplies.
  • The monetary threshold for launching prosecution for offences under the GST law is also increased to INR2 crore (from INR1 crore), except for issuance of fake invoices.
  • Certain offenses in the GST law are decriminalized, such as obstructing an officer from discharge of duties, possession of illegally supplied goods, and destruction of evidence/documents.
  • The online information and database access or retrieval services (OIDAR) of IGST Act are also proposed to be amended to remove the condition of rendering of the said supply being essentially automated and involving minimal human intervention.

Read a January 2023 report [PDF 913 KB] prepared by the KPMG member firm in India that provides more details about the tax measures in the budget 2023-2024

Read additional insights on the budget 2023-2024, including sector-based analysis of the budget.


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