Amendment to Section 15 – Post-Supply Discounts
Substitution of Section 15(3)(b) of the CGST Act, 2017, to provide that a discount granted after the supply has been effected may be excluded from the value of supply where the supplier issues a credit note for such discount and the recipient reverses the input tax credit attributable to that discount in accordance with Section 34 of the CGST Act, 2017.

Amendment to Section 34 – Section 34 Expanded to Cover Credit Notes for Post-Supply Discounts

The amendment to Section 34(1) of the CGST Act, 2017 expands the circumstances in which a supplier may issue a credit note by expressly including cases where a discount covered under Section 15(3)(b) is granted after the supply has been effected.

Amendment made to expand the scope of 90% provisional refunds to include cases of inverted duty structure, in addition to zero-rated supplies. This means that taxpayers facing accumulation of input tax credit due to higher input tax rates can now avail provisional refunds, similar to exporters. The amendment aligns IDS refund treatment with that of zero-rated supplies, subject to prescribed safeguards and procedural compliance. This amendment will extend the similar fast-track provisional refund (on a risk-based basis) to unutilised ITC arising from inverted duty structure cases under Section 54(3)(ii).

Earlier under Section 54 of the CGST Act, provisional refund was primarily restricted to cases involving zero-rated supplies, i.e., exports of goods or services and supplies made to Special Economic Zones (SEZ). In such cases, eligible taxpayers could claim up to 90% of the refund amount on a provisional basis. 

Amendment to Section 54(14) – Removal of Minimum Refund Threshold for Refund Claims on Exports (with Payment of Tax)

To insert an exception to Section 54(14) which provides that no refund under sub-section (5) or sub-section (6) shall be granted where the refund amount is less than ₹1,000. In other words, the ₹1,000 threshold shall not apply in cases where refund of tax is claimed on account of export of goods with payment of tax (IGST). Refund of IGST paid on export of goods will now be granted irrespective of the amount involved, even if less than ₹1,000. This would remove procedural hardship for exporters, particularly in cases involving low-value consignments.

Under the earlier provisions of Section 54(14), refund claims were subject to a minimum threshold limit of ₹1,000. Any refund amount falling below this limit was not processed or granted by the tax authorities. This often resulted in small amounts remaining unclaimed, particularly affecting taxpayers with frequent low-value transactions or minor excess tax payments.