Amendment status not verified — confirm the current text below against the official source.
The proposed Karnataka Goods and Services Tax (Amendment) Bill, 2023, inter alia, provides for the following, namely:- (1) Clause (d) of sub-section (2) and Clause (c) of sub-section (2A) in section 10 of the KGST Act is being amended so as to remove the restriction imposed on registered persons engaged in supplying goods through electronic commerce operators from opting to pay tax under the Composition Levy. (2) Second and third provisos to sub-section (2) of section 16 of the KGST Act are being amended to align the said sub-section with the return filing system provided in the said Act. (3) Explanation to sub-section (3) of section 17 of the KGST Act is being amended so as to restrict availment of input tax credit in respect of certain transactions specified in para 8(a) of Schedule III of the said Act, as may be prescribed, by including the value of such transactions in the value of exempt supply. Further, sub-section (5) of said section is also being amended so as to provide that input tax credit shall not be available in respect of goods or services or both received by a taxable person, which are used or intended to be used for activities relating to his obligations under corporate social responsibility referred to in section 135 of the Companies Act, 2013. (4) Sub-section (1) and sub-section (2) of section 23 of the KGST Act are being amended, with retrospective effect from 01st July, 2017, so as to provide that persons for compulsory registration in terms of subsection (1) of section 22 and section 24 of the Act need not register if exempt under sub section (1) of section 23. (5) A new sub-section (5) in section 37 of the KGST Act is being inserted so as to provide a time limit up to which the details of out ward supplies under sub- section (1) of the said section for a tax period can be furnished by a registered person. Further, it also seeks to provide an enabling provision for extension of the 18 said time limit, subject to certain conditions and restrictions, for a registered person or a class of registered persons. (6) A new sub-section (11) in section 39 of the KGST Act is being inserted so as to provide a time limit upto which the return for a tax period can be furnished by a registered person. Further, it also seeks to provide an enabling provision for extension of the said time limit, subject to certain conditions and restrictions, for a registered person or a class of registered persons. 7 (7) A new sub-section (2) in section 44 of the KGST Act is being inserted so as to provide a time limit upto which the annual return under subsection (1) of the said section for a financial year can be furnished by a registered person. Further, it also seeks to provide an enabling provision for extension of the said time limit, subject to certain conditions and restrictions, for a registered person or a class of registered persons. (8) A new sub-section (15) in section 52 of the KGST Act is being inserted so as to provide a time limit upto which the statement under subsection (4) of the said section for a month can be furnished by an electronic commerce operator. Further, it seeks to provide an enabling provision for extension of the said time limit, subject to certain conditions and restrictions, for an electronic commerce operator or a class of electronic commerce operators. (9) Sub-section (6) of section 54 of the KGST Act is being amended so as to remove the reference to the provisionally accepted input tax credit to align the same with the present scheme of availment of self-assessed input tax credit as per sub- section (1) of section 41 of the said Act. (10) Section 56 of the KGST Act is being amended so as to provide for an enabling provision to prescribe manner of computation of period of delay for calculation of interest on delayed refunds. (11) Section 109 of the KGST Act is being amended to designate the GST Appellate Tribunal constituted under the provisions of the Central Goods and Services Tax Act to be the Appellate Tribunal for the purposes of KGST Act also and to re-designate area benches as State benches under section 117 of the KGST Act. (12) A new sub-section (1B) in section 122 of the KGST Act is being inserted so as to provide for penal provisions applicable to Electronic Commerce Operators in case of contravention of provisions relating to supplies of goods made through them by unregistered persons or composition taxpayers. 19 (13) Sub-section (1) of section 132 of the KGST Act is being amended so as to decriminalize offences specified in clause (g) and (j) of the said subsection and to increase the monetary threshold for launching prosecution for the offences under the said Act from one hundred lakh rupees to two hundred lakh rupees, except for the offences related to issuance of invoices without supply of goods or services or both. (14) First proviso to sub-section (1) of section 138 of the KGST Act is being amended so as to simplify the language of clause (a), to omit clause (b) and to substitute the clause (c) of said proviso so as to exclude the persons involved in offences relating to issuance of invoices without supply of goods or services or both from the option of compounding of the offences under the said Act. It further seeks to amend sub-section (2) so as to rationalize the amount for compounding of various offences by reducing the minimum as well as maximum amount for compounding. (15) Schedule III of the KGST Act is being amended to give retrospective applicability to Para 7, 8 (a) and 8 (b) of the said Schedule, with effect from 1st July, 2017, so as to treat the activities/ transactions mentioned in the said paragraphs as neither supply of goods nor supply of services. It is also being clarified that where the tax has already been paid in respect of such transactions/ activities during the period from 01st July, 2017 to 31st January, 2019, no refund of such tax paid shall be available. Hence, the Bill [L.A. Bill No. 06 of 2023, File No. SAMVYASHAE 16 SHASANA 2023] [Article 246 A and Entry 60 of List II of the Seventh Schedule to the Constitution of India.] [Published in Karnataka Gazette Extra-ordinary No.366 in part-IVA dated:01.08.2023] VIII Amendment Act 02 of 2024:- With the recommendations of GST Council, in its 51st meeting held on 02-08-2023, sections 2, 24 and Schedule III of the Central Goods and Services Tax Act, 2017 (Central Act No. 12 of 2017) was amended relating to the online gaming, online money gaming, specified actionable claims and virtual digital asset have been incorporated by the Central Goods and Services (Amendment) Act, 2023 (Central Act No. 30 of 2023). Whereas, the GST Council Secretariat has communicated on 11- 08-2023 to incorporate the corresponding amendments in respective state Goods and Services Tax Act with effect from 01-10-2023. Therefore It is considered necessary further to amend the Karnataka Goods and Services 20 Tax Act, 2017 (Karnataka Act 27 of 2017). As the matter was urgent and both Houses of the State Legislature were not in a session, The Karnataka Goods and Services Tax (Amendment) Ordinance, 2023 (Karnataka Ordinance 04 of 2023) was promulgated to achieve the above object. The amendments made under the Karnataka Goods and Services Tax (Amendment) Ordinance, 2023 (Karnataka Ordinance 04 of 2023), shall be without prejudice to the provisions of any other law for the time being in force, providing for prohibiting, restricting or regulating betting, casino, gambling, horse racing, lottery or online gaming. However,- (a) imposition of tax on Casinos, Horse racing and Online Gaming does not regularise the said trade; and (b) any crime committed in the course of the same is not immune from criminal action. This Bill seeks to replace the said Ordinance. Hence, the Bill. [L.A. Bill No.19 of 2023, File No. SAMVYASHAE 27 SHASANA 2023] [Article 246A and entry 60 of List II of the Seventh Schedule to the Constitution of India.] [Published in Karnataka Gazette Extra-ordinary No.44 in part-IVA dated:30.01.2024] IX Amendment Act 36 of 2024.- The Karnataka Goods and Services Tax Act,2017 (Karnataka Act 27 of 2017) was enacted to make a provision for levy and collection of tax on intra-State supply of goods or services or both by the Government of Karnataka. The new tax regime had faced certain difficulties. In order to overcome the difficulties, it is proposed to amend the Karnataka Goods and Services Tax Act, 2017 Karnataka Act No. 27 of (2017). The proposed Karnataka Goods and Services Tax (Amendment) Bill, 2024, inter alia, provides for the following, namely:- (1) Clause (61) of section 20 of the Karnataka Goods and Services Tax Act, 2017 is being amended so as to create a clear distinction between the input service distribution transactions requiring the transfer of input tax credit related to the invoices for receipt of services received on behalf of distinct persons and actual supply of services from one distinct person to another and make it compulsory to distribute the credit. (2) Section 122A is being inserted to enable the levy of penalty for non- registration of machines used in the manufacture of tobacco products and pan masala. Hence, the Bill. [L.A. Bill No.29 of 2024, File No. SAMVYASHAE 40 SHASANA 2024] [Article 246 A and entry 60 of List II of the Seventh Schedule to the Constitution of India.] [Published in Karnataka Gazette Extra-ordinary No. 388 in part-IVA dated:12.08.2024] 21 X Amendment Act 02 of 2025:- The Karnataka Goods and Services Tax Act, 2017 was enacted to make a provision for levy and collection of tax on intra-State supply of goods or services or both by the Government of Karnataka. As per the recommendation of the GST Council, the Central Government has already amended the Central Goods and Services Tax Act, 2017 (Central Act 12 of 2017) by Finance Act (No.2) 2024 (Central Act 15 of 2024) and the same has been published in the Gazette of India dated: 16th August, 2024, after the assent of the Hon‟ble President of India. The Government of India vide Notification No.17/2024- Central Tax Dated: 27.09.2024 has given the commencement date for the different provisions of the said Act. Whereas, parallelly there is a requirement to bring similar amendments to Karnataka Goods and Services Tax Act, 2017 to being a uniform taxation system. Whereas, new tax regime had faced certain difficulties. In order to overcome the difficulties, it is proposed to amend the Karnataka Goods and Services Tax Act, 2017 (Karnataka Act No. 27 of 2017). As the matter was urgent and both Houses of the State Legislature were not in session, The Karnataka Goods and Services Tax (Amendment) Ordinance, 2024 (Karnataka Ordinance No. 02 of 2024) was promulgated to achieve the above object. This Bill seeks to replace the said Ordinance. Hence, the Bill. [L.A. Bill No.49 of 2024, File No. SAMVYASHAE 54 SHASANA 2024] [Article 246A and entry 60 of List II of the Seventh Schedule to the Constitution of India.] [Published in Karnataka Gazette Extra-ordinary No.14 in part-IVA dated:09.01.2025] 22 XI Amendment Act 43 of 2025:- The Karnataka Goods and Services Tax Act, 2017 was enacted to make a provision for levy and collection of tax on intra-State supply of goods or services or both by the Government of Karnataka. However, the new tax regime had faced certain difficulties. In order to overcome the difficulties, it is proposed to amend the Karnataka Goods and Services Tax Act, 2017 (Karnataka Act No. 27 of 2017). The proposed Karnataka Goods and Services Tax (Amendment) Bill, 2025, inter alia, provides for the following, namely:- (1) (a) Clause 2 of the Bill seeks to amend section 2 of the Karnataka Goods and Services Tax Act, 2017 relating to definitions. It is proposed to amend the definition of “Input Service Distributor” in clause (61) of section 2 so as to explicitly provide for distribution of input tax credit by the Input Service Distributor in respect of inter-state supplies on which tax has to be paid on reverse charge basis, by inserting reference to sub- section (3) and sub-section (4) of section 5 of the Integrated Goods and Services Tax Act in the definition of Input Service Distributor; (b) This amendment shall take effect from 1st day of April, 2025; (c) It is further proposed to amend sub-clause (c) of clause (69) of section 2 so as to substitute the term “municipal or local fund” with the terms “municipal fund or local fund” and to insert an Explanation after the said sub-clause, to provide for definitions of the terms“ Local fund” and “Municipal fund” used in the definition of “local authority” under the said clause so as to clarify the scope of the said terms; (d) It is also proposed to insert a new clause (116A) in section 2 so as to define the expression “Unique Identification Marking” to mean a mark that is unique, secure and non-removable, for implementation of track and trace mechanism; (2) Clause 3 of the Bill seeks to omit sub-section (4) of section 12 of the Karnataka Goods and Services Tax Act, 2017 so as to remove the provision for time of supply in respect of transaction in vouchers, the same being neither supply of goods nor supply of services; (3) Clause 4 of the Bill seeks to omit sub-section (4) of section 13 of the Karnataka Goods and Services Tax Act, 2017 so as to remove the provision for time of supply in respect of transaction in vouchers, the same being neither supply of goods nor supply of services; (4) (a) Clause 5 of the Bill seeks to amend clause (d) of sub-section (5) of section 17 of the Karnataka Goods and Services Tax Act, 2017 so as to substitute the expression “plant or machinery” with the expression “plant and machinery” to remove any ambiguity in interpretation for the purpose of availment of input tax credit in such cases; (b) It further seeks to insert an Explanation to clarify that the said amendment is made notwithstanding anything to the contrary contained in any judgment, decree or order of any court or any other 23 authority; (c) This amendment shall take effect retrospectively from 1st day of July, 2017; (5) (a) Clause 6 of the Bill seeks to amend sub-section (1) of section 20 of the Karnataka Goods and Services Tax Act, 2017 so as to explicitly provide for distribution of input tax credit by the Input Service Distributor in respect of inter-State supplies, on which tax has to be paid on reverse charge basis, by inserting a reference to sub-section (3) and sub-section (4) of section 5 of the Integrated Goods and Services Tax Act (Central Act 13 of 2017) in the said sub-section; (b) It further seeks to amend sub-section (2) of the said section so as to explicitly provide for distribution of input tax credit by the Input Service Distributor in respect of inter-State supplies, on which tax has to be paid on reverse charge basis, by inserting reference to sub- section (3) and sub-section (4) of section 5 of the Integrated Goods and Services Tax Act in the said sub-section; (c) This amendment shall take effect from 1st day of April, 2025; (6) (a) Clause 7 of the Bill seeks to amend the proviso to sub-section (2) of section 34 of the Karnataka Goods and Services Tax Act, 2017 so as to explicitly provide for the requirement of reversal of corresponding input tax credit in respect of a credit-note, if availed, by the registered recipient, for the purpose of reduction of tax liability of the supplier in respect of the said credit note; (b) It further seeks to remove the condition in the said proviso of not having passed the incidence of tax on supply for the purpose of reduction of tax liability of the supplier in respect of the said credit note; (7) (a) Clause 8 of the Bill seeks to amend sub-section (1) of section 38 of the Karnataka Goods and Services Tax Act, 2017 to omit the expression “auto- generated” with respect to statement of input tax credit in the said sub- section; (b) It further seeks to amend sub-section (2) of the said section by omitting the expression “auto-generated” with respect to statement of input tax credit in the said subsection and inserting the expression “including” after the words “by the recipient” in clause (b) of said sub-section so as to make the said sub-section inclusive to cover other cases where input tax credit is not available to taxpayer under any other provisions of the Act; (c) It further inserts a new clause (c) in the said sub-section to provide for an enabling clause to prescribe other details to be made available in statement of input tax credit; (8) Clause 9 of the Bill seeks to amend sub-section (1) of section 39 of the Karnataka Goods and Services Tax Act, 2017 so as to provide for an enabling clause to prescribe conditions and restriction for filing of return under the said sub-section; (9) Clause 10 of the Bill seeks to substitute the proviso to sub-section (6) of 24 section107 of the Karnataka Goods and Services Tax Act, 2017 to provide for the requirement of pre-deposit of ten percent of the penalty amount for filing an appeal before the Appellate Authority against an order which involves demand of penalty without involving any demand of tax; (10) Clause 11 of the Bill seeks to insert a proviso to sub-section (8) of section 112 of the Karnataka Goods and Services Tax Act, 2017 to provide for the requirement of pre-deposit of ten percent. of the penalty amount for filing an appeal before the Appellate Tribunal against an order which involves demand of penalty without involving any demand of tax. (11) Clause 12 of the Bill seeks to insert a new section 122B in the Karnataka Goods and Services Tax Act, 2017 to provide for penal provisions for contraventions of the provision relating to track and trace mechanism; (12) Clause 13 of the Bill seeks to insert a new section 148A in the Karnataka Goods and Services Tax Act, 2017 so as to provide for an enabling provision for implementation of track and trace mechanism for ensuring effective monitoring and control of supply of specified commodities; (13) (a) Clause 14 of the Bill seeks to insert a new clause (aa) in paragraph 8 of Schedule III of the Karnataka Goods and Services Tax Act, 2017 to specify that the supply of goods warehoused in a Special Economic Zone or in a Free Trade Warehousing Zone to any person before clearance for exports or to the Domestic Tariff Area shall be treated neither as supply of goods nor as supply of services; (b) It further seeks to amend the Explanation 2 of the said Schedule to clarify that the said Explanation shall be applicable in respect of clause (a) of paragraph 8 of the said Schedule; (c) It also seeks to insert an Explanation 3 in the said Schedule to define the expressions “Special Economic Zone”, “Free Trade Warehousing Zone” and “Domestic Tariff Area”, for the purpose of the proposed clause (aa) in paragraph 8 of said Schedule; (d) These amendments shall take effect retrospectively with effect from the 1st day of July, 2017; and (14) Clause 15 of the Bill seeks to clarify that no refund of the tax, already paid in respect of the aforesaid activities or transactions, shall be available. Hence, the Bill. [L.A. Bill No. 57 of 2025, File No. SAMVYASHAE 50 SHASANA 2025] [Article 246A and entry 60 of List II of the Seventh Schedule to the Constitution of India.] [Published in Karnataka Gazette Extra-ordinary No.527 in part-IVA dated:02.09.2025] 25 KARNATAKA ACT NO.27 OF 2017 (First Published in the Karnataka Gazette Extra-ordinary on the twenty seventy day of June, 2017) THE KARNATAKA GOODS AND SERVICES TAX ACT, 2017 (Received the assent of the Governor on the 27th day of June, 2017) (As amended by 03 of 2019,23 of 2019, 20 of 2020, 39 of 2021 36 of 2022, 32 of 2023, 02 of 2024, 36 of 2024, 02 of 2025 and 43 of 2025) An Act to make a provision for levy and collection of tax on intra-State supply of goods or services or both by the State of Karnataka and the matters connected therewith or incidental thereto. Be it enacted by Legislature of Karnataka in the Sixty-eighth Year of the Republic of India as follows:- CHAPTER I PRELIMINARY