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One lakh students to be trained in GST accountancy, govt to fund fees

One lakh students to be trained in GST accountancy, govt to fund fees

The Institute of Cost Accountants of India (ICAI) would provide training to about one lakh students on the soon-to-be-launched GST Accountants course, a senior official said Thursday.

The government is coming out with Goods and Services Tax (GST) Accountants course and plans to train about 1 lakh GST Accountants over the next one to one-and-half year.

The course fees would be fully funded by the Government of India, ICAI president Amit Anand Apte told reporters here.

The objective of the programme is to ensure that compliance as far GST is concerned increases especially in the SMEs sector, he said adding the intention was to serve the sector because there was a gap between availability of trained resources and requirements.

“GST Accountants programme will be launched very soon.. about 1 lakh accountants will be trained specifically on GST compliances.

We are working out the modalities with theMinistry of Corporate Affairs and the course would be tentatively launched by February end,” Apte said.

The biggest challenge before the government is that most of the SMEs are not able to comply with the provisions of the (GST) law because they are not equipped enough with right kind of trained accountants who can adhere to the various GST provisions, he said.

The concept is to train 1 lakh accountants across the country who will be able to serve the SMEs sector.

Once these accountants are trained they will be able to serve all the SMEs and the compliance from the field would also improve substantially, Apte said adding this proposal was discussed with the Ministry of Corporate Affairs and then taken up with NITI Aayog which has approved it.

The course content is almost ready and it would be a 50-hours classroom training.

Besides, there would be a 10-hour practical training wherein the government would impart live training in the form of computerized filing of the returns in various GST offices across the country, he said.

Those from commerce stream could undergo this course and an entrance exam would be conducted by ICAI shortly and those candidates who qualify the exams would be eligible to undertake this GST Accountants course, he said.

The course would be conducted through ICAI’s 98 chapters and about 300 extension centers across the country, he added.


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Source: Business standard.
Companies stare at cash flow problems on account of GST credits

Companies stare at cash flow problems on account of GST credits

A tweak in the rule on availing goods and services tax (GST) credits may create cash flow problems for some companies starting this month. The change is in the way companies can set off tax paid on raw material against those levied on the goods they sell, which is meant to avoid double counting of taxes.

According to the credit utilisation mechanism announced late last year, companies can set off their tax liabilities by first utilising their integrated GST (IGST) credits before availing of their central GST (CGST) and state GST (SGST) credits. Previously, companies could set off IGST credits against both CGST and SGST.

Tax experts said this has started to result in situations where companies end up paying GST in cash even though they have credits on their books. “This amendment has become a point of worry for most industry players as they may now have to pay SGST liability in cash even in scenarios where prior to this amendment, these could be paid by utilising credits. The reason being the introduction of this new rule of utilisation of IGST credit,” said Abhishek Jain, tax partner at EY India. IGST credits are accumulated by companies that import goods or source them from vendors in other states. Collections under IGST are shared between the central and the state governments. Tax experts said the regulation change could result in litigation.

“The main objective of GST is that there should be no tax cascading, but the underutilized or non-utilised credit would lead to exactly that. The constitutional validity of this tax cascading could be challenged in court,” said Abhishek A Rastogi, a partner at Khaitan & Co.

The only way companies can solve this problem is by altering their supply chain structures. However, this may not be possible for most companies because supply chains cannot be determined merely to save taxes, industry experts said.

With the new regulation requiring utilisation of IGST credits first, industry experts said that many companies with a national presence will have credits accumulated in one state and taxes pending in other states.


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Source: Economic Times
Jaitley likely to chair GST Council meet next week; lower levy for housing on the cards

Jaitley likely to chair GST Council meet next week; lower levy for housing on the cards

Union Minister Arun Jaitley is likely to chair the 33rd meeting of the GST (Goods and Services Tax) Council on February 20, which among other things will consider slashing tax on under-construction flats.

The meeting could be the last one before the code of conduct for the general elections comes into effect.

Jaitley, who has just returned from the US after treatment, is expected to resume work soon.

Meanwhile, officials in the Finance Ministry said the agenda for February 20 meeting will include a proposal to lower GST on under-construction flats and affordable housing. A Group of States’ Finance Ministers (GoFMs) has favored lowering GST rates on residential houses to 5 percent without input tax credit and to 3 percent for those under affordable housing. Both the rates will be without input tax credit and one condition for 5 percent is to source at least 80 percent of materials from a GST-registered supplier.

The proposal to lower the GST rate was discussed in the 32nd meeting of the GST council, held on January 10. As there was no consensus, the matter was referred to a GoFMs.

Three-tier structure

At present, there is a three-tier structure for housing projects — there is no GST on the sale of a complex/building and ready to move-in flats where a sale takes place after an issue of completion certificate by the competent authority. GST is applicable on sale of under-construction property or ready-to-move-in flats where completion certificate has not been issued at the time of sale. Card rate for such flats is 18 percent, but the effective rate is 12 percent after abatement of 33 percent (cost of land). And, in the affordable housing category, the effective rate is 8 percent. Both these rates are with a full input tax credit (ITC).

To boost sentiment

Experts feel that lower duty will boost the sentiment in the real estate market. Suresh Nandlal Rohira, Partner at Grant Thornton India LLP, said home buyers will get their due benefits under GST with the decision of GoFMs to recommend lower tax rate. “It is a welcome move as in most cases the buyers always felt that the builders were not passing on the ITC benefits to consumers under 12 percent levy and the ultimate burden was to be borne by the consumers. This will really change the sentiments and may bring some boost in the real estate sector,” he said.

Another issue likely to be taken up at the meeting is some relief for the exporters. As of now, exporters get a refund of basic Customs duty and no compensation for other levies which makes it difficult for them to be competitive. Now an effort is being made to provide duty-drawback kind of scheme where benefits will be provided through e-wallet. Such a mechanism will help exporters deal with the issue of working capital.

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Source: The Hindu Business line.
GST Council Likely To Meet Next Week To Discuss Cement Rate Cut

GST Council Likely To Meet Next Week To Discuss Cement Rate Cut

The GST Council is likely to meet on February 20 to discuss a proposal to slash tax on cement to 18 percent from 28 percent and also consider a recommendation of a Group of Ministers (GoM) on housing that advocates 5 percent GST in under-construction properties and 3 percent GST for affordable housing.
The GoM had earlier recommended 5 percent GST without input tax credit (ITC) on under-construction housing and 3 percent GST without ITC on affordable housing.

A rate cut in cement to 18 percent which is long pending will lead to a loss of Rs. 13,000 crore annually to the government but with election drawing closer, the government is keen to ensure the GST cut benefits the end users in terms of lower prices and low cement prices could lead to low housing costs for the middle class.

The proposed GST cut in cement and the GoM report are on the agenda of the GST Council meeting on February 20, sources said.

The GoM on housing which will also meet once before the GST Council meeting takes place on February 20 could also change the definition of affordable housing to accommodate more poor people under 3 percent tax rate. Currently, affordable houses are defined up to 50 square meters of carpet area which is likely to be increased to 80 square meters to include more people in the category.

Developers and prospective home buyers are expected to gain from this move.

The Cement Manufacturers Association had demanded a cut in GST to 18 percent as it would boost infrastructure spending and create jobs while reducing the costs of buying a house.

Union minister Arun Jaitley had earlier said lowering the tax rate on cement was a priority. Cement is the only commodity used by the common man that is taxed at the highest slab.


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Source: NDTV.com
Qatar seeks inclusion of natural gas in GST

Qatar seeks inclusion of natural gas in GST

India’s largest LNG supplier Qatar on February 10 urged the central government to include natural gas in GST to help create demand for the environment-friendly fuel and raise its share in the country’s energy basket. Speaking at Petrotech conference here, Qatar Gas CEO Khalid Bin Khalifa Al-Thani said India is a very important market for Qatar.

“If there is a change in demand worldwide we will see it in India especially in fossil fuel,” he said.

Qatar supplies 8.5 million tonnes a year of liquefied natural gas to India. It is the country’s single largest source of imported gas, supplying about 40 percent of all overseas shipments reaching India.

He said the country needs to build infrastructure so that clean fuel can reach all corners.

“LNG should be considered to get full benefits of GST,” he said. “We would be working closely with the government”.

Qatar is the second big foreign investor to seek GST on petroleum products. In October last year, Russian oil firm Rosneft, the biggest foreign investor in India’s energy sector, had criticized the country’s taxation policy, saying it was a major hurdle in its expansion plans.

Rosneft and its partners had in August 2017 completed a USD 12.9 billion acquisition of Essar Oil to enter the world’s fastest-growing energy market. The company will, however, have to pay a 20 percent withholding tax even after paying corporate tax and dividend, Rosneft’s first vice-president for economics and finance Pavel Fedorov had said.

Fedorov said the company was also not able to claim a credit of tax it pays on inputs in its Vadinar refinery in Gujarat. While the Goods and Services Tax (GST), which unified over a dozen central and state levies, came into effect from 1 July 2017, five petrol goods — crude oil, natural gas, petrol, diesel, and aviation turbine fuel (ATF) — were kept out of it.

This means the tax, a user of natural gas pay on inputs cannot be offset by taxes paid at consumption end. State-owned gas utility GAIL India Ltd Chairman B C Tripathi, speaking at the same session at Petrotech, too favored bringing natural gas under the ambit of GST, saying it is a low hanging fruit.

Also, power plants must start using natural gas as it would be difficult to achieve the target of raising the share of natural gas in the energy basket to 15 percent by 2030 from the current 6.2 percent.

Al-Thani said natural gas demand worldwide is expected to grow at the rate of 1.5 percent through 2035 and LNG demand is projected to grow by 4 percent to 600 million tonnes from 290 million tonnes in 2017.

Qatar, he said, will raise LNG production capacity to 110 million tonnes by 2023 from the current 77 million tonnes.


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Source: Money Control.
Curb misuse of GST Act before it snowballs into a mega scam: HC

Curb misuse of GST Act before it snowballs into a mega scam: HC

Refuses to grant anticipatory bail to 9 individuals accused of cheating
Attempts to misuse the Goods and Services Tax (GST) by unscrupulous elements, who create fake invoices to claim input tax credit from the government, should be nipped in the bud to ensure that it does not grow into another mega scam having a direct impact on the nation’s economy, the Madras High Court has said.

Justice N. Anand Venkatesh made the observation while refusing to grant anticipatory bail to Vimal Nayan, Pramod Sharma, Ankit Sharma, Natesh Kothari, Narendra Kumar Kothari, Sanjay Kumar Sharma, Vikrant Sharma, Nemichand Kothari and Sandeep Kothari in a case booked under Central Goods and Services Tax Act of 2017.

The case of the prosecution was that several companies, as well as individuals, had registered themselves with the Goods and Services Tax Network (GSTN) portal and begun the practice of issuing fake invoices without supplying goods. The receiver of such invoices claims input tax credit by cheating the public exchequer.

‘Huge loss’
Claiming that the petitioners were part of one such transaction, Special Public Prosecutor for GST cases V. Venkateswaran told the court that what had been unearthed so far was only a tip of the iceberg whereas the offense was expected to unearth huge loss, running to several thousand crores, having been caused against the interest of the country’s economy.

Hence, the Principal Commissioner of Goods and Services Tax and Central Excise had decided to invoke the 2017 Act which provides for arresting the accused and imposing a maximum punishment of five years of imprisonment.

Since prima facie materials were available to suspect the involvement of the petitioners, the prosecution wanted to act fast against the perpetrators.

Observing that the department must be given complete freedom to investigate cases of the present nature because they involve national interest, Justice Venkatesh said: “This court by entertaining an anticipatory bail petition and by imposing certain conditions, should not tie the hands of the department in proceeding further.”

Though the petitioners’ contended that they need not be unnecessarily arrested in a case that rested entirely on written records, he said: “When the accused persons are charged with violation of CGST Act involving colossal loss of revenue and the investigation is at a very nascent stage, prudence demands that this court should keep its hands off.”

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Source: The Hindu.
Delayed filing of returns: Rs 4,172 crore late fee collected since GST launch

Delayed filing of returns: Rs 4,172 crore late fee collected since GST launch

Fee for late filing of returns is Rs 25 per day for CGST and an equal amount under State GST. A total of Rs 4,172.44 crore was collected by the government as late fee for the delayed filing of various goods and services tax (GST) returns since the implementation of the indirect tax regime on July 1, 2017, till February 4, 2019, Finance Ministry data showed.

GST-related laws provide for the levy of late fee to discourage delayed filings of returns, the fee for which has been brought down for various categories during the course of implementation of the indirect tax regime. The collections under late fee are net of reversals.

The fee for late filing of the returns is Rs 25 per day for Central GST (CGST) and an equal amount under State GST (SGST). However, those businesses who have to file returns but have ‘nil’ tax liability are required to pay a fine of Rs 10 under CGST law, and an equal amount under SGST law.

While providing the data on mop-up from levy of late fee in reply to a query in Lok Sabha recently, Minister of State for Finance Shiv Pratap Shukla, said: “Late fee is levied u/s 47 of the CGST Act, 2017 on any registered person who fails to furnish returns by the due date at the rate of Rs100 every day during which such failure continues subject to maximum amount of Rs 5,000.

To ameliorate the concerns of taxpayers and to smoothen the transition to new regime the government had reduced the late fee for delayed filing of details in Form GSTR-1 and returns in Form-GSTR-3B and Form GSTR-4 to Rs 25 for every day during which such failure continues, subject to maximum amount of Rs 5,000 under CGST and an equal amount under SGST, he said.

The GST Council in its 31st meeting held on December 22 had announced a one-time waiver for late filing penalty for those who are supposed to file GST returns till March 31 following demands for the same from several quarters. “Late fee shall be completely waived for all taxpayers in case of Form GSTR-1, Form GSTR-3B & Form GSTR-4 for the months/ quarters July 2017 to September 2018 are furnished after December 22, 2018, but on or before March 31, 2019,” the ministry statement had said. Also, the due date for filing of annual returns was extended up to June 30, 2019.

Under the GST regime, registrants are supposed to file GSTR-1 which is the final sales return and GSTR-3B return, which is the summary sales return filed by businesses. GSTR-4 is filed by businesses who have opted for composition scheme under the GST law.

As on December 27, 2018, 1,17,48,408 taxpayers were registered under GST which include 60,73,574 existing taxpayers who have migrated to GST and 56,74,834 newly registered taxpayers.

While revenue from direct taxes are estimated to exceed the initial budget target by Rs 50,000 crore to Rs 12 lakh crore in 2018-19, the goods and services tax collections have fallen short of the budget target by Rs 1 lakh crore, with revised estimate for 2018-19 pegged at Rs 6.44 lakh crore, according to interim Budget 2019-20 presented on February 1.

GST collections have remained below estimates, but average collections have improved in the current fiscal year over the previous year. The average monthly gross collection of GST in 2018-19 till the month of January is Rs 97,555 crore, as compared to last year average monthly collection of Rs 89,885 crore.


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Source: Indian Express.
‘Pass on GST cut to consumers or be prepared for action’

‘Pass on GST cut to consumers or be prepared for action’

The state-level screening committee of antiprofiteering of GST has warned traders, manufacturers that if they do not pass on benefits due to a decrease in GST on certain goods to consumers, action will be initiated.

Principal commissioner and member, State Screening Committee, M Srinivas had even issued a public notice on January 25 in this regards.

“GST Council on December 22, 2018, has recommended a reduction in GST rates of several goods and services. As per Section 171 of the GST Act, any reduction in the rate of tax or benefit of the input tax credit shall be passed on to the recipient by way of commensurate reduction in prices,” Srinivas told TOI.

Consumers could file a complaint regarding suspected profiteering or refusal to pass on the benefit of the input tax credit with the state-level screening committee or directly on the website naa.gov.in.

The complainants should produce basic documents like invoice or proof of purchase, packing material containing declared price and bills or documents pertaining to purchase prior to reduction and after reduction. The application after scrutiny at the state-level would be forwarded to the national-level committee.

Vegetables uncooked or cooked by steaming or boiling in water, frozen, branded and put in a unit container, GST of 5% has been waived off. GST on power banks of Lithium-ion batteries was reduced from 28% to 18%, while GST on digital cameras, video camera recorders, video game consoles, retreated pneumatic tyres of rubber, monitors and TVs up to 32 inches, pulleys and gearboxes has been reduced from 28% to 18%.


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Source: Times Of India.
On GST Council table: Tax relief for real estate, duty relaxation for exporters

On GST Council table: Tax relief for real estate, duty relaxation for exporters

The proposal was discussed in 26th GST Council meeting in March last year and since many technical, legal and administrative issues were identified, its implementation was put on hold.

Duty relaxation for exporters and a tax relief package for the real estate sector are likely to be discussed at the next meeting of the GST Council, which is expected to meet once before the model code of conduct kicks in ahead of the Lok Sabha elections.

Targeting the steady erosion of export competitiveness across segments, which is especially telling in labour-intensive sectors such as textiles and garments, the Centre is readying a proposal for a duty drawback like scheme under the Goods and Services Tax (GST) regime that could comprehensively compensate exporters for embedded taxes.

Also, a ministerial panel set- up last month to analyse tax issues faced by the real estate sector under the GST regime is set to make a strong push for lower tax rates for under-construction residential properties and the affordable housing segment.

Currently, under the GST regime, compensation for taxes other than the basic customs duty (BCD) is not given to exporters, which ends up eroding their competitiveness. Officials involved in the exercise confirmed that the duty drawback scheme is being readied after a letter from the Directorate General of Foreign Trade (DGFT) to the Central Board of Indirect Taxes & Customs sought relief on this count.

After this, a proposal has been sent to the GST Policy Wing for a duty drawback like scheme under GST. GST officials are also discussing contours of the proposed e-wallet scheme for exporters, which was put on hold for six months until October last year.

“A scheme to provide more sops for exporters such as some relief on the front of the additional levy is being worked on. It would be more clarificatory in nature aimed at freeing up the working capital of exporters,” said a government official, adding that the existing export incentive scheme Merchandise Export from India Scheme (MEIS) could be tweaked to give some more sops to exporters.

The Commerce Ministry has been pushing for more relief to exporters including the e-wallet scheme but the Finance Ministry has raised some concerns about the possible misuse by some fly-by-night exporters, said another official. An inter-ministerial meeting regarding the e-wallet scheme for exporters has been scheduled for next week.

The e-wallet scheme or electronic e-wallets will be credited with notional or virtual currency by the DGFT. This notional/virtual currency will be used by the exporters to make the GST/IGST payment on goods imported by them so their funds are not blocked.

The proposal was discussed in 26th GST Council meeting in March last year and since many technical, legal and administrative issues were identified, its implementation was put on hold.

“It will monitor the track record of the exporter and provide relief on taxes paid on inputs. Last time, the discussion stalled as there were concerns about the availment of credit and the exporter having an edge over others since his working capital will be free compared to other exporters,” an official said.

Meanwhile, the Group of Ministers (GoM), under Gujarat Deputy Chief Minister Nitin Patel, set up last month to analyse tax rates and challenges being faced by the real estate sector under the GST regime is leaning in favour of lower rates for under-construction residential properties.

The panel has favoured lowering the GST rate on under-construction residential properties to 5 per cent (without input tax credit) from the present rate of 12 per cent with an input tax credit (after abatement of land) and for affordable housing to 3 per cent from the current rate of 8 per cent.

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Source: Indian Express.
GoM favours cut in GST to 5% from effective rate of 12%

GoM favours cut in GST to 5% from effective rate of 12%

Currently, GST is levied at 12 per cent with input tax credit (ITC) on payments made for under construction property or ready to move in flats where the completion certificate has not been issued at the time of sale.

A Group of Ministers (GoM) formed to analyse tax rates and issues being faced by the real estate sector under the goods and services tax (GST) regime has favoured reducing GST rate on under-construction residential properties to 5 per cent without input tax credit from current effective rate of 12 per cent, after abatement of value of land. The panel is also leaning in favour of a lower rate for affordable housing at 3 per cent from 8 per cent at present, a government official said.

The seven-member GoM, headed by Gujarat Deputy Chief Minister Nitin Patel, will finalise its recommendations in 1-2 days and then submit its recommendations to the GST Council, which will take the final decision on the proposal. “The industry players have asked for a higher rate with input tax credit but the ministers felt that the benefits of input tax credit don’t get passed on to homebuyers. That’s why like in the case of restaurants, the GoM has favoured lowering the GST rates on residential houses to 5 per cent without input tax credit and to 3 per cent for affordable housing,” the official said.

Currently, GST is levied at 12 per cent with input tax credit (ITC) on payments made for under construction property or ready to move in flats where the completion certificate has not been issued at the time of sale.

The effective pre-GST tax incidence on such housing property was 15-18 per cent. GST, however, is not levied on buyers of real estate properties for which completion certificate has been issued at the time of sale. There have been complaints that builders are not passing on the ITC benefit to consumers by way of reduction in the price of the property after the rollout of the GST.

We want to ensure lower tax rates for housing for the middle class and homebuyers, Gujarat’s Deputy Chief Minister Nitin Patel told reporters after the meeting. Tax experts, however, said this may lead to breaking of inputs tax credit chain as some inputs such as cement are taxed at a much higher rate of 28 per cent.

Pratik Jain, Leader, Indirect Tax, PwC India said, “While the intention of the government is to provide relief to the end customer, from a structural standpoint, it should be ensured that the chain of GST credit is not broken. Perhaps a better approach would be to reduce prevailing GST rate on residential property, say bringing the effective tax rate down to 8 per cent from 12 per cent, while continuing the benefit of input tax credit.”

Abhishek Jain, Tax Partner, EY said, “For real estate properties where the cumulative impact of tax cost on account of denial in credits and 5 per cent output GST rate is lesser than the current 12 per cent rate, this rate cut would be quite positive. But where the cumulative cost is higher than 12 per cent, this rate reduction could entail an increased tax cost.”

The GST Council, headed by the Union Finance Minister and comprising his State counterparts, on January 10 decided to set up the GoM. The other Ministers in the seven-member GoM are the Finance Ministers of Maharashtra Sudhir Mungantiwar, Karnataka’s Krishna Byre Gowda, Kerala’s Thomas Isaac, Punjab’s Manpreet Singh Badal, Uttar Pradesh’s Rajesh Agarwal and Goa Panchayat Minister Mauvin Godinho.

Apart from Patel and Gondinho, Friday’s GoM meeting was attended by Mungantiwar and Badal through video conferencing. Also other state ministers, who are part of the panel, too would be giving their views in a couple of days.


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Source: Indian Express