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Advance rulings system under GST will take time to resolve, says CBIC

Advance rulings system under GST will take time to resolve, says CBIC

The industry might have to live up with the current structure of the authority of advance rulings (AARs) under the Goods and Services Tax (GST) since there is no consensus between the union government and states over the uniform central body, said a key member of the Central Board of Indirect Taxes and Customs (CBIC).

“The Centre is also trying to push for that there has to be a single, uniform, advance ruling authority. But unfortunately, think about a situation, every state says, I am having an equal right as the Centre,” John Joseph, CBIC member (budget) said addressing a conference organized by Associated Chambers of Commerce (ASSOCHAM).

He said even for regional benches too, there is a huge disenchantment between the states.

Currently, each state has its own AAR and its rulings are specific to the concerned states. As such, contrasting rulings by AARs on solar panels and other issues have disturbed the industry. Also, members of AARs are all government officials, and as such the industry complains that it is tilted towards the authorities.

“I do agree that industry is having a serious problem with regards to advance ruling. We have been seeing that in the case of solar power,” Joseph said.

He explained that currently the government goes through the entire ruling, study the issue and then issue a clarification.

“Once the clarification is issued, the entire advance ruling thing becomes null and void. Maybe for some time, you will have to adjust to the situation till a trust is being developed between the Centre and the states,” he said.

The CBIC member said that the issue will take time to get resolved, especially due to the “trust deficit” between the Centre and states in the GST Council, on account of allocation of revenue that accrues from the rulings.

Despite the huge clamour for two rates under the Goods and Services Tax (GST), Joseph said it is “a wish of a tall order”.

“In a country with about 20 percent of the world’s population, one just cannot have a uniform tax rate which can take care of everybody. It will be totally unethical and illogical too,” he said.

Except for a handful of items, all items are being taxed at a lower rate than before, he added. “But the consumer is still not happy due to a perception issue with regard to earlier and current rates with subsumed taxes.”

Saying that the recent election results will not impact GST in any way, he praised the “sagacity” of politicians across the spectrum for the consensus built around the tax. He was referring to the issues arising between the Centre and states with regard to advance rulings and place of supply issues.

However, the coordination between the Centre and states will save the tax, and it will not be thrown out “in a lock stock and barrel fashion” that happened in Malaysia, he said. The CBIC member admitted that some procedural changes might happen.

Joseph said that a simpler and better version of the new GST return format will be released initially, which will become comprehensive later, improving the quality of the return over time. “Things that happened in the past may not happen this time,” he said.

On compliance, he admitted that initially, the government did not want to go hard on businesses, but has changed the stance since April. “We have detected almost Rs 120 billion worth of GST evasion this year. This is huge compared to what happened in the central excise regime,” he added.

The most important outcome under GST is the improvement in the logistics chain. The time taken for trucks to move from one point to other point has almost been halved or one-third, he said.

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Source: Business-Standard
GST Council may look to rationalise 28% slab

GST Council may look to rationalise 28% slab

The GST Council is likely to rationalize the 28 per cent slab by cutting tax rates on construction items, like cement, in its meeting next week.

The council, chaired by Finance Minister Arun Jaitley and comprising his state counterparts, has pruned the 28 per cent slab by cutting tax rates on 191 goods over the last one-and-a-half year, leaving only 35 items in the highest slab.

“The idea is to keep only those items in the 28 per cent slab which are used for luxury purpose and demerit goods. The final call will be taken by the Council,” an official told PTI.

The next meeting of the council is scheduled on December 22.

There were around 226 goods in the 28 per cent category, when the Goods and Services Tax (GST) was implemented on July 1, 2017.

In its July meeting, the GST Council had further rationalized the 28 per cent slab by cutting rates on paints and varnishes, and on daily-use items like perfumes, cosmetics, toiletries, hair dryers, shavers, mixer grinder, vacuum cleaners, lithium ion batteries, and cut rates to 18 per cent.

The 35 goods, which are left in highest slab include cement, automobile parts, tyres, automobile equipment, motor vehicles, yachts, aircraft, aerated drinks, betting and demerit items like tobacco, cigarette and pan masala.

The official said cutting GST rate on cements would give a boost to the housing and construction industry as well as have positive impact on employment generation.

In the first eight months (April-November) of the current fiscal, the government has mopped up over Rs 7.76 lakh crore from GST. The 2018-19 budget had estimated annual GST collection at Rs 13.48 lakh crore, which means a monthly target of Rs 1.12 lakh crore.

EY Tax Partner Abhishek Jain said: “While a general expectation has always been for restricting the 28 percent rate list to only luxury/sin goods, before a further pruning of this list, the Government may coherently analyse the revenue impact of the same”.

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Source: ET.Auto
Companies vanishing act on GST invites taxmen

Companies vanishing act on GST invites taxmen

Taxmen may soon come knocking at the premises of companies that have registered for the goods and services tax (GST) and vanished, not having filed returns or paid their taxes.

The authorities are considering putting in place an extensive plan to hunt for these missing GST taxpayers, which includes visiting their premises.

There is a growing worry that many registered taxpayers have disappeared, a government official said. Besides, there are cases of fake invoices used to claim input tax credits.

The tax authorities will initially verify the premises of GST-registered companies and could expand the effort to include scrutiny if they find tax hasn’t been paid.

Karnataka has implemented the plan and more states are expected to follow as GST collections remain below Rs 1-lakh crore a month. GST revenue stood at Rs 97,637 crore in November, falling back after crossing Rs 1lakh crore in October.



Tax administrators are also worried about a drop in filings of GSTR-3B, a tax return form to be submitted by all those registered for GST every month. The form was introduced to lower the compliance burden.

According to a Karnataka government circular, the inspection of business premises of registered entities by the enforcement wings revealed non-compliance on the part of taxable people by not paying taxes that are legally due to the government or not filing returns.

“For effective tackling of the situation with regard to persistent non-filers, more cases are required to be visited to ensure timely payment of tax and filing of returns,” it said.

Officials are empowered under the GST law to visit registered premises to carry out scrutiny, verification, and checks required for safeguarding revenue interests .

Tax experts said compliance under GST hasn’t improved and the tax authorities are expected to resort to such measures.

“Percentage of compliance in terms of filing of returns has been a major concern for the government, particularly in light of recent cases of tax evasion and fake invoices that have surfaced. Over the last several months, compliance has not improved significantly,” said Pratik Jain, national leader, indirect taxes, at PwC.

From the industry standpoint, it only means that much greater rigour needs to be put in place to ensure that their vendors are GST-compliant, Jain said

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Source: Economic Times. India
GST council may look at reducing tax on third party insurance premium

GST council may look at reducing tax on third party insurance premium

The Goods and Services Tax (GST) Council may consider cutting the tax rate on payment of third-party vehicle insurance premium in order to “ease the burden on consumers”, The Times of India reported.

The newspaper quoted sources as saying that the Prime Minister’s Office (PMO) has asked the finance ministry (Department of Financial Services) to look into the issue and “prepare a proposal that can be placed before the GST council”.

Third-party insurance premium is taxed at 18 percent right now, and it is mandatory for every vehicle owner to have a policy.

“There was a unanimous view that the GST rate needs to be rate needs to be rationalised in this case since the vehicle owner has no choice than buying the policy,” a government official told the newspaper.

The GST council is expected to meet in the next 10 days to consider various contentious issues, including bringing petroleum and aviation fuel under its ambit.

Moneycontrol had earlier reported that the Insurance Regulatory and Development Authority of India (IRDAI) was considering cutting third-party vehicle insurance premium by 10 percent.

Commercial vehicle owners have been asking for a rate cut as the mandatory tax makes the vehicles expensive. They believe that a reduction in tax rate will also help increase the insurance cover, which at present is only 50 percent of all vehicles.

“Since it serves a greater social cause and has a large impact, we are still hopeful that the government will do away with the GST. This will bring down the premium of a big truck by Rs 5,000-7,000 on an average and will bring some relief,” Bal Malkit Singh of All India Motor Transport Congress told the paper.

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Source : Money Control
GST evasion worth Rs 12,000 crore detected between April-Nov

GST evasion worth Rs 12,000 crore detected between April-Nov

The government has detected GST evasion worth Rs 12,000 crore in 8 months till November, a senior tax official said on Wednesday.

Central Board of Indirect Taxes and Customs (CBIC) memberJohn Joseph said despite the electronic way or e-way bill mechanism there has been rampant evasion and there is a to increase compliance.

“We started anti-evasion measures from April onwards, and from April-November we have detected Rs 12,000 crore of GST evasion. There are smarter guys outside who knows how to pocket the money, Joseph said addressing an Assocham event.

Joseph, who looks after investigation in the CBIC  said almost Rs 8,000 crore worth GST evasion has been recovered by the tax officials.

Goods and Services Tax (GST), which subsumed 17 local taxes, including excise duty and service tax, was introduced on July 1, 2017. Since it was a new tax, the government had decided to go slow on government had decided to go slow on its implementation.

Joseph said only 5-10 per cent of the 1.2 crore assessees are evading GST and bringing a bad name to the industry. “We need to improve compliance mechanism.”

On industry concerns as to whether a change in government might lead to an overhaul of the GST process, Joseph said: With all the apprehensions that you have, whether the election results are going to be bad for the GST or not, I can tell you very clearly that the same politicians whether in opposition or ruling party, they all came together to conceive this.

“There may be some changes in law, some procedural changes can definitely happen, but it will not be lock, stock, and barrel as in the case of Malaysia.”

He said the GST Council, comprising the Centre and states, had taken all decision relating to the new indirect tax regime.

The CBIC member also said the new GST return forms will have a beta version initially, so that industry has enough time to suggest what could be done to improve the quality of returns.

In July, the CBIC had put up in public domain draft GST  return forms ‘Sahaj’ and ‘Sugam’ and sought public comments. These forms will replace GSTR-3B (summary sales return form) and GSTR-1 (final sales returns form).

The new forms are slated to be launched in April 2019.

With regard to industry concerns over varied orders passed by the authority for advance ruling (AAR), Joseph said the Centre was pushing for a national bench for AAR but it hit the roadblock as the bench was required to have about 40 members with representations from every state.

“I do agree, there is a real serious issue in that (Advance Ruling). The Centre is trying to push that there has to be a single advance ruling authority but unfortunately think about a situation where every state says I have equal right as the Centre. So, think about a situation where a national bench is constituted with 39/40 people sitting, how do you think it will work. That is where the problem is coming in,” Joseph said.

He said even for setting up regional benches there is a huge disagreement between the states.

Currently, what the government is doing is they are going through the entire thing, studying the issue and then issuing a clarification, Joseph added.

“Once the clarification is issued, the entire advance ruling thing becomes null and void. For some time, you have to adjust to that situation till a trust is developed between the Centre and states,” Joseph added.

As per the law, all states are required to set up at least one AAR for seeking advance ruling over GST levy and one appellate authority to hear appeals against the AAR order.

In March, the New Delhi bench of the AAR had held that duty-free shops at airports are liable to deduct GST from passengers. However, these shops were exempt from service tax, and Central Sales Tax in the earlier regime.

Further, the solar industry too was left in a vexed situation when the Maharashtra AAR said that 18 per cent GST rate would be levied for installation works, but the Karnataka-bench of AAR passed an order levying 5 per cent GST on the same.

On concerns over availing input-tax credit, Joseph asked the industry to submit their representations, backed by data, along with suggestions.

XaTTaX – World Class Automated eSolution for Return filing and e-Waybill

Source : Times Of India
GSTR-1 Due Date extended

GSTR-1 Due Date extended

The Central Government has extended the due date for filing GSTR-1, the quarterly return for registered persons with aggregate turnover up to Rs. 1.50 Crores for the period of October to December 2018 to 31st January 2019.

The GST portal today showed that the due date for filing GSTR-1 is 31st January 2019.

GSTR-1 is a monthly or quarterly return that should be filed by every registered dealer. It contains details of all outward supplies i.e sales.


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Source : Taxscan
No GST on sale of properties with completion certificate

No GST on sale of properties with completion certificate

The finance ministry on Saturday said buyers of real estate properties for which completion certificate is issued at the time of sale will not have to pay GST. However, Goods and Services Tax (GST) is applicable on the sale of under-construction property or ready-to-move-in flats where completion certificate is not issued at the time of sale.

“It is brought to the notice of buyers of constructed property that there is no GST on sale of complex/ building and ready-to-move-in flats where sale takes place after issue of completion certificate by the competent authority,” the ministry said in a statement.

The ministry also asked builders to reduce prices of properties by passing on the benefit of lower GST rate to customers. “Builders are also required to pass on the benefits of lower tax burden to buyers of property by way of reduced prices/ installments, where effective tax rate has been down.”

Affordable housing projects, including the Jawaharlal Nehru National Urban Renewal Mission, Rajiv Awas Yojana, Pradhan Mantri Awas Yojana or any other housing scheme of state governments attract 8% GST, which can be adjusted by builders against its accumulated input tax credit (ITC), the ministry said.

“For such (affordable housing) projects, after offsetting ITC, the builder or developer in most cases will not be required to pay GST in cash as the builder would have enough ITC in his books of account to pay the output GST.”

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Source: Live Mint
India likely to offer GST relief for the BPO Industry

India likely to offer GST relief for the BPO Industry

India could soon offer some relief to the back-office support sector that is rattled by the recent Authority for Advance Ruling (AAR) decision that services rendered to overseas clients did not qualify as exports and would face GST of 18%.

The issue could be clarified soon, said a senior government official privy to the deliberations. “Officials are examining it after which the law committee under the GST Council would take it up,” the official told ET .

The $167-billion IT services and BPO sector has been in a turmoil since the Maharashtra AAR gave its ruling in response to an application by Vserv Global Pvt Ltd a month ago.

The authority held that back-office support services rendered by the applicant did not qualify as ‘export of service’ and were in the nature of arranging or facilitating supply of goods or services between overseas company and customers, falling in the category of intermediary services.

Exports do not face tax in the country as they are consumed outside and back-office services have enjoyed this benefit even in the erstwhile service tax regime

The AAR decision has hit both Indian back-office service providers as well as the captive units of multinationals. India has more than 500 global in-house delivery centres, employing over 3.5 lakh.

A levy of 18% on these services would completely derail the cost dynamics of the back-office model that operates on thin margins and increasingly face challenges from other low-cost jurisdiction such as the Philippines.

The issue could be taken up by the GST Council or even clarified by the GST Implementation Council once the law committee firms up its view, said the official quoted earlier.

Industry bodies such as Nasscom have represented to the government on the issue. Association of some US firms is also likely to take up the issue with the government.

The industry’s contention is that the ruling denying export benefits to such transactions would result into exporting taxes and is not in sync with the government’s stated intent.

Industry fears taking a big hit if this interpretation of the intermediary services could be used to qualify any back-office support service as intermediary. “The concept of intermediary is prone to misinterpretation and in spite of a number of cases of service tax regime settling the definition, the GST department is creating disputes for exporter of services, given conflicting AAR rulings,” said Bipin Sapra, partner at EY

“The GST Council needs to amend the law or clarify the intent, else the exporters of IT & ITES services will be saddled with unnecessary GST costs, which will make them uncompetitive,” he said.

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Sources: Economic Times
Government extends deadline for filing annual GST return by three months

Government extends deadline for filing annual GST return by three months

The government has extended the due date of filing annual Goods and Services Tax (GST) return by three months. “The competent authority has decided to extend the due date for filing GSTR-9, GSTR-9A and GSTR-9C till March 31, 2019,” the Central Board of Indirect Taxes & Customs (CBIC) said in a notification on Friday. The previous deadline was December 31, 2018.

“The requisite forms shall be made available on the GST common portal shortly,” the notification added.

It further stated that “Form GSTR-9 and form GSTR-9A have been notified dated 04.09.2018 (September 4) while form GSTR-9C has been notified dated 13.09.2018 (September 13) as part of the CGST rules.”

GSTR-9 is the annual return form for normal taxpayers, GSTR-9A is composition taxpayers, while GSTR-9C is a reconciliation statement.

The Confederation of All India Traders (CAIT) had urged finance minister Arun Jaitley to extend the last date for filing annual GST return. It noted that the concept is till unclear to a large number of traders and most are not even aware of the obligation of filing annual GST return.

“Under such circumstances it will not be possible for the traders to file their annual GST return by the stipulated period and as an immediate measure, the CAIT has urged to extend the last date of filing annual GST return up to March 31 2019 for the period 2017-18,” the CAIT said.

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Source: Times Of India.


CBIC extends due date for filing of Form GSTR-7 for the months of Oct to Dec till Jan 31st 2019

CBIC extends due date for filing of Form GSTR-7 for the months of Oct to Dec till Jan 31st 2019

The Central Board of Indirect Taxes and Customs (CBIC ) has extended the due date for filing of Form GSTR-7 for the months of october 2018 to December 2018 till January 31st, 2019. GSTR-7 is a monthly return to be filed by the persons required to deduct TDS under the GST. As per the Act, every deductor shall deduct the tax amount from the payment made to the supplier of goods or services or both and deposit the tax amount so deducted with the Government account through NEFT to RBI or a cheque to be deposited in one of the authorized banks, using challan on the common portal. In addition, the deductors have entrusted the responsibility of filing return in FORM GSTR-7 on the common portal for every month in which deduction has been made based on which the benefit of deduction shall be made available to the deductee.

[[To be published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i)] Government of India Ministry of Finance (Department of Revenue) Central Board of Indirect Taxes and Customs Notification No. 66/2018 – Central Tax
New Delhi, the 29th November, 2018

G.S.R. …..(E).—In exercise of the powers conferred by sub-section (6) of section 39 read with section 168 of the Central Goods and Services Tax Act, 2017 (12 of 2017) (hereinafter referred to as the said Act), the Commissioner hereby extends the time limit for furnishing the return by a registered person required to deduct tax at source under the provisions of section 51 of the said Act in FORM GSTR-7 of the Central Goods and Services Tax Rules, 2017 under sub-section (3) of section 39 of the said Act read with rule 66 of the Central Goods and Services Tax Rules, 2017 for the months of October, 2018 to December, 2018 till the 31st day of January, 2019.

[F. No. 20/06/17/2018-GST (Pt. I)]

(Dr. Sreeparvathy S.L.) Under Secretary to the Government of India

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Source: Taxscan