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What is GSTR 9? Have a Thorough Knowledge about GSTR 9 Online Filing Procedure

What is GSTR 9? Have a Thorough Knowledge about GSTR 9 Online Filing Procedure

These days you might have come across different types of returns which are to be filed under the GST regime. Here, we shall discuss the filing process of the GSTR 9 return in detail. GSTR 9 refers to an annual return which should be filed on a yearly basis by those taxpayers who are registered under the GST system. Further, it includes details related to inward and outward supplies received or made during the preceding year under various heads like SGST, CGST, IGST, and HSN codes. In fact, it is a consolidated statement of the entire monthly/quarterly returns such as GSTR 1, GSTR 2A, GSTR 3B, etc., which are filed during the relevant year. Though this return seems to be a bit complicated, it helps in the reconciliation of data, thereby facilitating complete transparency in the disclosures.

Who All are required to File GSTR 9?

All those taxpayers or taxable individuals who are registered under the GST regime are required to file their GSTR 9 return. Anyhow, the below-mentioned individuals need not file this return:

  • Those taxpayers who opt for composition scheme (they should file GSTR 9A)
  • Input service distributors
  • A casual taxable person
  • Those individuals who pay TDS under section 51 of the CGST Act
  • Non-resident taxable individuals

Important Note: According to the decision made in the 37th GST Council meeting held on 20th September 2019, the GSTR 9 filing for businesses that have a turnover up to Rs.2 crore have been made optional for FY 17-18 and FY 18-19* (*this has been subject to notification).

Due Date, Late Fee, and Penalty for Not Filing GSTR 9 Return

The annual GSTR 9 return form should be provided on or before 31st December in the concerned financial year bracket. In fact, the due date for filing GSTR 9 has been further prolonged to November 30th 2019.
If the GSTR 9 return has not been filed within the due date, the late fee is Rs.100
per day, according to both CGST and SGST Act. In other words, the total liability would be Rs.200 per day of default. Further, this would be subject to a maximum of 0.25% of the turnover of the taxpayer in the concerned state or Union Territory. Anyhow, as per the IGST Act, no late fee is required.

The Important Details Which are Required to be filled in the GSTR 9 Form

The GSTR 9 form has been broadly divided into 6 parts and 19 sections. Every part asks for information which is readily available from the previous returns as well as the books of accounts. Generally, the disclosure of annual sales needs to be done in this form, dividing it between the cases which are subjected to taxation and those which are not subjected to taxation. As concerned with the purchase side, the annual value of inward supplies, as well as the corresponding ITC (Input Tax Credit) availed, should be furnished. Further, these procurements should be categorized as inputs, capital goods, and input services. Moreover, the information concerning ITC that should be reversed owing to ineligibility should also be entered.

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The Different Types of Annual GST Returns

There are different types of annual returns which come under GST:

  • GSTR 9 Annual Return Form: A regular taxpayer who files GSTR 1 and GSTR 3B forms need to file the GSTR 9 return
  • GSTR 9A: All the composition scheme holders under GST are required to file the GSTR 9A return
  • GSTR 9B: All e-commerce operators are required to file the GSTR 9B return during a financial year
  • GSTR 9C: Those taxpayers whose annual turnover cross Rs.2 crore need to file the GSTR 9C return during a financial year. Further, these taxpayers need to collect the accounts which are to be audited, along with a copy of the tax reconciliation statement which has been already paid, the audited annual accounts, and the tax payable according to the audited accounts.

To summarize, you would be able to get a gist of the GSTR 9 online filing procedure from the information furnished here.

Explore the Salient Features of GSTR-1

Explore the Salient Features of GSTR-1

GSTR-1 refers to a particular kind of return for outward supplies, which should be filed by each registered dealer on a monthly or quarterly basis. It necessarily indicates the entire sales transactions of a business. This return is segregated into 13 sections which are listed below:

  1. The GSTIN of the business you are engaged in (you can also use a provisional Id as GSTIN, if you do not have one)
  2. The exact legal name of the business
  3.  The aggregate turnover achieved in the last financial year
  4. The taxable supplies/sales offered to registered individuals including UIN-holders
  5. Taxable sales/supplies offered to unregistered individuals who stay outside their base state and that exceeding Rs.2.5 Lakhs (which implies inter-state sales to unregistered individuals, which exceeds Rs.2.5 Lakhs)
  6. Export sales which is deemed and zero-rated
  7. Sales offered to unregistered individuals which is not included in the 5th point
  8. The entire sales which is carried out via an e-commerce operator
  9. The inter-state sales made to unregistered individuals up to an amount of Rs.2.5 Lakhs
  10. Exempted, nil-rated, and non-GST supplies – those which are exempted and not included in the above points
  11. Amendments made in taxable supplies/sales to registered businesses in the preceding months
  12. Amendments made in taxable supplies/sales to unregistered businesses in the past months
  13. Information regarding advances adjusted or received during a month, from the clients
  14. The HSN summary for outward supplies
  15. The documents which are issued during a month, which contain information on the invoice serial numbers, debit notes, and credit notes for the month.
Due Date For GSTR1

What is the Due Date for Filing GSTR-1?

The due date for filing GSTR-1 depends on the turnover of the business. Those businesses which have sales up to Rs.1.5 Crore would have to file quarterly returns whereas, other taxpayers that have sales more than Rs.1.5 Crore would have to file monthly returns which will be 11th of every month.

Who All Are Required to File GSTR-1?

Each registered person is needed to file GSTR-1, regardless of whether there are any transactions carried out during a particular month or not.

The list of registered individuals who are exempted from filing the return are given below:

  • Composition Dealers (The composition scheme is an easy scheme under GST for small-time taxpayers, in which they can avoid complicated GST formalities and remit GST for a fixed turnover rate. This scheme is applicable for those taxpayers that have a turnover less than Rs.1.0 Crore (as per a notification of CBIC, the threshold limit has been increased from Rs.1.0 Crore to Rs.1.5 Crore))
  • Input Service Distributors (An Input Service Distributor or ISD refers to a business for which invoices are issued for the services used by its branches. The tax paid is disbursed to these branches on a proportional basis by means of an ISD invoice. Further, though these branches can have dissimilar GSTINs, they need to have the same PAN as the ISD)
  • Those who are suppliers of Online Information and Database Access or Retrieval (OIDAR) services and have to pay tax by themselves according to Section 14 of the IGST Act
  • The taxpayers who are accountable to collect TCS (The TCS or the Tax Collected at Source refers to the tax owed by a seller which he collects from a buyer during the time of sale. There are certain organizations or people that are classified as sellers for TCS such as the State and Central governments, local authorities, statutory corporation or authority, the companies registered under the Companies Act, the partnership firms, etc. Similarly, there are a few buyers that are liable to pay TCS to the sellers like the Central and State governments, public sector companies, sports and social clubs, etc.
  • The taxpayers who are accountable to deduct TDS (The TDS or Tax Deducted at Source is a method to levy tax based upon a particular percentage on the amount, which should be paid by the receiver on services or goods. The tax which is collected thus would be taken as revenue by the government. The government agencies, local authorities, the departments or establishments belonging to the State or Central government, and some categories of people as per the notification of the government are liable in deducting TDS under the GST Law. Further, according to a recent notification, a board, or an authority, or any other body which is set up by the government, or a State Legislature, or Parliament, of which 51% equity is owned by the government are supposed to deduct TDS. Others who are eligible to deduct TDS include, a society which is registered under the Societies Registration Act, 1860 and has been established by a local authority or any State or Central government, and the public sector undertakings.
  • A non-resident taxable person (As per the GST Law, a non-resident taxable person refers to any individual who performs transactions which include the distribution of services or goods, or both, either as an agent or a principal, or in any other capacity, but do not have a residence or permanent place of business in India).

Is it Possible to Revise GSTR-1?

Once a return is filed, it is unable to revise the same. If there are any mistakes made in the filing of the return, it could be corrected in the next monthly or quarterly return. For example, if there is a mistake made in the September GSTR-1, you are able to rectify it in the October GSTR-1.

Consequences of Late Fee and Penalty

There is a late fee imposed if you do not file GSTR-1 on time, which is Rs.200 for each day of delay (Rs.100 each according to CGST and SGST Act. The late fee is charged from the date succeeding the due date.  As per a recent update, for nil returns, the late fee has been reduced to Rs.50 and Rs.20 for each day.

To sum it up, it is essential to know the basics of the GSTR-1 return before filing the same to avoid any mistakes. This blog gives an outline of what GSTR-1 is all about.

Realtors seek clarity on GST exemption on development rights 

Realtors seek clarity on GST exemption on development rights 

Mumbai: Realty developers are seeking clarity on recent exemption offered from the goods & services tax (GST) levied on development rights, including transferable development rights (TDRs), development rights certificates (DRCs) and joint development agreements (JDAs).

Realtors’ body, the National Real Estate Development Council (NAREDCO), has written to the Ministry of Housing and Urban Affairs seeking clarity on this.

Last Sunday, the GST Council proposed that intermediate tax on development rights will be exempted only for such residential projects on which GST is payable.

The government decided to more than halve the GST rates for under-construction projects to 5% from 12%. The GST Council removed the input tax credit, while GST on affordable housing was reduced to a marginal 1% along with expanding the definition of such homes. Ready properties that have received occupancy certificate (OC) do not attract GST.

“What if some units are being sold after the project is completed? Being a completed project that has already received an occupation certificate, it will not attract GST. Will the JDA or TDRs used in this project still attract intermediate tax? We need to get clarity on this,” said Niranjan Hiranandani, national president, NARDECO.

The ministry has already announced that details of this scheme will be worked out by an officers committee and will be approved by the GST Council in a meeting to be called specifically for this purpose soon.

As the details of the scheme are yet to be worked out by an officers’ committee, the developers’ body has sought to make a representation to avoid confusions or litigations later on. NAREDCO is of the view that the condition to be fulfilled to receive the tax exemption — “only for such residential projects on which GST is payable” — may lead to litigations.

In its letter to the ministry earlier this week, the developers’ body has cited instances that can lead to confusion and litigations. These examples include that of a residential project with convenience and retail shops, smart and integrated townships tagged as mixed-use development, and sale of residential units post completion of the project.

The NAREDCO representation is that the wording should be: “Tax on development rights, such as TDR/ JDA, long-term lease (premium), FSI shall be exempted”. Effectively, there should be no levying of ‘intermediate tax’ and the exemption should not be restricted to just ‘residential property’, but to all segments and types of property including commercial.

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Taxpayers Alert! Check out these 8 new features at GST Portal: Here’s how easy GSTR filing gets for you

Taxpayers Alert! Check out these 8 new features at GST Portal: Here’s how easy GSTR filing gets for you

TDS/TCS Credit available for utilization

A new window has been enabled for claiming TDS/TCS credits. The taxpayer has the option of accepting or rejecting the TDS/TCS credits available and filing their return, after which the credits get transferred to the cash ledger and can be used for making GST payments.

This facility helps taxpayers easily identify such credits and take action accordingly.

E-way bill data can be imported for GSTR-1

The E-way bill (EWB) and the GST portal has now been integrated. The same gets automatically imported for the B2B and B2C (large) invoices sections as well as the HSN-wise-summary of outward supplies section. Users only need to verify the data and proceed.

This has definitely saved both time and effort for a business person, as it avoids unnecessary data-entry. However, many businesses were performing this sort of reconciliation themselves using smart tools to ensure accuracy of data.

List of preferred banks available for making payments

A taxpayer can choose from a list of 6 preferred banks that will be auto-saved at the time of making payments. If he makes payment through a 7th bank account, the same will get added, and the least used bank account will get removed. He has the option to delete the bank accounts at any point in time.

With this feature in place,the taxpayer need not enter bank details every time, as he can simply select a bank with the click of a button and proceed to make payment.

Refund applications can be filed monthly for quarterly filers

There is good news for taxpayers opting to make payments on a quarterly basis. They now do not have to wait for the quarterly filing of refund applications, as the same can be done monthly. However, a prerequisite for the same would be to ensure that GSTR-1 for the quarter has been filed.

This will definitely help mobilise the working capital flows of business as there is no longer a need to wait till the end of a quarter to apply for a refund.

Appeals can be filed online and system-generated acknowledgment will be issued

A taxpayer can file an appeal against an order passed by an appellate authority, or against an advanced ruling by an appellate authority on the GST portal. He even has the option to file an application with the appellate authority in the case of rectification of a mistake in order passed.

In the event of an appellate authority failing to issue a final acknowledgment within the stipulated time, then a system generated final acknowledgment will be issued with the remark “subject to validation of certified copies”. This has simplified the process of filing appeals and also helps to track the status of the same.

Composition taxpayers can reply to SCN online for compulsory withdrawal

For composition taxpayers, there is a simpler way to reply to show cause notices(SCN) now. This is in the case of a show cause notice being issued for compulsory withdrawal from the composition scheme, and if proceedings are initiated against the composition taxpayer, he now has the option to reply to show cause notices on the portal.

Bank account details not mandatory at the time of registration

Declaring bank account details are now optional at the time of registration for Normal, OIDAR and NRTP taxpayers. Previously, this was a mandatory requirement. The bank account details can be updated at a later date, which will be at the time of the first login.

Hence, a GST registration number can be obtained without the same. New businesses who are in the process of obtaining bank accounts can simultaneously proceed with GST registration, thus saving time.

Claiming of ITC and amendment of B2B invoices of 17-18 are re-opened up till March 2019

Users can now amend B2B invoices of FY 2017-18. The facility to amend the GSTR-1 details of FY 17-18 was closed on filing the September 2018 return. The same has been made available while filing returns for the months of January to March 2019. The input tax credit of FY 2017-18 that was omitted and hence unclaimed up till September 2018 can be claimed now up to March 2019 as well. This was a much-needed remedy for taxpayers who made errors reporting any invoice in the past or previously missed out claiming genuine credit.

While there are updates being rolled out from time-to-time, users are still hoping to see a smooth system that is completely online and indefectible. In the future, users can look forward to more new updates that would familiarise taxpayers with the new return system that is likely to be introduced by July 2019


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Guest house for employees a perk, cannot claim GST input credit rules Odisha AAAR

Guest house for employees a perk, cannot claim GST input credit rules Odisha AAAR

A new ruling by the Appellate Authority of Advance Ruling (AAAR) can open a Pandora’s Box when it comes to an employer, employee relationship and the nature of perquisites being provided.

The case came up when the National Aluminum Company Limited (NACL), a manufacturer of aluminum metal, decided to appeal against the ruling pronounced by the Odisha Authority for Advance Ruling.

NACL has townships at Angul, Damonjodi, and Bhubaneswar for its employees and also runs hospitals at Damanjodi and Angul for its employees along with guest houses for touring employees and guests. The bone of contention was that NACL wanted to claim input credit in maintaining hospitals, residential colonies and guest house and also the upkeep of garden in the residential colonies, mine and office premises. When the case went to the Odisha Authority for Advance Ruling (AAR), input credit was disallowed for some activities.

According to the AAR, inward supplies received by way of management, repair, renovation for furnishing the residential colony does not qualify for the input tax credit as residential accommodation is an exempted supply.

The input tax credit is also not admissible in respect of services and goods procured for maintenance of hospitals and pharmacy outlet as such services, being nil rated also fall under exempt supplies. Similarly, the service availed in relation to plant & garden in the residential colony will also not qualify for input tax credit

NACL was, however, entitled to input tax credit of the tax paid on inward supply of input and input service for maintenance of the guest house, transit house & training hostel. Also, services availed in relation to plantation and gardening within the plant area including mining area and the premises of other business establishments will also qualify for input tax credit.

Following the order by the AAR, the Commissioner (CX &GST, Bhubaneswar) interestingly also preferred to appeal against the order, challenging that the order is not legal and proper to the extent it has allowed credit for maintenance of guest house, hostel and service utilized for plantation and gardening within the plant area, administrative building.

Justifications by NACL in its appeal:
The AAR has wrongly held that the company’s activities of management, maintenance or repair of the townships are not for or in relation to its core business while denying the credit of the tax paid on the goods and services used for management, maintenance or repair of the township of its employees, and horticulture in township. NACL said it undertakes such activities for its business in the course or furtherance of business and, therefore, it is entitled to take credit of tax paid on such services.
The infrastructure of township at Angul, Damanjodi and Bhubaneswar are necessary to run large scale business of manufacturing, where thousands of employees are working.
In terms of GST laws, not only the manufacturing activity but any incidental or ancillary activities thereof are also covered within the expression “business” in the GST laws. Maintenance of various facilities in residential townships is integrally related to the business activities of the appellant and not a welfare activity undertaken by the appellant.

Contentions by the Commissioner:
Residential colonies are built for the welfare and benefit of the employees and extending any sort of benefit to the employees cannot be treated as something used or intended to be used in the course or furtherance of business
Similarly, the ruling of the AAR that utility of service provided through plantation & gardening within the plant area including mining area will be eligible for credit is also not legal and proper as it does not do not pass the legal test, which is used or intended to be used in course or furtherance of business.

Final ruling of the Appellate Authority of Advance Ruling (AAAR):
After considering the legal provisions and facts of the case, the AAAR held as follows:
The ruling of the AAR that inward supplies received by NACL for management, repair, renovation, alteration or maintenance service or goods received for furnishing the residential colony will not qualify for input tax credit is found to be correct.
Expenditure incurred by NACL towards construction, reconstruction, renovation, additions or alterations or repairs to the residential colony including plantation and gardening is not eligible for input tax benefit as it is nothing but a perquisite. “This ruling is likely to open the debate on whether an expenditure incurred by employee qualifies as a perquisite or a business expense incurred during the course or furtherance of business. This is because credit for former is not available while for later it may be available. It is time to re-look at the employment contracts,” says Harpreet Singh, Partner, KPMG India.
However, the AAAR held that the ruling of the AAR entitling NACL to input tax credit of the tax paid on inward supply of input and input services for maintenance of guest house transit house and trainee hostel is found to be not correct as the same is also a perquisite in favour of the employees.
The AAAR, however, allowed credit to NACL on services availed in relation to plantation and gardening within the plant area including mining area and the premises of other business establishments citing that it is a business necessity for controlling pollution as well as atmospheric temperature.

The same is also mandated in various laws under which the Applicant conducts its business such as the Forest Conservation Act, the Environment Protection Act, etc. Therefore, such activities are integral to the business activity and hence can be treated as activities in course or furtherance of its business.

“This is a positive order for the industry as, while allowing input credit of services availed in relation to plantation and gardening within factory premises, the authorities have not only considered whether such expenditure was warranted by any statutory law, but also taken cognizance of the expenditure being a business necessity for controlling pollution, temperature and preventing soil erosion,” added said Singh.
There is a thin line between perquisite and business expenditure and the ruling does not do anything to reduce confusion. For businesses, it will be a setback that facilities like guesthouse that carry certain expenditure, does not qualify for input credit. In considering maintaining and running a guest house as a cost-to-company, the AAAR has stated it in not in furtherance of the business nor is it integral part of the business. The debate on employee benefit and business expenditure is likely to continue.


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GST collections pegged at Rs 7.61 lakh crore for FY20; FY19 budgeted target missed

GST collections pegged at Rs 7.61 lakh crore for FY20; FY19 budgeted target missed

New Delhi: GST collections by the Centre missed the budgeted target set for the current fiscal by Rs 1 lakh crore, while total mop-up from the indirect tax has been pegged at over Rs 7.61 lakh crore for 2019-20.

The government had budgeted to collect over Rs 7.43 lakh crore from Goods and Services Tax (GST) in the current fiscal ending March. However, in the revised estimates, the revenue mop-up has been pegged at over Rs 6.43 lakh crore.

So far, in the 10 months (April-January) of the current fiscal, total GST collections by the Centre and states stood at over Rs 9.71 lakh crore.

For the full fiscal 2018-19, the GST collection target of the Centre and states was Rs 13.48 lakh crore.

Presenting the Interim Budget for 2019-20, Finance Minister Piyush Goyal said in spite of major rate reductions and relaxations, revenue trends are encouraging.

“The average monthly tax collection in the current year is Rs 97,100 crore per month as compared to Rs 89,700 crore per month in the first year,” Goyal said.

The state revenues, he said, are improving with guaranteed 14 percent annual revenue increase for the first five years from the implementation of GST.

The Goods and Services Tax (GST) was rolled out on July 1, 2017, and has consolidated 17 central and state levies.

Goyal added that GST has resulted in the increased tax base, higher collections, and ease of trade.

“This will reduce the interface between the taxpayer and the government for day-to-day operations and assessments. Now returns are fully online and e-way bill system is in place,” he said.

Goyal said with the introduction of GST, inter-state movement of goods has become faster, more efficient, and hassle-free with no entry tax, check posts, and truck queues.

The minister also said that the GST rate has been continuously reduced, providing relief of about Rs 80,000 crore annually to consumers.

Most items of daily use for the poor and middle class are now in the zero percent or 5 percent tax slab, he said.

“Our government wants the GST burden on home buyers to be reduced and accordingly we have moved the GST Council to appoint a group of ministers to examine and make recommendations in this regard at the earliest,” he added.

Further, he said more than 35 lakh small traders, manufacturers, and service providers will benefit from the trader-friendly measures.

“Soon, businesses comprising over 90 percent of GST payers will be allowed to file a quarterly return,” Goyal said.

GST collection stood at Rs 1.03 lakh crore in April, Rs 94,016 crore in May, Rs 95,610 crore in June, Rs 96,483 crore in July, Rs 93,960 crore in August, Rs 94,442 crore in September, Rs 1,00,710 crore in October, Rs 97,637 crore in November, Rs 94,725 crore in December 2018 and over Rs 1 lakh crore in January 2019.

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GST entry error proves costly to company

GST entry error proves costly to company

But High Court has stepped in to save a firm that was deprived of credit of nearly Rs 10 crore, by asking the nodal officer to decide on a correction

The High Court has directed a GST nodal officer to consider the corrections sought by a company which had made a mistake while filing a GST form. This had led to the deprivation of credit to the tune of nearly Rs 10 crore. The company said it was a bonafide error which should be corrected.

Pragati Automation Pvt Ltd approached the HC with a petition seeking direction to the GST authorities to permit it to correct an error in the GST Tran-1 form it had filed. Due to the “bonafide error which has crept in while filing the form,” the company was “deprived of the transitional credit of an amount of Rs 9,74,57,802 in their electronic credit ledger”.

Considering the problem on hand the HC noted, “It is the contention of the petitioner that after the GST regime has been implemented in India, the petitioner filed GST TRAN-I claiming the credit of Rs 9,74,57,802 in Column-5 of Table 5(a) of Form GST TRAN-1 well within the time prescribed by the statute. Revised Form GST Tran-1 was filed by the petitioner on 27.12.2017 after including the details of goods sent to job worker and held in stock on behalf of the principal manufacturer in terms of Section 141 of CGST Act credit pertaining to job work.

However, credit claim was indicated only in Column-5 of Table 5(a) but not in Column-6. The electronic credit ledger reflected the credit of Rs 5,89,346.”

The nodal officer is obligated to consider the complaint and take a decision in the matter.

–High Court

The company made several complaints to the GST nodal officer but these were not considered, forcing it to file the petition before the High Court. The HC said that the nodal officer is obligated to consider the complaint and take a decision in the matter. Since it was not done, the HC ordered the nodal officer “to consider the complaint/representation made by the petitioner to the writ petition and take a decision in accordance with the law in an expedite manner.”

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 Source: Bangalore Mirror Bureau


CGST Amendment Act – Key changes in the GST made effective from 1 February 2019

CGST Amendment Act – Key changes in the GST made effective from 1 February 2019

  • Out-and-out sales and high sea sales outside the ambit of GST:Transactions, where goods are physically moved from a place outside India to another place outside India, without such goods entering the territory of India (known as out-and-out sales in trade parlance), have been declared neither as supply of goods nor supply of services under as Schedule III of the CGST Act. Transactions of high sea sales are also included under Schedule III.
  • Reverse charge on procurements from unregistered dealers:Rather than a blanket levy of tax on procurements from unregistered dealers under reverse charge mechanism, Section 9(4) has been amended to levy tax only on procurements by notified assessees. It remains to be seen which class of assessees will be notified for this purpose
  • Ambit of input tax credit widened:Section 17 of the CGST Act has been amended to expand the scope of input tax credit to include motor vehicles having a capacity of more than 13 persons. Credit on other motor cars is also available if they are used for the specified purposes. Further, credit on health insurance, outdoor catering, etc. will be available if such services are required to be provided to employees by the assessee in terms of any law for the time being in force (e.g. Factories Act, labor laws, etc.).
  • Multiple registrations in one State:Earlier, separate registrations could be obtained in one State only if the assessee had distinct ‘business verticals’ in that State. This concept has been done away with by amending Section 25 and now, assessees may choose to obtain separate registrations in the same State irrespective of whether they qualify as distinct business verticals or not.
  • Flexibility in issuing debit/credit notes:Earlier, the law, as well as the GSTN portal, accepted a single credit note or debit note against one invoice. However, assessees faced practical difficulties since certain debit/credit notes were to be issued against thousands of invoices. Section 34 has been amended to permit issuance of a single debit/credit note against multiple invoices. This will obviate the difficulty faced by assessees, especially in the cement, steel and automobile industries
  • Simplification of GST returns:The GST Council approved putting in place system of filing a single monthly return in place of the existing 3 monthly returns. However, the existing system of filing GSTR-3B and GSTR-1 will remain in place until such a time the new monthly return is notified. Section 43A has been inserted in the CGST Act to carry out this change. However, this provision will not take effect from 1 February 2019 but will come into force only when the new system of returns is ready
  • Order of set-off: Section 49 of the CGST Act, SGST input tax credit can be set off against IGST liability only if CGST input tax credit balance is insufficient for this purpose. Hence, the order of set-off of input tax credit is strictly laid down under the CGST Act itself. Further, SGST or CGST credit balance can be utilized against IGST liability only after IGST balance has been exhausted. Earlier, while the law was ambiguous on this point, the GSTN portal allowed set-off of SGST only after CGST balance was exhausted
  • Transitional credit to exclude cesses: Section 140 of the CGST Act has been retrospectively amended to exclude cesses such as Krishi Kalyan Cess. This issue was hotly debated with the AAR denying the benefit of such credit in Re Kansai Nerolac Paints Ltd. [2018-VIL-11-AAR]

  • Amendment in place of supply provisions: The place of supply of transactions of transportation of goods to a place outside India will be the destination of goods in terms of the amendment made to Section 13 of the Integrated Goods and Services Tax Act, 2017 (the IGST Act). Consequently, the Indian logistics firm will be able to take advantage of this provision to claim export benefits. Further, the place of supply in case of job work services has been excluded from the performance-based rule. Hence, job workers based in India will be able to claim export benefits

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GST, a game-changer reform for logistics sector

GST, a game-changer reform for logistics sector

It has been 15 months since the rollout of what is considered one of India’s biggest tax reforms — the Goods and Services Tax (GST). But, we are already witnessing a major positive transition in the logistics sector.

Outsourcing and the value addition in the logistics sector is set to take off post-GST. Considering the double-digit growth, the logistics market would exceed $250 billion in the next two years. As per a recent survey, the Indian logistics sector provides livelihood to 22 million-plus people, which is expected to be over 40 million by 2020. The high rate of growth in the next couple of years is expected largely due to the implementation of GST.

GST has replaced at least 7 indirect tax heads and has eliminated the need for warehouse hubs across States. Further, GST has eliminated check posts across the nation and thereby waiting time, leading to at least 12-15% reduction in the turnaround time of trucks.

Better utilization of assets like vehicles and warehouses will lead to efficiency and increased productivity thus lowering overall cost. This would considerably benefit the supply chain directly and India’s growth indirectly.

The manufacturing and other services sectors have now started planning their supply chains, bearing in mind fleet cost and fast delivery, rather than tax structure and compliance.

Competitive edge

Pre-GST, the Indian logistics sector was struggling to add value to customers, compared to global peers. Indian firms were seen as labor contractors or mere transporters, which denied them the benefits of being a part of the supply chain. But the equation has changed now.

Manufacturers are looking to optimize supply chains and are willing to outsource value-added planning to logistics players, who have invested in technology and operate with a focus on quality and compliance. These logistics players are seeing a positive shift in the mindset of their clients and are gaining momentum. Further, small transporters can also now work with third-party logistics (3PL) providers and expand their fleet. GST has aided this move at a faster clip.

Post GST, there is a marked improvement in the use of technology and digitization by logistics players. 3PL players can become real ‘differentiators’ as they embrace technology to enhance the visibility of load carried, turn-around time, vehicle utilization, improvement in loading/unloading time by removing congestion at the docks, and the like.

Equipped with technology and software for load design solutions, vehicle geo-tracking, inventory (order/part level) tracking and route optimization, 3PL players add more value to their customers’ supply chain.

Logistics costs have been one of the biggest stumbling blocks for Indian manufacturers eyeing exports. At about 13-14% of GDP, India’s logistics cost is high and compares with about 8% in advanced nations that have efficient systems. This despite the percentage of outsourcing being higher in developed markets.

The Centre has made clear its intention to bring down this cost to less than 10%, which would make Indian manufacturers globally relevant.

The Centre created a new division in the Commerce Ministry to deal with the integrated development of logistics and urged all stakeholders to bring to India relevant best practices to enhance efficiency in logistics.

This is a good move as logistics firms used to deal with six different ministries separately and each would require separate paperwork and formalities. It is a big sense of relief to note there will soon be a system where a single document would be accepted for multi-modal logistics within India.

India has moved from the 54th position in 2014 to 44th in 2018 in the World Bank’s Logistics Performance Index.

Infrastructure status

The much-awaited ‘infrastructure’ status to the sector was conferred in November 2017, which is helping the sector avail cheaper finance (2% lower) for its warehousing and cold storage needs.

This will bring in a lot more players with an integrated service approach that would again help Indian manufacturers. New investments in this sector is good news as it could create a lot more jobs in the near future.

Together, the implementation of GST and other reforms have already started bringing efficiencies into the supply chain of various firms. Digitization, asset utilization, and visibility enhancement are facilitating better value-added outsourcing to logistics firms.

The government, too, has realized that aspirations for economic growth, employment generation, manufacturing, and exports are all inextricably linked to the efficient management of logistics.

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Source: The Hindu
Author: T V Sundram Iyengar 
GST paid under a Wrong Head by Mistake can be Transferred to the Right Head: Kerala HC

GST paid under a Wrong Head by Mistake can be Transferred to the Right Head: Kerala HC

The Kerala High Court has directed the GST department to transfer the tax amount paid by the petitioner under a wrong head instead of another by mistake.

In the instant case, the goods transported by the petitioner was detained by the department and imposed tax and penalty on the same. To get the goods released, the petitioner agreed to pay the whole amount. However, the amount was paid under the head ‘SGST’ instead of ‘IGST.’

Before the High Court, the petitioners relied on Section 77 of the GST Act and also Rule 4(1) of the GST Refund Rules, 2017.

Section 77 provides for the refund of the tax paid mistakenly under one head instead of another. But Rule 4 speaks of adjustment. Where the amount of refund is completely adjusted against any outstanding demand under the Act, an order giving details of the adjustment is to be issued in Part A of FORM GST RFD-07. The petitioner’s counsel lays stress on this process of adjustment and asserts that the amount remitted under one head can be adjusted under another head, for the demand can be any amount under the Act.

Allowing the petition, Justice Dama Seshadri Naidu held that “Under these circumstances, I find no difficulty for the respondent officials to allow the petitioner’s request and get the amount transferred from the head ‘SGST’ to ‘IGST’. It may, as the Government Pleader has contended, take some time, but it is inequitable for the authorities to let the petitioner suffer on that count.”

“So I hold that the 2nd respondent will release the goods forthwith along with the vehicle and, then, ensure that the tax and penalty already stood remitted under the ‘SGST’ is transferred to the head ‘IGST’,” the Court said.

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Source: Tax Scan
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