Browsed by
Category: GST News

More rate cuts likely at GST Council meet on September 28

More rate cuts likely at GST Council meet on September 28

A dip in revenues notwithstanding, the GST Council may decide to cut rates on more items this week toMore rate cuts likely at GST Council meet on September 28 keep the consumption story going which typically slows in an election year despite a rise in government spending.

The 30th meeting of the GST Council will be held on Friday, September 28.Finance Minister Arun Jaitley, who will chair the meeting through video-conferencing, is expected to announce a further pruning of the peak 28% rate structure. Jaitley has prom…

Goods expected to see their way out of the 28% tax bracket include cement, certain automobile parts, digital cameras and certain categories of television sets, sources close to the development told DH. These may be placed under 18% or 12% slabs.

Cement is the only item of construction which remains under the 28% slab. Its removal from the highest bracket makes sense as construction activity, which slows during monsoon, is expected to pick up from next month.

After all, Jaitley believes GST has given a lot of purchasing power to consumers.

“There is no better opportunity for consumers to make purchases than in the environment which the GST has created. It is an opportunity to celebrate the biggest tax reform since Independence,” the minister said recently.

In the last last 14 months since GST was implemented, the council has slashed rates on 191 items from the 28% category. Originally, it consisted of 226 goods.

Apart from cement and automobile parts, tyres, automobile equipment, motor vehicles, yachts, aircraft, aerated drinks, betting and demerit items like tobacco, cigarette and pan masala remain in the 28% slab.

Even though the Centre has suffered a loss of about Rs 70,000 crore on account of reduction in tax on goods and services, the move has reduced the cost to consumers, increased purchasing capacity and added to the economy, Jaitley said.

The budgetary estimates of GST collections were more than Rs 1 lakh crore per month but the revenues have not met the target barring in April when collections topped Rs 1 lakh crore. However, the finance minister expects that the forthcoming festive season will give a boost to GST revenues.

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

Source :  Deccan Herald
30th GST Council Meeting Date Announced Will Be Held On 28 September

30th GST Council Meeting Date Announced Will Be Held On 28 September

The 30th Good and Services Tax (GST) Council meeting will be held on September 28 via video conferencing, in which the proposal to cut rates on some items could be taken up. The GST Council may cut tax rates on cement, air conditioner and large screen televisions.

30th GST Council Meet

The GST Council had reduced tax rates on over 100 items in its July meeting including refrigerators, small screen colour television, washing machines while leaving air conditioners, large screen TVs in the highest bracket of 28%.

The government has said that sooner or later only sin goods will be kept in the 28% GST bracket. However, further rate rationalisation decision will depend on revenue buoyancy.

It is also likely that Kerala Finance Minister Thomas Isaac will bring to the table the idea of levying cess for funding relief measures after the Kerala floods. On August 23, Thomas Issac had said that he would approach the GST Council for a cess to finance the relief efforts.

Moreover, the GST Council may also take up some of the issues discussed relating to the SMEs in the last meeting as well. The council had handed over the issues faced by the SME sector to a sub-committee, on the basis of which, the former will take decisions.

Experts are expecting the GST Council to address various issues being faced by the SMEs including the extension of some monetary sops and simplification of the procedure.

Finance Minister Arun Jaitley, who was on leave after his surgery, will chair the meeting first time after resuming office in August. The GST Council is comprised of the finance minister as the head and his state counterparts.

Source- Financial Express
Govt notifies rate at which tax is to be collected by E-Commerce operators under GST

Govt notifies rate at which tax is to be collected by E-Commerce operators under GST

Central Board of Indirect Taxes & Customs (CBIC) has issued a Notification No. 52/2018- Central Tax dated 20th September, 2018 to notify that every electronic commerce operator shall collect tax @ 0.5% (each under Central tax and State tax – to be notified separately by each State) of the net value on intra-state taxable supplies of goods and/or services.

Similarly, Notification No. 02/2018-Integrated Tax has been issued to notify that the electronic commerce operators shall collect tax at the rate of 1% as an integrated tax of the net value on inter-State taxable supplies.

Government notifies rate at which tax is to be collected by E-Commerce operators under GST.

Source: Central Board of Indirect Taxes & Customs
Easier tax refund regime for exporters in the works

Easier tax refund regime for exporters in the works

The government is examining the tax refund mechanism for exporters under goods and services tax (GST) Easier tax refund regime for exporters in the worksand may announce some measures over the next few days to streamline the process and speed up repayments. “Some measures are being looked at…,” a senior official told ET, adding that these could be unveiled by the weekend.

Exporters say delay in refund under GST impacts business and raises working capital cost. Last week, Finance Minister Arun Jaitley had said the government would take steps to boost exports.

The Central Board of Indirect Taxes and Customs (CBIC) has taken several steps to ease the process of refund for exporters, but some issues persist. It has had a detailed discussion with industry representatives on the issues faced by them in getting refunds seamless.

The government is now looking at all the procedures, as also execution issues at the central and state government levels, which are impacting exporters.

According to the official, it could consider some procedural relaxations to make tax refund seamless and easier. The restriction on inputs imported under some exemption notifications retrospectively is in focus, the official said, adding that the government could consider restricting refund of taxes only for those exports that use inputs under some exemption notification.

GST exemption notification

Industry representatives say challenges are more on account of state tax authorities lacking familiarity with some export schemes. State officers, they said, demand different set of documents and withhold refunds even after they have been sanctioned by the Centre. This is especially so in cases of services exports.

Sometimes refunds are rejected due to minor issues such as a change in the jurisdiction of officers. The jurisdiction office appearing on the GSTN portal may be different from the actual jurisdiction in the record of the department, and that sometimes leads to issues despite instructions from the CBIC that the issue should not hold up refunds.

The official said the government could look at providing a reconciliation mechanism for exporters to understand against which claims they have received the tax refund amount for integrated GST rebate claim.

Experts say the government must provide some new formulation to assuage exporters’ concern on refunds.

“Integrated GST refunds have streamlined largely except for internal container depots, but input tax credit refund still remains an issue,” said Ajay Sahai, director-general of Federation of Indian Export Organisations. “The government needs to address the situation expeditiously.”

Anita Rastogi, partner at PwC, said, “It is an expectation from the government to formulate a solution to eradicate the concern of businesses.

Ideally, the methodology may be prescribed where the restriction shall be applicable only on those outputs which are exported after using the inputs procured under the said notifications.”

Ease Your GST Retrun Filing & Invoice with XaTTaX- GST Software



Why the government must move fuel to GST

Why the government must move fuel to GST

Fuel prices have hit all-time highs. Petrol crossed Rs 80 a litre. Diesel hit new records too. Fuel prices are technically supposed to be market driven, linked to international crude prices and foreign exchange rates. Practically, they are not. Both central and state governments tax fuel; the rates have varied wildly over the years. Why the government must move fuel to GSTRounding off for simplicity, the Centre taxes petrol at Rs 20 a litre. State taxes vary, but say for Delhi, they are around Rs 17 a litre. Hence, taxes amount to Rs 37 a litre. Without these, petrol at pumps would cost only Rs 43 per litre. This implies a whopping 84% tax on petrol, way higher than even the high-end slab of GST (28%), the supposed catch-all tax for goods and services in the country.

While tax on fuel has always been high, the last few years have been exceptional. Four years ago, central tax on petrol was around Rs 9 per litre (vs Rs 20 now), while state taxes were Rs 14 a litre (vs Rs 17 now). If we simply went back to those levels, the current petrol price would be just Rs 63 per litre.

So what happened in the past four years? Well, crude oil prices fell. As per policy, pump prices should have dropped, reaching Rs 40 a litre. However, the government interfered and raised taxes, cleverly ensuring that final petrol prices at pumps remained unchanged. As a result, you the consumer lost the benefit of lower crude prices. The consumers didn’t notice. Maybe they were just happy the prices didn’t rise. The government, meanwhile, had a windfall as fuel-related revenues doubled. Rough estimates suggest the Centre now makes around Rs 3 lakh crore from taxes on petrol products, and the states another Rs 2 lakh crore. To put it in perspective, the entire Union budget is around Rs 24 lakh crore, making fuel taxes a nice chunk of the government’s income.

Now, depending on whose side you are on, you may like or dislike this move. Some may say this was the only way the government could have fiscal discipline, which we never had in the past few decades. The extra money can be used to reduce our debt and increase welfare schemes. Detractors will say the fuel tax increase was a ploy to gouge more out of the middle class, which is fleeced at any given chance. Of course, all these discussions should have happened a few years ago when tax rates were changed, but somehow it didn’t attract much notice then. Until now, when the low crude oil price party has ended.

Crude prices shot up again. The rupee fell. Now, the taxes raised a few years ago seem like a huge burden on the consumer. The opposition took the issue head on, striking a chord with the middle class. Whether the BJP government will buckle or not remains to be seen. So far they haven’t. Maybe they think the angst people feel is temporary — either crude prices will fall again or people will just accept the hike and move on.

However, to think record fuel prices will have no political cost would be a mistake. Almost every political party takes the middle class for granted. Robin Hood style, they take from the middle class and pass it on as welfare schemes to the poor. By doing this, they hope to win more votes than the people they upset. However, fuel prices matter to all Indians now more than ever before. The jump in prices not only affects affluent voters with big vehicles, but also those with bikes. It also eventually causes inflation, which directly affects the poor. Taxation has its limits, and when an essential commodity like fuel is taxed at 84%, people do see it as unfair.

Also Read : Why GST on petrol and diesel prices may not lower fuel prices

The ideal solution is to bring fuel under GST, anyway the right thing to do if you go by the spirit of GST as a universal indirect tax. If fuel moves to GST, petrol prices will be a mere Rs 55 a litre at current prices. Imagine the joy it would give to millions. Imagine the love GST would get, and the boost it would give to the economy.

Of course, a reduction in fuel taxes from 84% to 28% will mean a big hit to government revenue — of around Rs 2-3 lakh crore, or 10-15% of its spending. However, the government could, and should, have more creative ways to raise money — higher disinvestment, land sales, growing GDP faster and widening the tax net, for instance. Scaling back expenses and pulling out of schemes that don’t work can also help cover some of the shortfall. Finally, while deficit control is always important, sometimes it is important to let go. Loosen the purse strings when people are suffering too much.

The long-term solution, and something that could have prevented all this, is to consider fuel hedging, or locking in future purchase prices when crude prices are low.

Lowering fuel taxes is a chance for the government to give relief to the consumer, make the GST more comprehensive and take the arbitrariness out of taxation. While it won’t be easy to bridge the revenue gap, it’s about time we found more innovative ways to raise money than just taxing the middle class some more.

Ease Your GST Retrun Filing & Invoice with XaTTaX- GST Software


Alert! TDS, TCS under GST next month; Know what is the difference

Alert! TDS, TCS under GST next month; Know what is the difference

Surprising industries, the government has now taken one step ahead in its Goods and Services Tax (GST) drive. TDS and TCS under GSTIt has brought in section 51, which is about tax deducted at source (TDS) and section 52 about tax collection at source (TCS) under the regime. The government has kept October 01, to implement this new provision under the GST law. This new development is expected to make it mandatory for e-commerce companies in collecting taxes at the source and also to help in tracking down sellers on platforms like Amazon and Flipkart. Further, it will also give a boost to government companies in deducting GST at a specified rate. Both TDS and TCS were kept in abeyance as the government wanted their newly GST which was launched on July 01, 2017, to settle down.

Now that less than two weeks are left, let us understand about what is TDS and TCS.


Who is required to deduct TDS? 

  • a department or establishment of the Central Government or State Government
  • local authority
  • Governmental agencies
  • such persons or category of persons as may be notified, by the Central or a State Government on the recommendations of the Council

When is it required to be deducted? 

Where the total value of supply under a contract exceeds Rs 2,50,000 then a supplier of taxable goods or services is liable to deduct TDS. The rate at which TDS can be deducted is set at 2% under GST.

It needs to be noted that, TDS deductors, whether or not separately registered, are required to compulsorily register in GST irrespective of threshold limits.

TDS certificate

A deductor must furnish to the deductee a certificate in Form GSTR-7A (made electronically available), within 5 days of crediting the amount so deducted to Government, mentioning details like contract value, the rate of deduction, the amount deducted and an amount paid to the Government.

Amount of TDS shall be paid to the Government by the deductor within 10 days after the end of the month in which such deduction is made.

As for the deductee can claim credit, in his electronic cash ledger, of the tax deducted and reflected in the return of the deductor furnished under Section 39(3).

The due date for filing GSTR-7 is on 10th of the following month.


Who is required to collect? 

Every electronic commerce operator (“operator”), who is not an agent, is eligible to collect TCS at the prescribed rate when taxable supplies are made through it by other suppliers and the consideration with respect to such supplies is to be collected by the operator.

Companies like Amazon, Flipkart, Jabong, Snapdeal, Shopclues, etc. are the ones operating in India. As per the law, it is compulsory for every e-commerce operator register in GST irrespective of threshold limits. Further, it is mandatory for every person who supplies goods/services through an e-commerce operator to get registered under GST.

The rate of TCS is levied at 1% under CSGT, 1% under SGST and 2% under IGST.

An operator must pay the amount of TCS to the government within 10 days after the end of the month in which such collection is made.

Furthermore, the operator is required to furnish a monthly statement in Form GSTR-8 by the 10th of the following month. Not only this, they are also required to file an Annual statement in Form GSTR-9B by the 31st of December following the end of every financial year.

Every tax collected by the operator must be credited to the cash ledger of the supplier who has supplied the goods/services through the operator. Later the supplier can claim credit of the tax collected and reflected in the return by the Operator in his [supplier’s] electronic cash ledger.

Ease Your GST Retrun Filing & Invoice with XaTTaX- GST Software

Source: Zee Business
CGST Commissionerate ready to open more return-filing centres

CGST Commissionerate ready to open more return-filing centres

The first CGST tax return facility was rolled out in partnership with the CGST Commissionerate ready to open more return-filing centreswestern regional council of the Institute of Chartered Accountants.

Despite the poor response to the first free return filing facility put up by the tax department in the city, the CGST Commissionerate is ready to open more such centres to help better tax compliance and timely filing, a senior official said on Friday.

As the GST filing still remains cumbersome for a vast majority of taxpayers, the Central GST Commissionerate of the Mumbai East Zone, which is one the largest in the country, has launched a free return filing centre at the Parel area of the city in April but has not met with the desired response.

“Our initial planning was to open 30-50 centres across the city. But we didn’t get a good response to the first centre and so we haven’t decided to expand it. But if we get a request from any taxpayer community then we will go for it. We are ready to open it anywhere,” CGST commissioner for Mumbai East, Vijay Risi said.

Risi was talking to the press after launching the commissioner’s first Hindi magazine ‘Kanheri’ which aims to address the grievances/queries of taxpayers.

“We want to use this magazine for nut just for articles but also to publish some technical information that will be useful to all taxpayers. Next editions will have taxpayers involved as well. They can also interact with us for queries or suggestions on refunds or assistance,” Risi said.

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

Source: Money Control
Streamlining of GST compliance fast becoming a long row to hoe

Streamlining of GST compliance fast becoming a long row to hoe

A slew of contradictory advance rulings by the various tax benches has made GST compliancethe already complicated world ofgoods and services tax (GST) more complex.

A bunch of varied interpretations of the GST law by different Authorities for Advance Ruling (AAR) on the same subject is the latest addition to compliance challenges for businesses. For instance, recently, the Maharashtra AAR said that the process of installing solar equipment would attract 18% GST, while the Karnataka bench ruled that a 5% rate would apply.

In another matter on taxing printed advertisement materials, the Telangana AAR and West Bengal AAR not only gave conflicting verdicts, but also used different methodologies to arrive at their conclusions. That litigation would escalate in the GST-era was already anticipated. However, the pace at which applications are being filed is alarming, considering that it has only been 15 months since GST has been implemented.

The latest report issued by the GST Council, on applications received and rulings passed by the states authorities for the advance ruling (AAR) revealed that 363 applications have been filed so far across India.

Of that, 224 applications were yet to be decided as on June 2018.

GST Council Report

As the chart alongside shows, Maharashtra tops the list with 68 applications, followed by Karnataka, Gujarat, Delhi and Tamil Nadu. Tax experts foresee this number rising in the months to come. Although there have been reports that the government may consider setting up either a centralized authority or four regional authorities, there is no clarity on the timeline as yet.

While setting-up of a National Appellate Authority is the need of the hour, what also needs to be taken care of is that there is a judicious mix of people from the revenue department and law officials for a balanced judgement, tax experts said. Here, the government needs to take a leaf out of the advance ruling system practised in the excise/sales tax regime, where the decisions given were fairly reasonable, they add.

A delay in sorting out this issue would result in further increase in the compliance cost for businesses and hamper the ease of doing business in the country—a key feature widely tom-tommed when introducing GST.

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

Source : Livemint
22.5 crore e-way bills generated since rollout: GSTN

22.5 crore e-way bills generated since rollout: GSTN

Around 22.5 crore e-way bills have been generated across India till September 13 since the 22.5 crore e-way bills generated since rollout: GSTNnew electronic billing system was introduced on April 1, the Goods and Services Tax Network (GSTN) said on Friday.

It added that July 31 accounted for the highest 21.77 lakh e-way bills generated in a single day.

The e-way bill system kicked off as part of the new GST regime for transporting goods worth more than Rs 50,000.

“Between April 1 and September 13, a total of 22.48 crore e-way bills have been generated. Of these, inter-state transport of goods accounted for 10.89 crore bills while intra-state transport contributed another 11.58 crore,” the GSTN said in a statement.

“The share of intra- and inter-state transport is gradually attaining parity and is expected to reach 50:50 ratio in coming months,” it said.

The GSTN added that over 24 lakh taxpayers and 30,000 transporters had registered with the e-way billing system so far.

“While the average daily generation of bills was roughly 13 lakh in the early months of implementation, now around 15.79 lakhs bills are being generated seamlessly every day,” GSTN CEO Prakash Kumar was quoted as saying.

At 3.13 crore, Maharashtra generated the highest number of bills, followed by Gujarat (2.45 crore), Haryana (2.05 crore), Karnataka (1.98 crore) and Uttar Pradesh (1.90 crore).

Ease Your GST Retrun Filing & Invoice with XaTTaX- GST Software

Source: PTI
Taxpayer with turnover over Rs 2 cr need GST audit certificate, will be arduous job for auditors

Taxpayer with turnover over Rs 2 cr need GST audit certificate, will be arduous job for auditors

The Government on Thursday notified the GSTR-9C form for annual GST audit under which every taxpayer above GST - GSTR9C auditRs 2 crore turnover in a financial year would need to fill up a reconciliation statement and also obtain a certification of audit.

Under GST, annual return is to be furnished in GSTR-9 (recently notified on September 4, 2018). In addition, as per Section 35 of CGST Act, 2017, every tax payer whose turnover exceeds Rs 2 crore during a financial year, is required to submit audited annual accounts and a reconciliation statement in GSTR-9C.

The Government on Thursday through the notification No. 49/ 2018 – Central tax dated September 13, 2018 has notified the format for GSTR-9C.

GSTR-9C – Design

A look at GSTR-9C makes it clear that it is essentially a reconciliation statement for reconciling turnover, input tax credits and tax payments reported in GST returns (annual return) vis-a-vis annual books of accounts.

GSTR-9C is broadly segregated into the following:

  1. Gross turnover (including taxable and non-taxable turnovers)
  2. Taxable turnover
  3. Tax liability and payments (rate-wise)
  4. Input tax credit availed

The reconciliation is to be accompanied with certification from the auditor (can be statutory auditor as well). Further, there is a separate table for auditor’s recommendation on additional liability to be discharged on account of non-reconciliation of turnover and input tax credit. The auditor may also recommend on erroneous refunds, outstanding demands etc.

There is a separate table for disclosing additional amount payable on account of the un-reconciled amount as per Sr. No. 1, 2, 3 and 4. Taxpayers should note that it appears that the said amount is to be paid in cash (and not credit).

“While the final Audit format appears less labyrinthine, undertaking five different reconciliations, providing recommendations on the additional liability and certifying whether correct books of accounts have been maintained is still going to be an arduous task for the GST Auditor,” says Harpreet Singh, Partner, Indirect taxes, KPMG.

Some points for consideration

The format prescribes indicative sub-heads under which the expenses are generally booked in the financials (like freight, purchases, imports, employee cost, repair & maintenance, capital goods etc.). Tax payer may add/ delete the sub-head as per relevancy and against these sub-heads, the amount of input tax credit as reported in financials is to be reconciled with annual return. However, this is a new requirement and could be challenging for most taxpayers.

Fortunately, the Government has prescribed 2 different certifications as part of GST Audit Format – one where reconciliation statement is drawn and audited by statutory audit and the other wherein it is drawn and audited by a person other than the statutory auditor.

“With the Audit format being released and 31st December 2018 deadline, it would be prudent on part of the dealers to quickly appoint their GST Auditor and initiate the pre-audit process by collating information and documents required for the purpose of Audit,” adds Singh

It would, however, be interesting to see if the auditors would be comfortable with the prescribed language for certifications and if any changes in the language would be allowed while certifying the reconciliation statement. At the moment, Part B provides the format of the certification.

Ease Your Retrun Filing & Invoice with XaTTaX

Sources: Economic Times