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No pure GST on petrol, diesel; 28% tax plus VAT a possibility: Official

No pure GST on petrol, diesel; 28% tax plus VAT a possibility: Official

If petrol and diesel – the two fuels of mass consumption – were to be brought under the GST- PETROLGoods and Services Tax (GST) regime, they would be taxed at the peak slab of 28 per cent, along with the Value Added Tax (VAT) which would be imposed by the states.

A top government official, while speaking to news agency PTI, said the ‘28% GST + VAT’ module is being contemplated by the government to bring fuel under GST. Although this would negate the concept of single taxation – which was the prime rationale implementing GST – it would ensure the states would not incur losses.

 There is no pure GST on petrol and diesel anywhere in the world and so in India too it will have to be a combination of GST and VAT,” the official said.

With the imposition of VAT on top of GST, the fuel prices will hover at around the same rates at present even if they will be taxed under the GST module, claim experts.

At present, the tax on petrol and diesel is made up of the excise duty levied by the Centre, along with VAT imposed by states.

While the excise duty is kept fixed by the central government irrespective of the hovering prices, VAT is ad valorem — it is charged as a percentage of the fuel cost.

The incumbent excise rate on per litre of petrol and diesel is Rs 19.48 and Rs 15.33 respectively. Meanwhile, the VAT rate varies from state to state, with Mumbai imposing the highest – 39.12 per cent, whereas, Andaman & Nicobar charging the lowest at 6 per cent.

Experts have pointed out that the ad valorem nature of GST could further accelerate the fuel cost in case of crude oil facing an upward trend.

Source: PTI

GST returns filing: Compliance optimal now at 70%, says GST Network’s chief executive

GST returns filing: Compliance optimal now at 70%, says GST Network’s chief executive

With close to 70% of the 1.1 crore businesses registered for the goods and services tax (GST)GST-Return filing the returns by the deadline, the compliance level is now satisfactory, GST Network’s chief executive officer Prakash Kumar told FE, adding that the vexed issue of delays in refunds to exporters has also been fully resolved for those pay integrated GST and seek to get it back.

In the initial months since GST’s July 2017 launch, just a little over half of the registered taxpayers used to file returns (and pay tax) by the deadline (the 20th of the next month). While overall taxpayer base has expanded over months from around 64 lakh at the start, the number of monthly return-filers also has risen. According to Kumar, almost all taxpayers who have a tax liability are now filing the returns. “These numbers are in line with what we had in the VAT regime. Even in the case of income tax returns, there are 25 crore PANs but only over 6 crore people who actually file the returns,” he added.

Among exporters, those who pay integrated GST (IGST) and file refund applications with “the correct details” were getting the refunds in four to five working days, he added. The prospect of prompt refunds, he said, encouraged exporters to use the fully automated IGST route rather than the letter of undertaking route, which doesn’t involve tax payment but only refund of input tax credits. Exporters are eligible for refund of tax content in export goods as such such sales overseas are zero-rated.

“Refund process for claims filed since February has largely been smooth. We have been clearing refunds everyday and it has become relatively error-free,” Kumar said. Exporters have to declare the identical details to the customs department as well as to the IT backbone for GST refunds but failure to match details in earlier days had led to refunds getting stuck.

Also Read: Goods and Service Tax refunds to exporters top Rs 12,000 crore, only 40% payment left

However, Kumar added that the input tax credit (ITC) route for exporters still suffered from delays as it was not completely automated and tax officials were required to verify details before sanctioning refunds. Apart from exporters, ITC refunds are also claimed by businesses supplying GST-exempt goods and those dealing in goods with inverted duty structure.

“We had the software for even automated ITC refund but it would work only with GSTR-2 and 3 forms, which have remained suspended. Since there is no validation with GSTR-2 and 3, the time-consuming task of manual interference is required,” he said.

The Central Board of Indirect Taxes and Customs (CBIC) has had to undertake special refund drives — one in March and the other earlier this month — to ensure that refunds are cleared with manual intervention and checks. At the beginning of the second such drive, the government had said that Rs 14,000 crore of refund claims were stuck.

GSTN will start work on the new simplified return-filing system after the tax department moots the final draft (software modules related to appeals, investigation and assessment are currently being developed). Detailed returns are crucial for invoices-matching, which is integral to check tax evasion.

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Source :  Financial Express
How GST has widened tax-base; here are the details

How GST has widened tax-base; here are the details

The goods and services tax (GST), a single indirect tax regime whichGST refunds to exporters top Rs 12,000 crore, only 40% payment left was introduced in 2017, is still going through the transformative stage. The government has brought many changes in the GST structure to make it more convenient for taxpayers, said a Finance Ministry statement, adding that the availability of data helps make tax collections more effective. Here are the details:

  1.  Introduction of the GST has resulted in formalisation of the economy.
  2. The information flow would eventually augment not only the indirect tax collections but also direct tax collections.
  3. The Centre had earlier little data on small manufacturers and consumption as the excise was imposed only at the manufacturing stage. The states had little data on the activities of local firms outside their borders.
  4. There are early signs of tax base expansion, as between June and July 2017, 6.6 lakh new agents sought GST registration. The government said the tax base is likely to rise as the incentives for formalisation increase.
  5. The entire textile chain is now brought under tax net and land and real estate transactions have also been brought into the tax net to facilitate the taxpayers and to extend the benefit to the customers, the statement added.

Also Read: GST leads to formalisation of an economy, widening of tax base, says govt

Source: Zee Business
GST refunds to exporters top Rs 12,000 crore, only 40% payment left

GST refunds to exporters top Rs 12,000 crore, only 40% payment left

The second round of the dedicated period for clearing refund overdue of exporters under the Goods and Services Tax (GST) regime may have seen Rs 12,000 crore settled by the government.

Ganesh Kumar Gupta, president of Federation of Indian Exporters Organisation (FIEO), told DNA Money that the exporters’ body has estimated that around Rs 12,000 crore of the Rs 20,000 crore pending refund had been cleared in the second round of refund fortnight – May 31 to June 14 – which was extended by two days to June 16. This works out to 60% of the exporters’ refund overdue.

“Close to Rs 12,000 crore refund of exporters out of the Rs 20,000 crore has beenGST refunds to exporters top Rs 12,000 crore, only 40% payment left settled during this period. This is a good number because in April they (government) refunded Rs 1,000 crore. In May, they refunded, according to government estimates, around Rs 8,000 crore. So, if they have refunded around Rs 12,000 crore in 15 days (17 days), I would say it’s a very good number,” said the FIEO chief.

This is over 70% of the amount cleared during the refund fortnight of March. The Central Board of Indirect Taxes and Customs (CBIC) had cleared Rs 7,000 crore then. According to official data released recently by the government, GST refund sanctioned to exporters till now was Rs 30,000 crore.

Gupta said the FIEO would request the government for another refund fortnight; “we will ask them (government) for another refund fortnight”.

Vanaja Sarna, chairperson of CBIC – erstwhile Central Board of Excise and Customs (CBEC) – could not confirm FIEO’s figure as the tax authority was still in the process of collating the information collected by it.

“We will be putting out a press release tomorrow in which we will be giving the details. The refund fortnight has just finished on Saturday and we are collecting information from our field. I don’t want to put out any wrong figure,” she said.

Also Read: GST leads to formalisation of an economy, widening of tax base, says govt

Asked if CBIC’s number could be anywhere closer to the FIEO’s, she did not want to make a guess; “I can’t really tell you because I am looking at IGST (interstate GST) and ITC (input tax credit) refund. In ITC, I am looking at Centre and state numbers, so I have to have complete figures from states before I give it. Let it come and you will know tomorrow,” said the CBIC head.

Interestingly, there is a controversy over the amount of pending export refund. The government maintains it is around Rs 14,000 crore while the FIEO claims it was close to Rs 20,000 crore.

Amit Mitra, West Bengal finance minister and former chairman of the empowered committee on GST, on Monday put the number at around Rs 25,000 crore.

Despite the piling up backlog of exporters’ refund, Gupta appreciated the effort put in by the commissionerate of CBIC in trying to settle as much refund as possible during the 17-day period.

“All the commissionerate co-operated in clearing the refund backlog. The bureaucracy has really done a good job. I should not always crib. I should not always criticise. If there is something good, I must say that also. The bureaucracy really co-operated in resolving the issues and problems of exporters,” he said.

The FIEO functionary, however, felt that some snags in the export refunding process at the state level still remained; “there is still some problem at the state level. Many states have not trained their field formation officers properly. These are states like Bihar, Jharkhand, Chhattisgarh, Madhya Pradesh (MP) and others. These states continue to have teething problems and glitches in refunding exporters”.

M S Mani, partner, Deloitte India, also said that “process-related impediments” continued to delay the refunds.

“While there has been some progress in sanctioning exporters’ refund claims, many process-related impediments continue to delay the refunds. Businesses would expect the timelines suggested at the time of introduction of GST to become a reality, now that we are a year ahead,” he said.

MONEY BACK

  • The government says the refund claims are Rs 14,000 crore while the FIEO claims it was close to Rs 20,000 crore
  • According to official data by the government, GST refund sanctioned to exporters till now was Rs 30,000 crore

Rs 20,000-crore – pending refunds, according to FIEO

Rs 7,000 crore – Refunds by CBIC

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Source: DNA India
GST leads to formalisation of economy, widening of tax base, says govt

GST leads to formalisation of economy, widening of tax base, says govt

Under the GST regime, there will be now seamless flow of  availability of common set of data to both the Centre and the states, making direct and indirect tax collections more effective, the government said. GST Collection: Govt collects Rs 65,000 cr GSTIntroduction of the Goods and Service Tax (GST) has resulted in formalisation of the economy, it said. The statement added that the information flow would eventually augment not only the indirect tax collections but also direct tax collections. In the past, the Centre had little data on small manufacturers and consumption because the excise was imposed only at the manufacturing stage while the states had little data on the activities of local firms outside their borders, it said.

There are early signs of tax base expansion.  Between June and July 2017, 6.6 lakh new agents, previously outside the tax net, sought GST registration, it said. This is expected to rise consistently as the incentives for formalisation increase. The entire textile chain is now brought under tax net. Further, a segment of land and real estate transactions has also been brought into tax net “works contracts, a statement issued by the Finance Ministry said.

“This in turn would allow for greater transparency and formalisation of cement, steel and other sales which earlier used to be outside the tax net. The formalisation will occur because builder will need documentation of these input purchases to claim tax credit,” it said. “The introduction of GST is the biggest reform measure which is already creating more jobs in formal sector and eliminating transactions which are not recorded earlier in the books of accounts and thus were outside the tax net so far.”

Also Read-  GST: Delhi raises e-way bill threshold

GST is designed to bring about better tax compliance and transparency in tax system, making difficult for those who are liable to pay tax to remain outside tax net, it said. A number of procedural changes have also been made since the roll-out of GST on July 1, 2017 in order to simplify the processes. An extensive exercise was undertaken for taxpayers education and facilitation by way of knowledge sharing, dissemination of information and replies to FAQs among others.

Further, steps are also being undertaken for further simplification in order to facilitate the tax payers and to extend benefit to the customers, the statement added.

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Source: Zee business
FinMin Introduce Annual GST Return Forms in Next Council Meet

FinMin Introduce Annual GST Return Forms in Next Council Meet

The finance ministry is drafting an annual return form for the filing of the Goods and Services Tax that will be brought upon in the upcoming GST Council meet.

This will help the revenue department collect additional FinMin Introduce Annual GST Return Forms in Next Council Meetdata from taxpayers. Sources in the finance ministry informed the form has to be filed additionally along with the existing monthly GSTR-3B.

This comes after finance ministry complained of not enough information being shared by taxpayers in the monthly GSTR forms. The new annual form will seek all business details to help the government maintain the invoice-wise database.

The return form will help the government with invoice matching thus aiding in cross-checking returns to avoid tax evasion. The form will also be useful in checking any wrong claims of credit and refunds.

According to media reports, the council is also likely to take up the possible inclusion of natural gas in the indirect tax regime during its next meeting.

Recommended: How to change or update e-mail, phone number in GST system

“Petroleum is a considerably larger source for revenues not only for [the] Centre but states also and on [the] natural gas front, there is some consensus for bringing it into GST ambit and therefore, it could be the first petroleum product that could come within the GSTN,” Dheeraj Rastogi, Joint Secretary, GST Council, said while addressing a PHD Chambers of Commerce and Industry event.

“[We are] going to propose the inclusion of natural gas within the GST purview on an experimental basis in the forthcoming GST Council meeting,” Rastogi added, saying that this could be soon followed by the inclusion of aviation turbine fuel (ATF).

He, however, did not specify the tax bracket for natural gas if it was included in GST.

Currently, petroleum crude, motor spirit (petrol), high-speed diesel, natural gas, and ATF have been kept out of GST. However, several officials, including Petroleum Minister Dharmendra Pradhan and Indian Oil Corporation chairman Sanjiv Singh, had repeatedly said that petroleum products and natural gas should be brought under the unified indirect tax regime.

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Source: ET
Anti-profiteering body in talks with FMCG companies over GST fee cut benefits

Anti-profiteering body in talks with FMCG companies over GST fee cut benefits

The National Anti-Profiteering Authority is calling large fast-moving consumer goods companies to understand if last November’s GST rate cut benefits were passed on to consumers.

Only two FMCG companies, Hindustan Unilever and Nestle, Anti-profiteering body in talks with FMCG companies over GST fee cut benefitshave approached the quasi-judicial body voluntarily. The GST benefits include both rate cuts and input tax credit available. The GST Council had reduced rates for over 200 items of common use on November 10 and the changes came into effect from November 15.

The authority has held hour-long meetings with Reckitt Benckiser, Godrej, P&G, Nirma and Marico among a dozen companies at its Delhi office to understand if they had passed on benefits to consumers and to what extent. Meetings with more companies have been planned. “We are holding informal discussions with firms for their feedback on the GST and to understand if they have passed on entire benefit to consumers,” an official said.

In case the authority is not satisfied with a company’s computation, it may ask GST commissioners to file an anti-profiteering complaint.

The industry is, however, concerned over the lack of clear profiteering guidelines. Also there is no formula to calculate the benefits due.

According to sources, the majority of the FMCG companies that the authority has met so far have failed to agree with it over the quantum of benefits that remains due. The companies blame large inventories based on an older pricing formula for their failure to pass on all the benefits.

Marico and Reckitt Benckiser said they were not in a position to comment at the moment. Queries sent to Nirma, P&G and Godrej remained unanswered.

“Scrutiny of the cost structures of FMCG companies without an approved common methodology to determine whether the benefits were passed on will be a difficult task, “ said M S Mani, partner, Deloitte India. In many cases, stock with trade on the transition date would be difficult to determine from a profiteering perspective, he added.

“Since these meetings could lead to a formal enquiry, industry needs to be prepared with adequate documentation,” said Pratik Jain, partner, PwC India. He added it was important for the authorities to understand industry’s concerns, as no guidelines had been issued by the government on compliance. “One will not be surprised if these meetings extend beyond the FMCG sector in the next few days,” Jain said.

Also Read: How to change or update e-mail, phone number in GST system

An ITC spokesperson said, “We have passed on the benefits of the GST rate cuts to customers and this has been communicated to the relevant authorities.’ The spokesperson declined to elaborate.

The two factors mentioned in the statutory provisions cannot determine profiteering and hence other factors such as the incremental cost of doing business need to be looked into, according to Abhishek A Rastogi, the partner at law firm Khaitan & Co.

Hindustan Unilever and Nestle have offered to pay the profiteered amount. Hindustan Unilever calculated a profiteered amount of Rs 1.60 billion and offered it to the government. Nestle is assessing the final amount. Hindustan Unilever is yet to deposit the money with the government as it awaits instructions related to bank account details.

The anti-profiteering mechanism is a three-stage process. There is a state-level screening committee for local complaints and a standing committee for national-level complaints; then, investigation by the Directorate General of Safeguards and a probe by the National Anti-Profiteering Authority.

The authority is chaired by BN Sharma, is assisted by four officials of the rank of joint secretary and above.

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Source :  Business Standard
How to change or update e-mail, phone number in GST system

How to change or update e-mail, phone number in GST system

The government has introduced a new system to allow taxpayers to update email and mobile number in the GST GST PortalSystem. This was introduced as many have complained that “the intermediaries who were authorized by them to apply for registration on their behalf had used their own email and mobile number during the process”, the Finance Ministry said in a press release today.

The email and mobile number can be updated by the concerned Jurisdictional tax authority of the taxpayer as per the following procedure:

  • The taxpayer is required to approach the concerned jurisdictional Tax Officer to get the password for the GSTIN allotted to the business.
  • Jurisdiction can be checked through Search Taxpayer option available on https://www.gst.gov.in,. Allotted jurisdiction is displayed in red text
  • The taxpayer would be required to provide valid documents to the tax officer as proof of his/her identity and to validate the business details related to his GSTIN.
  • Tax officer will check if the said person is added as a Stakeholder or Authorized Signatory for that GSTIN in the system.
  • Tax officer will upload necessary proof on the GST Portal in support to authenticate the activity.
  • Tax officer will enter the new email address and mobile phone number provided by the Taxpayer.
  • After upload of the document, Tax officer will reset the password for the GSTIN in the system.
  • Username and Temporary password reset will be communicated to the email address as entered by the Tax Officer.
  • The taxpayer needs to login on GST Portal https://www.gst.gov.in/ using the First time login link.
  • After first time login with the Username and Temporary password that was emailed to him, system would prompt the taxpayer to change username and password. The said username and password can now be used by the taxpayer.
Source: The Economic Times
GST refund drive extended till june 16

GST refund drive extended till june 16

The government on Tuesday extended the special fortnight-long drive to process pending GST (Goods and Services Tax) refunds by two more days till June 16. GST RefundIt said that refunds worth over Rs. 7,500 crore were already sanctioned as a part of this drive till now compared to Rs. 5,350 crore sanctioned in the earlier drive which lasted from March 15 to 29.

“In view of overwhelming response from exporters and pending claims, the period of refund fortnight is being extended by two more days, that is up to June 16,” an official statement said.

The government had last month announced the fortnight-long drive from May 31 to June 14.

In March, the government had launched a similar exercise to process the pending GST refunds on account of exports. However this time, the drive is to facilitate all types of refund claims received till April 30.

“This will include refunds of IGST paid on exports, refunds of unutilized input tax credit and all other GST refunds,” the Finance Ministry had said in a statement when the drive was launched.

Source: PTI
Commerce Ministry working on mechanism to refund taxes paid by exporters under GST

Commerce Ministry working on mechanism to refund taxes paid by exporters under GST

The Commerce Ministry is trying to find a mechanism to refund taxes, including embedded ones, that are still being paid by exporters after the implementation of the Goods & Services Tax (GST) regime.

“Such payments to exporters would not only make exports more competitive but would also gst- commerce minbe allowed under the World Trade Organisation (WTO) regime where questions are being raised on India’s export subsidies,” a government official told BusinessLine.

“The taxes that are not getting refunded under GST and which exporters are continuing to pay include electricity duty, VAT on petroleum goods, mandi tax, stamp duty and many embedded taxes. If a mechanism is found to refund these taxes, it could amount to substantial relief,” the official said.

According to the Apparel Export Promotion Council, embedded taxes for the garment sector, which include the levies on cotton, electricity, and input tax credit restrictions for man-made fibres which is purchased from unregistered dealers, put an additional burden of about 4-5 per cent on the industry.

An informal committee set up by the Commerce Ministry to find alternative ways to compensate exporters once the WTO-incompatible export incentive schemes are withdrawn is closely examining how exporters could be compensated for the non-refunded taxes. The committee, headed by the Directorate-General of Foreign Trade and comprising representatives from the industry and think-tanks, is also studying experiences of other countries.

Review of taxes

Interestingly, the latest Economic Survey suggested that the GST Council should conduct a comprehensive review of embedded taxes arising from products left outside the GST (petroleum and electricity) and those that arise from the GST itself. The latter, for example, could include input tax credits that get blocked because of “tax inversion,” whereby taxes further back in the chain are greater than those up the chain. “This review should lead to an expeditious elimination of these embedded export taxes, which could provide an important boost to India’s manufacturing exports,” the Survey said.

Many exporters are suffering from a credit crunch in the GST regime as the mechanism for refund of taxes is not yet robust. Although the Finance Ministry is trying to clear the back-log by organising fortnightly clearance camps, a substantial amount is still pending.

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Sourec: BusinessLine