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

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

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

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

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

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

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


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Source: Taxscan
GST Annual Return And Audit: Complexities Galore

GST Annual Return And Audit: Complexities Galore

In less than 30 days from now, over 1.15 crore taxpayers will have to file the Goods and Services annual return and audit forms. Made available by the government in September this year, the forms require businesses to not only consolidate information that they have been filing in monthly returns but also reconcile it. Both the forms are fraught with complexities and given that many companies have only now engaged auditors, it would be near impossible to meet the Dec. 31 deadline, experts told BloombergQuint.

GST Annual Return: Surprises

The annual return Form 9 is essentially consolidation of information that taxpayers have been filing via summary return Form 3B and outward supplies Form GSTR 1. It requires consolidation of outward and inward supplies, input tax credit, tax paid, GST demands and refunds.

There are two key areas of concerns in Form 9: requirement of HSN Code for input side and bifurcation of input tax credit or ITC.

The HSN Code Problem:

HSN codes are prescribed by the government to classify goods and services. So far, a buyer while filing Form 3B and GSTR 1 didn’t have to mention the HSN codes of the inputs—i.e. goods bought from a vendor. But the annual return form requires them to do this classification. This is new information altogether that needs to be given and companies’ ERP systems are not geared to give input classifications, Jigar Doshi, an indirect tax partner at SKP Business Consulting, pointed out.

Ritesh Kanodia, a partner at Dhruva Advisors questioned the need for this data.

“The liability for a taxpayer arises only on account of HSN of goods and services he sells and their rate of tax. The HSN of the vendor is not his liability. He merely takes credit for what he has paid for the inputs. He is not going to get into the debate of what is the HSN of the inputs, the rate of tax on them, etc.”

Ritesh Kanodia, Partner, Dhruva Advisors

So there is no need for him to get into the HSN for inputs and many companies won’t even have this data, he said.

ITC Bifurcation Problem: 

The annual return requires a three-way split of ITC availed into inputs, input services, and capital goods credits, Doshi said. But in the reporting so far, there was no concept of ITC bifurcation, Kanodia added. He explained the issue by way of an illustration—let’s say, we purchase some machinery. That is a fixed asset. So the credit has been taken as capital goods. If I purchase some inputs, credit has been taken as that and similarly for input services. What has been reported in Form 3B so far is the total figure.

“This data is not appearing anywhere else. Credit is available to me, I can consume that credit. Capital goods—I can understand—because there are certain rules around capital goods. But why do I need this bifurcation for input and input service?”

Ritesh Kanodia, Partner, Dhruva Advisors

That’s another layer of complication which has been added in the annual return form, he said.

GST Audit: Complexities

The complexities in the annual return form pale in comparison to what the audit process entails, both the experts pointed out.

Divided in two parts, the GST Audit Form 9C needs to be filed by a taxpayer who has an aggregate annual turnover exceeding Rs 2 crore. It requires companies to reconcile turnover declared in the financial statement and annual return, tax liability and tax paid, input tax credit availed and reported. Any liability arising out of non-reconciliation also needs to be specified.

This form is trying to dissect the entire financial statement—P&L and balance sheet— and compare the numbers on the outward-inward side and the tax-paid side with the annual return numbers which have been disclosed, Doshi said.

The objective is to assess whether you’ve paid GST on transactions recorded in the books of accounts and, if not, then the explanation for it needs to be provided, Kanodia said. “Similarly, on the credit side, whatever credits you have taken, there is an entry in the books of accounts. That needs to be reconciled with the annual return. So, reconciling rupee to rupee with the books of account is the objective of this exercise,” he added.

And the complexities are many:

Unclear Time Period: The filing threshold is based on gross turnover in a financial year, Kanodia said, but GST came in July. “You have lot of adjustments which happen in any financial accounting—for instance, unbilled revenue. Do I consider the beginning of the financial year or the beginning of July? There are lot of adjustments which need to be seen,” he added.

State-Wise Audit: Doshi explained that GST Identification Number is the basis for the audit. If a taxpayer has branches in five states and each has a separate GSTIN, then five audits need to be done. This would require GSTIN-level bifurcation of audited financial statements which most companies do not maintain, he said.

Reconciliation Issues: GSTR 1, which is filed at the state level, will need to be reconciled with the income and sales ledger at the company P&L level which is not available state-wise and it’s likely that the consolidated figure of different states’ GSTR 1 may not match with the annual P&L, Kanodia explained. This could be due to accrual entries, IND-AS, out-of-scope GST supplies, etc, he added.

“This may entail a line-item level analysis to find out unreconciled line items and ascertain reasons of such mismatch, which is time consuming. Availability of data in the right format is critical to carry out such reconciliations.”


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Source: Bloomberg Quint
Government extends deadline for GST returns filing for taxpayers affected by cyclones

Government extends deadline for GST returns filing for taxpayers affected by cyclones

The government has extended the date for filing summary GST sales returns for October by a month to December 20 for taxpayers affected by cyclones in Andhra Pradesh and Tamil Nadu.

For taxpayers whose principal place of business is in the district of Srikakulam in Andhra Pradesh, the due date for filing GSTR-3B for the months of September and October has been extended till November 30, 2018.

Those taxpayers whose principal place of business is in the 11 specified districts of Tamil Nadu, the GSTR-3B for the month of October has to be filed by December 20.

“In view of the disturbances caused to daily life by Cyclone Titli in the district of Srikakulam, Andhra Pradesh, and by Cyclone Gaza in eleven districts of Tamil Nadu viz., Cuddalore, Thiruvarur, Puddukottai, Dindigul, Nagapattinam, Theni, Thanjavur, Sivagangai, Tiruchirappalli, Karur and Ramanathapuram, the competent authority has decided to extend the due dates for filing various GST returns,” a finance ministry statement said.
The last date for filing GSTR-3B for a month is the 20th day of the subsequent month.

Taxpayers having an aggregate turnover of more than Rs 1.5 crore and whose principal place of business is in the district of Srikakulam in Andhra Pradesh, final sales return or GSTR-1 for September and October has to filed by November 30.

The government has extended the date for filing summary GST sales returns for October by a month to December 20 for taxpayers affected by cyclones in Andhra Pradesh and Tamil Nadu.

For taxpayers whose principal place of business is in the district of Srikakulam in Andhra Pradesh, the due date for filing GSTR-3B for the months of September and October has been extended till November 30, 2018.

Those taxpayers whose principal place of business is in the 11 specified districts of Tamil Nadu, the GSTR-3B for the month of October has to be filed by December 20.

“In view of the disturbances caused to daily life by Cyclone Titli in the district of Srikakulam, Andhra Pradesh, and by Cyclone Gaza in eleven districts of Tamil Nadu viz., Cuddalore, Thiruvarur, Puddukottai, Dindigul, Nagapattinam, Theni, Thanjavur, Sivagangai, Tiruchirappalli, Karur and Ramanathapuram, the competent authority has decided to extend the due dates for filing various GST returns,” a finance ministry statement said.
The last date for filing GSTR-3B for a month is the 20th day of the subsequent month.

Taxpayers having an aggregate turnover of more than Rs 1.5 crore and whose principal place of business is in the district of Srikakulam in Andhra Pradesh, final sales return or GSTR-1 for September and October has to filed by November 30.

Taxpayers having an aggregate turnover of more than Rs 1.5 crore and whose principal place of business is in the 11 specified districts of Tamil Nadu, they can file GSTR-1 for October by October 20, 2018.

Taxpayers having aggregate turnover of up to Rs 1.5 crore and whose principal place of business is in the district of Srikakulam in Andhra Pradesh, GSTR-1 has to be filed by November 30.


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Source: Zee Business
Rs 29,088 cr indirect tax evasion detected during April-Oct.

Rs 29,088 cr indirect tax evasion detected during April-Oct.

The investigation arm of the Finance Ministry has detected tax evasion worth Rs 29,088 crore in 1,835 cases during April-October period of the current financial year, a senior official said Wednesday.

Of this, the Directorate General of GST Intelligence (DGGI), which is enforcement agency for checking indirect tax evasion, has detected evasion of goods and services tax (GST) worth Rs 4,562 crore in 571 cases.

However, the bulk of the evasion was detected in case of service tax. The total number of cases where service tax was evaded stood at 1,145 involving Rs 22,973 crore.

In the case of central excise duty, the DGGI detected 119 cases where tax evaded was worth Rs 1,553 crore.

“DGGI officers have detected total indirect tax evasion of Rs 29,088 crore during April-October,” the official told PTI.

He further said that the total amount of detection was likely to be more as the data does not include detection by field offices of the Central Board of Indirect Taxes and Customs (CBIC)

On recovery of evaded taxes, the official said that a total amount of Rs 5,427 crore was realised during the seven-month period till October.

These, he added, includes recovery from previous cases and those detected during the current financial year.

Of the total recovery, Rs 3,124 crore was from GST evaders, followed by Rs 2,174 crore in case of service tax, and Rs 128 crore from those who had evaded central excise.

The larger chunk of recovery during April-October in GST, the official said, can be attributed to the decision of the CBIC to tighten on evaders.

With a view to focus on checking evasion, the apex indirect tax body had in September set up the Office of Commissioner GST (Investigation), headed by Neeraj Prasad.

Last month, the Finance Ministry had extended the informant reward scheme of central excise and service tax to GST. The scheme was modified to include officers of other government agencies like police, BSF, CISF and coast guard.

As per the reward scheme, informers and government servants were eligible for reward up to 20 per cent of the net sale proceeds of the contraband goods seized and/or amount of duty/ service tax evaded plus amount of penalty levied and recovered.

With respect to cases of detection of drawback frauds or abuse of duty exemption schemes under various Export Promotion Schemes, the informers are eligible for reward up to 20 per cent of recovery of drawback claimed fraudulently and/or recovery of duties evaded.

GST, which subsumed 17 local taxes like excise and service tax, was rolled out on July 1, 2017. In the run up to launch of the new indirect tax regime GST, the ministry had renamed the Directorate General of Central Excise Intelligence (DGCEI), mandated to check service tax and central excise duty evasion, as DGGGI.

 


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Sources: Economic Times.India Times

 

Government Now Owns GST Network

Government Now Owns GST Network

With the onset of the new single uniform tax process which has subsumed a number of previous multiple tax regimes including excise duty, additional excise duty, service tax, value added tax, sales tax, octroi, luxury tax, etc. Goods and Services Tax (hereinafter referred to as “GST”) is a single tax on the supply of goods and services. It is essentially a tax only on value addition at each stage. The final consumer will thus bear only the GST charged by the last dealer in the supply chain, with setoff benefits at all the previous stages.

Dual system of GST allows imposition of levies on goods and services. The collection of GST by Centre is covered under Central Goods and Services Tax (hereinafter referred to as “CGST”), while the States levy and collect the tax in accordance to the State Goods and Services Tax (hereinafter referred to as “SGST”).

The GST Network

GST Network (hereinafter referred to as “GSTN”) is a not for profit company established under the provisions of the Companies Act, 2013. It has been set up primarily to provide information technology infrastructure and services to the Central and State Governments, tax payers and other stakeholders for implementation of the Goods and Services Tax (GST). With the objective of providing a user interface shared with the Government, GSTN works to capture, processing and exchange of information amongst the stakeholders with view to ensure effective enforcement of GST laws.

New approach…

Uptil now the ownership stakes GSTN has been non-Government private limited company whereunder Centre and the states together held 49% interests. However, the Government on September 26, 2018 cleared a proposal to convert GSTN into a government-owned company.1

The new modification in the ownership orientation of GSTN aims to permit the Centre to own a 50% stake in the GST Network and the remainder will be held by the states on a pro-rata basis in the new entity.

The former structure of GSTN had been allowing majority shareholding to vest in the private sector expecting it to provide flexibility in its hiring and operational freedom. Faced widespread criticism after the portal crashed several times and businesses found it difficult to file returns, the Government evaluated for the need for transformation in the organizational setup and acquisition of the control of GSTN to forbid any failure of its purpose and goals. This modification in is expected to yield better result in terms of facilitation of compliance towards the novel taxation laws.

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Source: Mondaq

Author: S.S. Rana & Co. Advocates
Can govt make up for shortfall in GST revenue collections?

Can govt make up for shortfall in GST revenue collections?

Meeting the budgeted fiscal deficit target for the year looks difficult, especially in light of unimpressive revenue collections from the goods and services tax (GST) so far. GST collections in the first seven months of the year were 13% below the budgeted ₹1.12 trillion per month average, analysts at CLSA pointed out in a note to clients. If the trend continues, there is likely to be a shortfall of well over ₹1 trillion in GST collections for the year, they added.

Revenue collections from GST stood at ₹1.01 trillion in October. This is only the second time since the implementation of the indirect tax that collections have surpassed the ₹1 trillion-mark. Some tax experts point out that October is a seasonally strong month, based on the historical indirect tax collections. Given the increase in business activity ahead of the festival season, the surge is not surprising.

But if the monthly average target can be met only in seasonally strong periods, it’s clear that the yearly target was far too ambitious. As a result, the required GST run-rate continues to inch higher. Some tax experts are now working with a revised monthly GST revenue ask rate of ₹1.20 trillion from ₹1.15 trillion earlier.

In this scenario, what choices does the government have to make up for the shortfall in GST collections?

One of the options it seems to be pursuing is to rely on a large dividend from the central bank. Or, the government could hope that the direct tax revenues see more buoyancy in the rest of the fiscal year. Till now, India’s direct tax collections in the six months ended 30 September are 38.6% of the budgeted estimates of ₹11.5 trillion for FY19. Clearly, it would be foolhardy to expect miracles here.

Then there are the non-tax revenue collections. Divestment of public sector stakes may have been a good option. Till 30 September, the government has divested public sector equity worth about ₹15,000 crore. That is a far cry from the government’s divestment target of ₹80,000 crore for FY19.

Dividends from public sector firms too are an option. However, according to Madan Sabnavis, chief economist at CARE Ratings, dividends by public sector units haven’t been very impressive and one is unlikely to see a huge increase there.

Last but not the least, the government could look at reducing its expenditure. Kotak Institutional Equities believes without expenditure cuts, it will be difficult to stick to the budgeted fiscal deficit target. “We maintain our GFD/GDP estimate at 3.5% factoring in reduction in capital expenditure and some increase in revenue expenditure to factor for higher food and fuel subsidy,” said analysts from Kotak in a report on 1 November. GFD stands for gross fiscal deficit.

It’s important to note that even though global crude oil prices have dropped lately, average prices for the year are expected to remain higher, and will weigh on the country’s import bill and eventually the fiscal math. As far as cutting expenditure is concerned, taking a call on that will not be easy given this is a pre-election year.

In short, there is limited scope for the government to make up for the insufficient GST revenue collections; a miss on the fiscal deficit target looks unavoidable.

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Sources: Live Mint
Back offices now face 18% GST for services to multinational companies

Back offices now face 18% GST for services to multinational companies

Many back offices of multinationals in India will have to fork out 18 per cent and Goods and Services Tax (GST) on their services, the Economic Times reported on Monday mentioning a recent ruling of the Authority of Advance Ruling (AAR). The AAR has said that back office support services qualify as “intermediary” services and not exports.

Besides, Indian firms providing offshore support services to multinational companies will also face 18 per cent GST levy on their revenues. It may be noted that several of these firms were treated as exporters of services and thus, taxes were not applied in most situations. The AARs are quasi-judicial body that taxpayers may approach to seek guidance regarding the correct interpretation of GST provisions.

Abhishek Jain, Tax Partner, EY India, told ET: “This ruling could open the Pandora’s box for various India setups that are assisting foreign companies with back-office support functions such as accounting and legal. As these services do not qualify as exports, 18 per cent costs on these services could make them non-competitive.”

Many experts believe the verdict could also impact the service tax regime and that tax demands could also be made retrospectively, the report highlighted. According to the AAR decision, services provided by intermediaries should not be treated as ‘zero rated supplies.’

Tax experts feel the judgment has wide ramifications for businesses. They are of the opinion that the ruling would lead to litigation as tax sleuths may go after many companies that export services, the report said. Also, the verdict is likely to go against the GST law.

The implications would largely be on Indian firms that provide services to foreign companies, which in turn sell services to another company. “The ruling could lead to disputes in cases where three parties are involved, like vendor payments, follow up for receivables etc. In all such cases, there could be a potential tax demand of 18 per cent from the Indian entity,” Pratik Jain, National Leader, Indirect Tax, PwC India.

Meanwhile, the Indian IT industry revenue, including exports, is likely set to touch USD 167 billion for fiscal 2018-19, said its apex body Nasscom had said in October.

XaTTaX: Your automated E-Way bill compliance is just a click away!

Sources: Times Now News
Revenue department plans linking e-way bill with FASTag, logistics data bank to check GST evasion

Revenue department plans linking e-way bill with FASTag, logistics data bank to check GST evasion

The revenue department is planning to integrate e-way bill with NHAI’s FASTag mechanism and DMICDC’s Logistics Data Bank (LDB) services, to facilitate faster movement of goods and check GST evasion.

The proposal, according to officials, will improve operational efficiencies across the country’s logistics landscape.

Currently, lack of harmonization under the ‘track and trace’ mechanism in terms of sharing information among different agencies is affecting the ease of doing business in the country. Besides, it is also impacting the logistic costs of the companies.

The proposal, being worked out by the revenue department, will also help in preventing goods and services tax (GST) evasion by unscrupulous traders who take advantage of the loopholes in the supply chain, an official told PTI.

Touted as an anti-evasion measure, e-way bill system was rolled out on April 1, 2018, for moving goods worth over Rs 50,000 from one state to another. The same for intra or within the state movement was rolled out in a phased manner from April 15.

Transporters of goods worth over Rs 50,000 would be required to present the e-way bill during transit to a GST inspector if asked

“The integration of the e-way bill system with FASTag and LDB is expected to help boost tax collections by clamping down on the trade that currently happens on a cash basis,” the official said

The National Highways Authority of India (NHAI) has put in place the FASTag system for collection of toll electronically on national highways. FASTag also offers non-stop movement of vehicles through toll plazas

Integration of e-way bill with FASTag will help revenue authorities track the movement of vehicles and ensure that they are traveling to the same destination as the transporter or the trader had specified while generating the e-way bill.

It will also help the suppliers locate the goods through the e-way bill system. Transporters, too, would be able to track their vehicles through SMS alerts that would be generated at each toll plaza.

Similarly, Delhi-Mumbai Industrial Corridor’s (DMIC’s) container tracking services, also called LDB programme, would be integrated with the e-way bill to improve the logistics ecosystem.

The official said that the implementation of the proposal would require inter-ministerial coordination as integration would have several operational and technical challenges.

The new indirect tax regime GST was rolled out on July 1, 2017. With GST systems now stabilizing, the focus of the Central Board of Indirect Taxes and Customs is now on increasing compliance and checking evasion.

The government has also set up the Directorate General of GST Intelligence (DGGSTI) to investigate cases of tax evasion and conduct search and seizure operations under the GST Act, and erstwhile the Excise and Service Tax Act.


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Source: Economic Times.India Times
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 
Over 2 lakh assessees who migrated from VAT regime opt out of GST net

Over 2 lakh assessees who migrated from VAT regime opt out of GST net

The turnover of these assessees is below the prescribed threshold of 20 lakh: official

Over 2 lakh assessees have opted out of the Goods and Services Tax (GST) registration as their turnover is below the prescribed threshold. This will benefit both the taxpayers and the GST Network, the IT backbone of the new indirect tax regime.

These are assessees who migrated from the VAT (Value-Added Tax) regime to the GST regime. A senior Finance Ministry official told BusinessLine: “Turnover of these assessees are below the threshold of 20 lakh (10 lakh in some States), which means they are not required to continue under the new regime, though they think otherwise.” During the pre-GST regime, States had different slabs for registration under VAT/ST, which was as low as 1 lakh and could go up to 10 lakh: the thresholds for Service Tax and Central Excise were 10 lakh and 1.5 crore respectively.

With the universal threshold, it was obvious that some old assessees will opt out. This meant if the turnover of the entity is less than the GST threshold and the assessees were not willing to go for voluntary registration they had the option to get the provisional registration cancelled and move out of the GST net.

However, many assessees failed to complete the process, and so they continued to be a part of the GST-assessee base.

Originally, 88.61 lakh applied for migration and got the provisional certificate. Once all the formalities were completed, the provisional certificate was confirmed. The official said over 24.5 lakh did not complete the formalities and out of these 2.34 have opted for de-registration.

This meant there are over 64 lakh migrated taxpayers now. At present, GST has over 1.16 crore assessees which are a combination of migrated and new assessees.

Tax base

Another Finance Ministry official felt that with de-registration, the tax base will be effective. This kind of a tax base will serve two purposes — it will lighten the burden on the GSTN and will give a real picture of the indirect tax regime.

Tanushree Roy, Director – GST at Nangia Advisors LLP, said with a high number of assessees opting out of the GST registration it would enable them to focus more on business operations simultaneously reducing the costs and burden of undertaking the GST compliances.

This would also help the GSTN in efficient management of the portal and reduction in cost for maintenance of servers.

R Muralidharan, Senior Director at Deloitte India, said de-registration of over 2 lakh assessees will marginally reduce the traffic on GSTN as this is merely 3 per cent of the total return filers. Most of these assesses are likely to be below the threshold limit for registration.


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Source: The Hindu BusinessLine