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Govt extends the last date for filing GSTR-1 for March till April 13

Govt extends the last date for filing GSTR-1 for March till April 13

The government Wednesday extended the last date for filing final sales return form GSTR-1 for March by two days till April 13.

Similarly, the due date for furnishing tax deducted at source (TDS) return GSTR-7 for March has also been extended till April 12.

The last date for filing GSTR-1 and GSTR-7 for the month was April 11 and April 10, respectively.

“The details of outward supply of goods or services or both in Form GSTR-1 of the Central Goods and Services Tax Rules, 2017, for the month of March 2019 shall be furnished electronically through the common portal, on or before April 13, 2019,” the Central Board of Indirect Taxes and Customs (CBIC) said in a notification.

The extension of due date for filing sales return came after businesses complained of some issues in the GSTR-1 form while filing the form.

AMRG & Associates Partner Rajat Mohan said, “Even after 20 months of GST implementation, GSTN is suffering from technical glitches leading to inefficiencies in the overall compliance structure of tax filings. The GST Council also needs to have a ‘Plan-B’ for a swift and smooth GST compliance network”.

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Source: Business-Standard

GST rule change to aid businesses with better cash flow management

GST rule change to aid businesses with better cash flow management

Reversing its February notification, the central board of indirect taxes and customs (CBIC) has provided relief to businesses in terms of using credit in the goods and services tax (GST) system towards tax payment. This will aid businesses with better cash flow management.

“Input tax credit on account of Integrated tax (IGST) shall first be utilized towards payment of integrated tax, and the amount remaining, if any, may be utilized towards the payment of central tax (CGST) and State tax (SGST) or Union territory tax (UTGST), as the case may be, in any order,” the notification said.

Abhishek Jain, tax partner at EY said that this amendment would bring relief to businesses, who have been worried in the last couple of months on account of the possible increased cash outgo for payment of GST liability.

“With this change, businesses could now structure IGST credit utilisation in an order, which does not entail unwarranted cash payments of GST liability where credits are available,” he added.

From February 1, companies were mandated to utilise available Integrated GST (IGST) credit to set off tax liability in the form of IGST, Central GST, and State GST or UTGST in this very order. As a result, they were unable to use IGST credit to set off SGST liability without extinguishing their CGST liabilities.

With this change, businesses still have to set off IGST liability first. But now, the government has allowed businesses to utilise the remainder of IGST credit to pay off either of CGST or SGST liabilities according to their discretion.

Under the old rules which were in operation in February and March, in most of the cases, IGST credit used to get exhausted in IGST and CGST payments in order. CGST credit used to stay in the system un-utilized, and businesses had to make cash payments for SGST.

Now, under the modified rules, the taxpayer can choose to pay off SGST using IGST credit, even if the latter is not used to set off CGST liability. This will improve the efficiency of credit utilisation in the GST system while helping the concerned company with marginally increased working capital.

However, some businessmen said that the rules effective in February and March were not implemented in reality, since the GST Network (GSTN) system did not allow for the same. But nevertheless, this change makes it better for businesses, they said.


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

Source: Business-Standard.
Service providers can opt for GST composition scheme by April 30: CBIC

Service providers can opt for GST composition scheme by April 30: CBIC

The tax department has given service providers with a turnover of up to Rs 50 lakh time till April 30 to opt for the composition scheme and pay 6 percent GST.

The option to pay Goods and Services Tax (GST) at a reduced rate of 6 percent would be effective from the beginning of the financial year or from the date of obtaining new registration during the financial year.

Service providers opting for the composition scheme can charge a lower tax rate of 6 percent from customers, as against the higher rates of 12 and 18 percent for most services under GST.

In a circular, the Central Board of Indirect Taxes and Customs (CBIC) said suppliers who want to opt for composition scheme would have to file Form GST CMP-02 by selecting ‘Any other supplier eligible for composition levy’ latest by April 30, 2019.

Businesses which apply for new registration may avail the said benefit in Form GST REG-01 at the time of filing application for registration.

AMRG & Associates Partner Rajat Mohan said “numerous service providers tried to file this intimation opting composition scheme recently but were denied due to a legal embargo. Now with this clarification, GSTN would start accepting the intimations soon”.

The GST Council, headed by Finance Minister Arun Jaitley and comprising state ministers, in its meeting on January 10 had permitted service providers and those dealing in both goods and services with a turnover of up to Rs 50 lakh to opt for composition scheme with effect from April 1.

The GST composition scheme was so far available to traders and manufacturers of goods with an annual turnover of up to Rs 1 crore.

This threshold too has increased to Rs 1.5 crore from April 1.

Under the scheme, traders and manufacturers are required to pay only 1 percent GST on goods which otherwise attract a higher levy of either 5, 12 or 18 percent. Such dealers are also not permitted to charge GST from the purchaser.

Of the 1.20 crore businesses registered under GST, about 20 lakh have so far opted for the composition scheme.

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

Source: Economic Times.
View: A fair assessment of Good and Services Tax

View: A fair assessment of Good and Services Tax

After long deliberation, the goods and services tax (GST) was implemented in July 2017. Nearly two years have passed since, and there’s a widespread perception that GST revenue growth has not lived up to expectations. This is not a fair assessment. GST’s revenue performance must be measured against not the target set, but against the growth of nominal GDP.

An assessment was made by Kapil Patidar & Arvind Subramanian in June 2018. This showed that in the first year of implementation of GST, revenues grew by 11.9% and the buoyancy was 1.20. A buoyancy ratio over 1shows progressiveness in the revenue growth and opens up the prospect of a rising tax-to-GDP ratio.

This is a significant improvement over the pre-GST period when the buoyancy ratios for state value-added tax (VAT) and central indirect taxes like central excise and service tax were less than 1. The revenue performance is especially creditable given the transitional difficulties during implementation and teething technical problems with the GST Network (GSTN).

Some other analyses show that the tax-to-final consumption expenditure also grew from 10.3% in the year before GST (2015-16) to 11.9% (including adjustments for transitional credits) in 2017-18.

However, the state-wise picture shows that some states did better than the others. The states that had a high percentage of origin-based taxes in subsumed revenues — Bihar, Chhattisgarh, Himachal Pradesh, Punjab, and Odisha — were found to lag behind in subsequent revenue performance.

The relative buoyancy of GST revenue compared to the pre-GST period is not surprising. This is a result of two factors. One, the design of GST that integrated the entire value chain from raw material to retail for the purpose of indirect taxation. This design reduced non-compliance in downstream trading, as these entities chose to register to avail of the input tax credit generated upstream.

The Economic Survey 2016-17 also points out that small units even falling within the threshold exemption limit opted for GST registration to avail of the input tax credit as they buy largely from bigger units.

Two, GST buoyancy was also aided by the tax incidence on services increasing from 14% pre-GST to 18% post-GST. The buoyancy in GST revenues is also reflected in the bump in the personal tax revenues on the direct tax side. Personal income-tax collections include the revenues of unincorporated enterprises that have tended to pay more direct tax revenues induced by their formalization in the GST scheme.

A further surge in GST revenue will happen once land and real estate is brought under the GST net. This will clean up the land market and the revenue gains will be more on the direct tax side as more transactions are reported under GST.

Asalutary impact of GST is the greater coordination between the Central Board of Indirect Taxes and Customs (CBIC) and the Central Board of Direct Taxes (CBDT). This reduces non-compliance and enhances revenues, a win-win for both departments. The I-T departments have incorporated information on GST registration and turnover in their return format.

A more detailed analysis of GST revenue buoyancy is hampered by the fact that there is no data on the sectoral profile of the new registrants and of separate revenue trends for goods and services. There is a perception in many states that revenue from services has lagged behind expectations. This can be rectified by a small modification in the format of the GST annual return.

This modification would require companies to indicate the HSN (Harmonised System of Nomenclature) code in eight digits in respect of goods supplied by them and accounting codes of each of the services provided.

Duty payment in cash should be indicated code-wise for each of the goods and services. At the time of evolution of GST, it was visualized that the monthly and quarterly returns would be kept simple and that the annual return would capture detailed information for compliance verification and data analysis. It would be a real pity if an analysis is hampered by insufficient data. Besides greater revenues, the great success has been the emergence of the GST Council as a credible institution of cooperative federalism.

Its success has opened up the prospects of replicating this institutional arrangement in other sectors like power, agriculture, and transportation. The GST impact goes beyond revenues and rates of duty. It has fundamentally transformed our federal polity for the good.

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Source: Economic Times
CBIC asks tax officers to be cautious while processing fresh GST registration

CBIC asks tax officers to be cautious while processing fresh GST registration

Cracking down on tax evaders, the CBIC has asked tax officers to be cautious while processing an application for fresh GST registration by those businesses whose earlier registration has been cancelled due to non-compliance.

The Central Board of Indirect Taxes and Customs (CBIC) also directed tax officers to analyze the information by an applicant in the fresh registration form regarding details of a proprietor, director/members of the managing committee of associations/board of trustees, etc vis-a-vis any cancelled registration having same details.

Recently, a large number of registrations has been cancelled by tax officers on account of non-compliance.

However, it has come to notice of taxmen that such businesses continue to operate without any registration and are not applying for revocation or cancellation of registration and are instead applying for fresh registration.

Instead, many of them are applying for fresh registration, so as to evade taxes which were due under earlier registration.

“It is instructed that the proper officer may exercise due caution while processing the application for registration submitted by taxpayers, where the taxpayer is seeking another registration within the State although he has an existing registration within the said State or his earlier registration has been cancelled,” the CBIC said in its communication to field offices.

The Goods and Services Tax (GST) law allows a person to take separate registration on the same Permanent Account Number (PAN) in the same state.

However, a tax officer can reject the application for registration if the information or documents submitted by the applicant is found to be “deficient” if details in relation to earlier registration are suppressed.

Some of the details that may be concealed in the application for new registration are the date of commencement of business, a date on which liability to register arises, the reason to obtain registration, etc.

Such persons may also not furnish the details of earlier registrations, if any, obtained under GST on the same PAN.

“The proper officer may compare the information pertaining to earlier registrations with the information contained in the present application, the grounds on which the earlier registration(s) were cancelled and the current status of the statutory violations for which the earlier registration(s) were cancelled,” the CBIC said.

In cases where the registration has been cancelled due to non-compliance, the officer would have to check whether the business had filed an application for revocation of cancellation of registration.

“It is advised that where the applicant fails to furnish sufficient convincing justification or the proper officer is not satisfied with the clarification, information or documents furnished, then, his application for fresh registration may be considered for rejection,” the CBIC said.

About 1.2 crore businesses are registered under GST, which was rolled out on July 1, 2017.

“Many of the taxpayers are unable to cope with the burden of compliances and the pace of GST evolution, committing bonafide mistakes. A blanket push on tax officers to scrutinize all applications with a coloured lens would lead to a presumption of guilt without giving even first opportunity of being heard,” AMRG & Associates Partner Rajat Mohan said.

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Source: Business Today
Realtors have time till May 10 to opt for old GST rates

Realtors have time till May 10 to opt for old GST rates

Real estate firms have time till May 10 to communicate to their respective jurisdictional officers whether they want to continue with the old GST rates with the input tax credit, failing which they will be deemed to have migrated to new tax rates. The GST Council had given the option to real estate companies to either opt for old rates of 12 per cent (for residential) and 8 per cent (affordable housing) with input tax credit (ITC) benefits or the new tax rates of 5 per cent for residential units and 1 per cent for affordable housing without the benefit of adjusting the credit on inputs used during construction.

The Central Board of Indirect Taxes and Customs (CBIC) has issued a notification giving real estate companies a one-time option to choose either of the tax rates.

“Provided that in case of an ongoing project, the registered person shall exercise one time option … to pay central tax on construction of apartments in a project at the rates as specified …. by the 10th of May, 2019,” the CBIC said.

In case, realtors do not exercise the option, they will be covered under the lower tax rate of 5 percent and 1 percent with effect from April 1, 2019, and will not be entitled to avail tax credit on inputs.

Meanwhile, in a separate notification, the CBIC has asked the real estate companies that will be migrating to the new rates to prepare their books of accounts with regard to ITC and repay the over-used credit, if any, to the government in 24 installments.

Explaining the provision, AMRG & Associates Partner Rajat Mohan said builders opting for a lower rate of taxes with effect from April 1 would have to recalculate eligible tax credit since the inception of GST based on the proportion of residential to commercial carpet area, sold to unsold units and invoiced to a un-invoiced amount.

“Based on the factual data if tax credit has been availed beyond permissible proportion, then such excess needs to paid back to tax authorities. In quite a few cases, such tax payment would be magnanimous, especially where the project is nearing completion, but unsold units lying in inventory are high. This will have a high tax risk on real estate sector and many may experience the worst cash flow position since the inception of GST,” Mohan said.

Further, the CBIC has also asked builders to maintain project wise account of inward supplies from a registered and unregistered supplier.

“GST mandated a state-wise registration. However, now taxpayers in the real estate sector are liable to produce project-wise break-up of procurements and outward supplies in order to re-calculate admissible tax credits. This will burden a taxpayer with multiple tax records to be updated on a regular basis, moving away from ‘Ease of doing business‘,” Mohan said.


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Source: Times of India
GST Authority clarifies on change/transfer in ownership of sole proprietorship

GST Authority clarifies on change/transfer in ownership of sole proprietorship

The GST (Goods & Services Tax) Authority on Thursday made it clear that transfer or change in the ownership of business will include transfer or change in the ownership of business due to death of the sole proprietor. Accordingly, a mechanism has been specified for transferring unutilized input tax credit.

A circular issued by the Central Board of Indirect Taxes and Customs (CBIC) mentioned that the transferee or the successor will be liable to be registered with effect from the date of such transfer or succession, where a business is transferred to another person for any reasons, including the death of the proprietor. Here the applicant will be required to mention the reason to obtain registration as ‘death of the proprietor,’ in the registration form (GST REG-01) to be filed electronically in the common portal.

The legal hire (of the dead sole proprietor) will be required to give application for cancellation of the existing registration. The GST Identification Number (GSTIN) of a transferee to whom the business has been transferred is also required to be mentioned to link the GSTIN of the transferor with the GSTIN of a transferee. In case of death of a sole proprietor, if the business is continued by any person being a transferee or successor of business, it shall be construed as a transfer of business. This means a transfer of unutilized input tax credit and liability to pay tax along with penalty, if any, will also be possible.

In case of transfer of business on account of the death of a sole proprietor, the transferee/successor will file ‘FORM GST ITC-02’ in respect of the registration to be canceled. Also, such an action is required to be completed before applying for the cancellation. This should be filed before filing the application for cancellation of such registration. Upon acceptance by the transferee/ successor, the unutilized input tax credit specified in ‘FORM GST ITC-02’ will be credited to his electronic credit ledger.

New registration

In another circular related to verification of applications for grant of new registration, the CBIC said there have been instances when registration gets canceled due to one reason or any other reason, such businesses prefer to apply for new registration rather than applying for revocation of cancellation of registration. There is a possibility that such a person might not have furnished requisite returns and not paid tax for the tax periods covered under the old/canceled registration.

Further, such persons would be required to pay all liabilities due from them for the relevant period in case they apply for revocation of cancellation of registration. Hence, to avoid payment of the tax liabilities, such persons may be using the route of applying for fresh registration. One can take separate registration on the same PAN in the same State.

Now, CBIC has instructed its officials to exercise due caution while processing such applications. It is clarified that not applying for revocation or cancellation of registration will be deemed to be a ‘deficiency’ and could be a reason for rejection of the application for new registration.

XaTTaX: Cloud and On-Premises Based GST Filing Software For India

Source: The Hindu Business Line.
Expensive cars, jewellery to become cheaper as TCS to be out of GST working

Expensive cars, jewellery to become cheaper as TCS to be out of GST working

In a relief to buyers of high-value cars and jewellery, the CBIC has said that the TCS amount would be excluded from the value of goods for computing GST liability.

Under the Income Tax Act, tax collection at source (TCS) is levied at 1 per cent on purchase of motor vehicles above Rs 10 lakh, jewellery exceeding Rs 5 lakh and bullion over Rs 2 lakh. TCS is also levied on other purchases at different rates.

The Central Board of Indirect Taxes and Customs (CBIC) in a circular said that the TCS amount would be excluded from the value of goods while computing the Goods and Services Tax (GST) liability.

Earlier in December, the CBIC had said that the TCS amount would also be included while ascertaining the GST liability on goods on which TCS is applicable under the I-T Act.

In view of the representations received from various stakeholders and after consultation with the Central Board of Direct Taxes (CBDT), the CBIC has decided to exclude the TCS amount paid while valuing the goods for the purpose to levy GST.

The CBDT has clarified that TCS is not a tax on goods but an interim levy on the possible “income” arising from the sale of goods by the buyer and to be adjusted against the final income-tax liability.

“For the purpose of determination of value of supply under GST, Tax collected at source (TCS) under the provisions of the Income Tax Act, 1961 would not be includible as it is an interim levy not having the character of tax,” the CBIC said.

EY India Tax Partner Abhishek Jain said: “This clarification comes as quite a relief for businesses specifically the automotive sector. While most industry players already believed that GST should not be levied on the Income tax TCS component, given the otherwise clarification by the Government, they were quite apprehensive of litigation on this aspect”.

AMRG & Associates Partner Rajat Mohan said the erstwhile circular issued by the CBIC unnecessary complicated the mechanism of calculating GST where TCS Income tax was also collected by the supplier.

“Recent corrigendum of CBIC eased the calculation process by breaking the circular referencing which would also result in marginally rationalising the tax payments (GST and income tax both),” Mohan said.


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Source: Business-Standard.
CBIC clarifies on levy of GST on sales promotion schemes

CBIC clarifies on levy of GST on sales promotion schemes

Promotional schemes such as ‘buy one get one free’ (BOGO) and additional quantity for the same price will be eligible for input tax credit, the government has clarified, bringing huge relief to fast moving consumer goods (FMCG), food, retail, and pharmaceutical companies.

Companies will not have to pay goods and services tax (GST) separately on the additional product unless it is a totally different one facing a higher rate of tax. They will also not have to reverse input tax credit taken for these. “Taxability of such supply will be dependent on whether it is composite or mixed. The rate of tax will be determined as per section 8 of the (GST) Act,” the circular said.

The clarification comes after several representations from the industry. A number of companies in the FMCG and pharma sectors had been served notices by tax authorities, asking them to reverse input tax credit in case of such offers, prompting many to drop such schemes.

The circular has clarified that GST for BOGO offers would be paid on the price recovered from the customer without reversing the input credit. “The supplier shall be entitled to avail input tax credit for such inputs, input services and capital goods used in relation to the supply of goods or services or both on such discounts,” it said. Companies offering schemes such as ‘buy more, save more’ will also be entitled to avail input tax credit.

In respect of goods lost, stolen, destroyed, written off or disposed of by way of gift or free samples, it is clarified that input tax credit shall not be available to the supplier on inputs, input services, and capital goods. There will no GST on gifts and free samples, prevalent among pharma companies.

Tax experts say this is a big relief for the industry. “The ordeal has come to an end due to this clarification and is a welcome move for many industry players to stop preparing for litigation,” said Suresh Nandlal Rohira, partner, Grant Thornton India LLP.

However, experts also feel the government should clarify the issue of subsidy given by companies to dealers or retailers. “A long-awaited clarification has now been issued. Many aspects have been covered, though the one relating to subsidy has not been addressed. It will be good if that too is clarified,” said Anita Rastogi, partner, PwC.

XaTTaX: Cloud and On-Premises Based GST Filing Software For India

Source: Economic Times
Govt detects Rs 20,000 cr GST evasion in April-February FY19

Govt detects Rs 20,000 cr GST evasion in April-February FY19

The government has detected Rs 20,000 crore worth GST evasion so far this fiscal and will take more steps to check frauds and increase compliance, a senior tax officer said on Wednesday.

Central Board of Indirect Taxes and Customs Member (Investigation) John Joseph further said the department would soon call a meeting of the representatives of the real estate sector to understand transition issues faced by the sector post reduction in GST rates.

The GST Council, chaired by Finance Minister Arun Jaitley and comprising state counterparts, earlier this week decided to cut tax rates on under-construction apartments and affordable housing to five percent and one percent, respectively.

However, builders will not be able to claim credit for the taxes paid on inputs, like steel, cement.

The earlier GST rate on under-construction apartments and affordable housing was 12 percent and eight percent with an input tax credit (ITC), respectively.

On-demand for giving ITC relief to the builders of the under-construction flats which are already built but not yet sold to buyers, Joseph said the real estate sector will have to raise the issue with the urban development ministry.

“You need to talk to them (urban development ministry). As revenue department we cannot give you any benefit of subsidy to that extent,” he said at an Assocham event here.

Joseph said between April-February 2018-19, GST evasion worth Rs 20,000 crore has been detected of which Rs 10,000 crore was recovered.

He said the tax officers on Tuesday detected fake invoice worth Rs 1,500 crore which was used to claim illegal GST credit of Rs 75 crore.

“We have already recovered Rs 25 crore and the rest is on the way,” Joseph said.

Stating that only 5-10 percent of the businesses are “black sheep” and bring a bad name to the industry, he said the government will take more measures to increase compliance, and act against evaders in a way such that genuine businesses do not suffer.

Joseph said the government has been dynamic in rationalizing tax rates since GST rollout on July 1, 2017, while increasing compliance for 1.2 crores registered businesses.

“In future, as GST moves forward, the rates need to consolidate. Across the world, it is one rate, but it may not be possible for us to implement it here… because we have the poorest of the poor and the richest of the rich in the country. “What is good for the richest, cannot be the best for the poor… But five rates converging into two or three, depending on what the Council decides. This is the way forward,” he said.

Currently, GST has a 4-tier slab of 5, 12, 18 and 28 percent, while essential items are zero-rated.


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

Source: Money Control.