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FinMin asks industry to be cautious while filing annual GST returns form

FinMin asks industry to be cautious while filing annual GST returns form

The Finance Ministry on Thursday asked to trade and industry to exercise caution while filing the annual GST returns to form as the facility to revise it is not available.

In a statement, the ministry said the annual returns form is now available on the common portal for filing and asked Goods and Services Tax (GST) payers to file their returns at the earliest.

The ministry had on December 31, 2018, notified the annual returns forms GSTR-9, GSTR-9A and GSTR-9C. The GST Council had in December extended the last date for filing these forms by three months to June 30, 2019.

GSTR-9 is the annual return form for normal taxpayers, GSTR-9A is for composition taxpayers, while GSTR-9C is a reconciliation statement.

“Taxpayers may please exercise caution while filing this return as facility to revise the Form GSTR-9 and Form GSTR-9A is not available,” the ministry said.

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Source: Money Control.
GST collections drop to Rs 97,247 crore in February

GST collections drop to Rs 97,247 crore in February

GST collections in February dropped to Rs 97,247 crore in February from Rs 1.02 lakh crore in the previous month, the Finance Ministry said on March 1.

The number of sales return or GSTR-3B filed for the month of January up to February 28, 2019 is 73.48 lakh. “The total gross GST revenue collected in February 2019 is Rs 97,247 crore of which Central GST is Rs 17,626 crore, State GST (SGST) is Rs 24,192 crore, Integrated GST (IGST) is Rs 46,953 crore and Cess is Rs 8,476 crore,” the ministry said in a statement. Goods and Services Tax (GST) collections in the current fiscal till February totalled Rs 10.70 lakh crore.

The government has lowered the GST collection target for current fiscal to Rs 11.47 lakh crore in the Revised Estimates, from Rs 13.71 lakh crore budgeted initially. For the next fiscal 2019-20, the GST collection target has been budgeted at Rs 13.71 lakh crore.

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Source: Money Control.
GST on houses under construction slashed to 5%; affordable housing to attract 1%

GST on houses under construction slashed to 5%; affordable housing to attract 1%

In a big relief to home buyers, the GST Council on Sunday slashed tax rates on under-construction housing properties to 5 percent without an input tax credit, from the existing 12 percent, finance minister Arun Jaitley said.

The council also cut GST rates on affordable housing to 1 percent from the current 8 percent and expanded the scope of affordable housing to those costing up to Rs 45 lakh and measuring 60 sq meter in metros and 90 sq meter in non-metro cities.

The new tax rates will come into effect from April 1, 2019.

Currently, the GST is levied at 12 percent on payments made for under-construction properties or ready-to-move-in flats where completion certificate has not been issued at the time of sale.

However, builders will not be able to claim the input tax credit (ITC) under the new GST rates.

“This (GST reduction) decision will certainly give a boost to the construction sector,” Jaitley told reporters.

However, Goods and Services Tax (GST) is not levied on real estate properties for which completion certificate has been issued at the time of sale.

With regard to lotteries, the GST Council, however, deferred its decision with Jaitley saying that the Group of Ministers (GoM) will meet again to discuss the proposal.

Currently, state-run lotteries attract 12 percent GST, while state-authorized ones attract 28 percent.

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Source: Times Of India.
GST Council Extends Return Filing Date, Defers Decision On Realty Tax

GST Council Extends Return Filing Date, Defers Decision On Realty Tax

The GST Council on Wednesday deferred a decision on the rationalization of tax rates on real estate and lottery till February 24 as some opposition-ruled states demanded that a meeting, where members are physically present, be convened for deciding on such crucial issues. The 33rd meeting of the Council, held through video conferencing, also decided to extend the deadline for filing summary sales return – GSTR-3B – for January by two days till February 22.

“Considering the speed at which returns are getting filed, thousands of returns being filed every hour, the suggestion before the GST Council was to extend the deadline by two days for all states; and since some areas are facing disturbance, for Jammu & Kashmir it is extended till February 28. So we took that decision,” Finance Minister Arun Jaitley said.

The GST Council, headed by Mr. Jaitley and comprising state counterparts, was also slated to discuss the reports of the group of ministers (GoM) on under-construction housing property and lottery. Ministers from all states attended the meeting.

Briefing reporters after the meeting of the Council, Mr. Jaitley said the report of the GoM on real estate was considered, and since some states wanted a physical meeting before a final decision is taken on the issue, hence, a final decision would be taken after a physical meeting on February 24.

However, GST on lottery was not be taken up for discussion by the Council on Wednesday.

“The discussion which remained incomplete today through video conferencing… Few ministers expressed their opinion and the rest will express their opinion and we will try and take a decision on this issue on Sunday. So the meeting stands adjourned as of day for Sunday,” Mr. Jaitley said.

During the meeting, opposition-ruled states like Delhi and Kerala demanded that a physical meeting is held to decide on crucial issues like real estate and lottery, while the representative from Punjab flagged a technical point relating to land cost being included while deciding on GST rate.

“I have always followed an approach of moving as per consensus, and since some of the states wanted a meeting where members are physically present, keeping the idea of consensus in mind, I adjourned the meeting to Sunday so that a physical meeting can be held and the same issue will be discussed on Sunday,” Mr Jaitley said.

The GoM on real estate sector, headed by Gujarat Deputy Chief Minister Nitin Patel, had earlier this month suggested cutting GST on under-construction residential properties to 5 percent without input tax credit (ITC), from 12 percent, currently. On affordable housing segment, it suggested that GST is slashed to 3 percent, from 8 percent.

At present, GST is levied at 12 percent with ITC on payments made for under-construction property or ready-to-move-in flats where completion certificate has not been issued at the time of sale.

During the Council meeting on Wednesday, the representative from Bihar suggested that GST on the affordable housing segment be brought down to 1 percent. It also suggested that where 90 percent area of a property is used for residential purposes and 10 percent is used for commercial purpose, it should be treated as residential property for GST purposes.

The GoM on the lottery, under Maharashtra Finance Minister Sudhir Mungantiwar, favored a uniform GST rate of either 18 percent or 28 percent.

Currently, a state-organized lottery attracts 12 percent GST while a state-authorized lottery attracts 28 percent tax. The GoM favored hiking GST rate on the state-organized lottery to either 18 percent or 28 percent and lowering rate on a state-authorized lottery to 18 percent or retaining it at 28 percent.

On Tuesday, Kerala Finance Minister Thomas Isaac had strongly objected to the suggestion of the GoM saying this would benefit “lottery mafia” and that a decision should be taken only during a physical meeting.

“I will walk out of the February 20 Council meeting if any decision is taken on a lottery. Also, I will henceforth not attend any Council meetings till the elections are over. This is not cooperative federalism,” Mr. Isaac had said.

Delhi Deputy Chief Minister Manish Sisodia had also written to Mr. Jaitley on Tuesday, seeking that a meeting is held where all members are physically present.

The two GoMs were set up by the GST Council last month.

PwC India Partner and Leader Indirect Tax Pratik Jain said restricting the input credit is not a good idea for any sector, particularly real estate which requires more formalization.

“If at all the final decision is to introduce a 5 per cent levy without input credit, it is important that other related issues such as reduction in GST rate on cement and on construction contracts are also deliberated in detail, along with aspects such as treatment of input credit which may already be accumulated in the books,” Mr Jain said.


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Source: NDTV.
GST Council meet inconclusive; real estate to be taken up at meeting on Feb 24

GST Council meet inconclusive; real estate to be taken up at meeting on Feb 24

The Goods and Services Tax (GST) Council meeting on February 20 remained inconclusive after some state finance ministers sought a physical meeting as they felt an issue as crucial as a special scheme for real estate sector should not be discussed through a video conference. The meeting will now take place in Delhi on February 24.

“I have always followed the approach of moving as per consensus and some of the states wanted meeting where members are physically present, keeping the idea of consensus in mind, I adjourn the meeting to Sunday (February 24),” Finance Minister Arun Jaitley said after the meeting.

Moneycontrol had on Tuesday reported that as many as six states, including Delhi, Kerala, and Punjab have requested Finance Minister and the head of the GST Council Arun Jaitley to postpone the 33rd Council meeting via video conference and call for a physical meeting.

“I have always followed the approach of moving as per consensus and some of the states wanted meeting where members are physically present, keeping the idea of consensus in mind, I adjourn the meeting to Sunday (February 24),” Finance Minister Arun Jaitley said after the meeting.

Moneycontrol had on Tuesday reported that as many as six states, including Delhi, Kerala, and Punjab have requested Finance Minister and the head of the GST Council Arun Jaitley to postpone the 33rd Council meeting via video conference and call for a physical meeting.

The meeting was also expected to address another issue– a single rate of tax on the lottery — that some states believe should be taken up in the presence of each and every member of the Council.

Currently, the GST Council has 33 members, including Jaitley and state finance ministers or any other representative from every state.

The Council met today to consider the reports of two ministerial panels pertaining to real estate and lottery.

One of the panels, headed by Gujarat Deputy Chief Minister Nitin Patel has recommended 5 percent GST on under-construction properties and 3 percent tax in case of affordable housing category. However, in both cases, input tax credit (ITC) cannot be claimed.

Currently, GST is levied at an effective rate of 12 percent (standard rate of 18 percent less a deduction of six percent as land value) on premium housing and effective rate of eight percent (concessional rate of 12 percent less a deduction of four percent as land value) on affordable housing on payments made for under-construction property or ready-to-move-in flats where completion certificate has not been issued at the time of sale.

The panel headed by Maharashtra Finance Minister Sudhir Mungantiwar has uniformity of taxation on lottery under GST and has recommended 18 or 28 percent tax rate. The final called will be taken by the Council.

Under GST, state-organized lottery falls under the 12 percent tax slab while state-authorized lottery attracts 28 percent tax.

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Source: Money Control
Delayed filing of returns: Rs 4,172 crore late fee collected since GST launch

Delayed filing of returns: Rs 4,172 crore late fee collected since GST launch

Fee for late filing of returns is Rs 25 per day for CGST and an equal amount under State GST. A total of Rs 4,172.44 crore was collected by the government as late fee for the delayed filing of various goods and services tax (GST) returns since the implementation of the indirect tax regime on July 1, 2017, till February 4, 2019, Finance Ministry data showed.

GST-related laws provide for the levy of late fee to discourage delayed filings of returns, the fee for which has been brought down for various categories during the course of implementation of the indirect tax regime. The collections under late fee are net of reversals.

The fee for late filing of the returns is Rs 25 per day for Central GST (CGST) and an equal amount under State GST (SGST). However, those businesses who have to file returns but have ‘nil’ tax liability are required to pay a fine of Rs 10 under CGST law, and an equal amount under SGST law.

While providing the data on mop-up from levy of late fee in reply to a query in Lok Sabha recently, Minister of State for Finance Shiv Pratap Shukla, said: “Late fee is levied u/s 47 of the CGST Act, 2017 on any registered person who fails to furnish returns by the due date at the rate of Rs100 every day during which such failure continues subject to maximum amount of Rs 5,000.

To ameliorate the concerns of taxpayers and to smoothen the transition to new regime the government had reduced the late fee for delayed filing of details in Form GSTR-1 and returns in Form-GSTR-3B and Form GSTR-4 to Rs 25 for every day during which such failure continues, subject to maximum amount of Rs 5,000 under CGST and an equal amount under SGST, he said.

The GST Council in its 31st meeting held on December 22 had announced a one-time waiver for late filing penalty for those who are supposed to file GST returns till March 31 following demands for the same from several quarters. “Late fee shall be completely waived for all taxpayers in case of Form GSTR-1, Form GSTR-3B & Form GSTR-4 for the months/ quarters July 2017 to September 2018 are furnished after December 22, 2018, but on or before March 31, 2019,” the ministry statement had said. Also, the due date for filing of annual returns was extended up to June 30, 2019.

Under the GST regime, registrants are supposed to file GSTR-1 which is the final sales return and GSTR-3B return, which is the summary sales return filed by businesses. GSTR-4 is filed by businesses who have opted for composition scheme under the GST law.

As on December 27, 2018, 1,17,48,408 taxpayers were registered under GST which include 60,73,574 existing taxpayers who have migrated to GST and 56,74,834 newly registered taxpayers.

While revenue from direct taxes are estimated to exceed the initial budget target by Rs 50,000 crore to Rs 12 lakh crore in 2018-19, the goods and services tax collections have fallen short of the budget target by Rs 1 lakh crore, with revised estimate for 2018-19 pegged at Rs 6.44 lakh crore, according to interim Budget 2019-20 presented on February 1.

GST collections have remained below estimates, but average collections have improved in the current fiscal year over the previous year. The average monthly gross collection of GST in 2018-19 till the month of January is Rs 97,555 crore, as compared to last year average monthly collection of Rs 89,885 crore.


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Source: Indian Express.
On GST Council table: Tax relief for real estate, duty relaxation for exporters

On GST Council table: Tax relief for real estate, duty relaxation for exporters

The proposal was discussed in 26th GST Council meeting in March last year and since many technical, legal and administrative issues were identified, its implementation was put on hold.

Duty relaxation for exporters and a tax relief package for the real estate sector are likely to be discussed at the next meeting of the GST Council, which is expected to meet once before the model code of conduct kicks in ahead of the Lok Sabha elections.

Targeting the steady erosion of export competitiveness across segments, which is especially telling in labour-intensive sectors such as textiles and garments, the Centre is readying a proposal for a duty drawback like scheme under the Goods and Services Tax (GST) regime that could comprehensively compensate exporters for embedded taxes.

Also, a ministerial panel set- up last month to analyse tax issues faced by the real estate sector under the GST regime is set to make a strong push for lower tax rates for under-construction residential properties and the affordable housing segment.

Currently, under the GST regime, compensation for taxes other than the basic customs duty (BCD) is not given to exporters, which ends up eroding their competitiveness. Officials involved in the exercise confirmed that the duty drawback scheme is being readied after a letter from the Directorate General of Foreign Trade (DGFT) to the Central Board of Indirect Taxes & Customs sought relief on this count.

After this, a proposal has been sent to the GST Policy Wing for a duty drawback like scheme under GST. GST officials are also discussing contours of the proposed e-wallet scheme for exporters, which was put on hold for six months until October last year.

“A scheme to provide more sops for exporters such as some relief on the front of the additional levy is being worked on. It would be more clarificatory in nature aimed at freeing up the working capital of exporters,” said a government official, adding that the existing export incentive scheme Merchandise Export from India Scheme (MEIS) could be tweaked to give some more sops to exporters.

The Commerce Ministry has been pushing for more relief to exporters including the e-wallet scheme but the Finance Ministry has raised some concerns about the possible misuse by some fly-by-night exporters, said another official. An inter-ministerial meeting regarding the e-wallet scheme for exporters has been scheduled for next week.

The e-wallet scheme or electronic e-wallets will be credited with notional or virtual currency by the DGFT. This notional/virtual currency will be used by the exporters to make the GST/IGST payment on goods imported by them so their funds are not blocked.

The proposal was discussed in 26th GST Council meeting in March last year and since many technical, legal and administrative issues were identified, its implementation was put on hold.

“It will monitor the track record of the exporter and provide relief on taxes paid on inputs. Last time, the discussion stalled as there were concerns about the availment of credit and the exporter having an edge over others since his working capital will be free compared to other exporters,” an official said.

Meanwhile, the Group of Ministers (GoM), under Gujarat Deputy Chief Minister Nitin Patel, set up last month to analyse tax rates and challenges being faced by the real estate sector under the GST regime is leaning in favour of lower rates for under-construction residential properties.

The panel has favoured lowering the GST rate on under-construction residential properties to 5 per cent (without input tax credit) from the present rate of 12 per cent with an input tax credit (after abatement of land) and for affordable housing to 3 per cent from the current rate of 8 per cent.

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Source: Indian Express.
GST collections cross Rs 1 lakh crore in January: Finance Ministry

GST collections cross Rs 1 lakh crore in January: Finance Ministry

GST collections have jumped to Rs 1 lakh crore in January this year from the Rs 94,726 crore collected in December last year, Finance Ministry said today. This has been a significant improvement over a collection of Rs 94,725 crore during last month and Rs 89,825 crore during the same month last year. Final figures and details of collections for the entire month will be intimated on February 2, the ministry said in a statement.

“This increase has been achieved despite various Tax Relief measures implemented by the GST Council to lower the tax burden on the consumers,” the finance ministry said in a tweet.

This is only the second time when the collections have crossed Rs 1 lakh crore in this fiscal. GST collection stood at Rs 1.03 lakh crore in April, Rs 94,016 crore in May, Rs 95,610 crore in June, Rs 96,483 crore in July, Rs 93,960 crore in August, Rs 94,442 crore in September, Rs 1,00,710 crore in October and Rs 97,637 crore in November.

The government has set a budgetary target of over Rs 1 lakh crore monthly average collection in FY 2019.

GST Collection

GST Council in its December 22 meeting decided to cut the tax on 17 items and six services including computer monitors, TV screens, video games, lithium-ion power banks, retreaded tyres, wheelchairs, and cinema tickets.


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Source: Economic Times
‘Changes in GST will boost SMEs but may complicate tax system’

‘Changes in GST will boost SMEs but may complicate tax system’

The goods and services tax (GST) was intended to bring uniformity and harmony to India’s indirect tax laws. But all that is set to change yet again with a few states opting out of the recently announced registration criteria for businesses, wherein the annual sales threshold for GST registration was doubled to ₹40 lakh.

While Delhi, Jammu and Kashmir, and Assam have opted for doubling the annual sales threshold for GST registration, Kerala has opted to retain it at ₹20 lakh, a person familiar with the development said. The remaining states, however, are expected to decide sometime this week.

During the announcement of the new threshold on 10 January, the GST Council, chaired by finance minister Arun Jaitley, had allowed states to opt for either of the two levels after some states objected to raising the threshold limit uniformly for all states to ₹40 lakh barring the hill states. The freedom applies only to supply of goods and not for services, which account for a little over half of India’s $2.7 trillion economy.

The states were given a week’s time to take a call, according to the official statement issued after the last Council meeting. “It is not proper to hurry them through a decision,” a second person privy to the talks at the meeting said, requesting anonymity. The Council’s decision gives states flexibility to decide their optimum tax base without hurting small businesses and merchants with red tape. Experts said state governments will exercise this liberty keeping in mind the number and size of businesses in its territory. Inter-state suppliers anyway require GST registration irrespective of turnover. The Council had favoured a higher threshold as small manufacturers with annual sales below ₹1.5 crore, who were exempted from central excise duty in the pre-GST era, had come under GST when registration for businesses was made compulsory for those with annual sales of ₹20 lakh or more. Traders with sales ranging between ₹5 lakh and ₹40 lakh, depending on their state, were required to register for value added tax (VAT) in the earlier regime.

While policymakers consider it expedient to give relief to small businesses from registration, experts say this will complicate the tax system further. “Different threshold limits in various states will take us back to the VAT regime where this was prevalent. Besides, it will add one more layer of complexity to pan-India businesses,” said M.S. Mani, partner, Deloitte India.


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Source: Live Mint
GST Council Forms Panel To Aid Real Estate Sector

GST Council Forms Panel To Aid Real Estate Sector

The GST Council has notified formation of a ministerial panel which will study problems plaguing the real estate sector under the indirect tax regime and suggest remedial measures.

The panel will be headed by Gujarat Deputy Chief Minister Nitin Patel and will have Maharashtra Finance Minister Sudhir Mungantiwar and Karnataka Finance Minister Krishna Byre Gowda as its members, according to a statement by Ministry of Finance. Other members include the finance ministers of Kerala, Punjab and Uttar Pradesh—TM Thomas Isaac, Manpreet Singh Badal and Rajesh Agarwal, respectively—and Goa Panchayat Minister Mauvin Godinho.

A raft of measures over the past two years— a housing law that protects the interests of buyers, demonetisation, the goods and services tax and a crackdown on benami property (or property held via proxy)—resulted in a temporary slowdown in the real estate sector. These measures were aimed at hobbling the shadow economy and widening the tax net.

The council, in its meeting on Jan. 10, had suggested setting up of a panel to boost the residential segment of the real-estate sector.

The terms of reference of the panel include:

  • Studying GST rates and problems the residential segment faces under the new indirect tax regime.
  • Suggesting a scheme for the sector like the composition scheme—where taxpayers can pay a flat GST rate without the option of availing credit on inputs—for traders.
  • Examining GST on transfer of development rights and development rights in a joint development agreement.
  • Examining legality of inclusion or exclusion of land in composition scheme and suggest valuation mechanism. Currently, purchase or sale of land doesn’t attract GST.

At present, GST on under-construction properties is 12 percent, while affordable housing projects attract 8 percent GST with the facility for builders to avail credit on inputs. Ready-to-move-in properties don’t attract GST.

A composition scheme without the facility to avail input tax credit may not work well, especially for the low-cost housing segment, as it may entail increase in GST cost for builders as compared with the current arrangement, said Abhishek Jain, an indirect tax partner at EY India.

The statement didn’t stipulate a deadline for the panel to submit its recommendations.

The real estate sector has faced a set of challenges under GST, which the tax hasn’t been able to alleviate, said Mahesh Jaising, partner at Deloitte India. Primary advantage of GST, which was full credit on taxes on all procurements on goods and services hasn’t fully helped the sector, he said.

The real estate sector is hopeful that the panel will address its concerns with specific focus on reduction of GST rate from 12 percent and with introduction of an expected composite rate of GST, as was prevalent under the erstwhile regime, Jaising said.


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Source: Bloomberg Quint