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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
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
Free banking services out of GST net: FinMin

Free banking services out of GST net: FinMin

Free banking services like chequebook issuance and ATM free banking services out of gst net finmin officialwithdrawals is likely to remain out of the ambit of the GST, a senior finance ministry official said.

The Department of Financial Services had approached its revenue counterpart to clear the confusion over the levy of Goods and Services Tax (GST) on some of the free services offered by banks to their customers.

“The revenue department is likely to tell the financial services department that GST will not be levied on free banking services,” an official told PTI.

Amid banks getting service tax notice for non-payment of the levy on free services, the Department of Financial Services (DFS) had approached the revenue department seeking clarity on whether such services would attract GST.

The DFS was of the opinion that services such as the issuance of chequebooks, account statements and ATM withdrawals are free up to a certain limit and not commercial activities which cannot be brought under the ambit of GST.

Read More: Expedite GST practitioners’ registration: CBIC chief

The Indian Banks Association (IBA) on behalf of the management of banks too had made representation to the tax authorities.

The service tax notice for period 2012-2017 was served as tax officials were of the view that banks were not offering ‘free services’ but actually charging customers by asking them to maintain a minimum account balance.

Every bank offers a different slab of minimum balance to customers, based on which some free services are provided.

GST was rolled out from July 1, 2017, prior to which central excise and service tax was levied on goods and services.

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GST Council meet on May 4, simplifying returns on agenda

GST Council meet on May 4, simplifying returns on agenda

Finance Minister Arun Jaitley-chaired GST Councilarun-jaitley-gst-council will meet on 4 May to discuss a simpler return form and the amendments required in the indirect tax regime rules.

The 27th meeting of the Council, comprising state finance ministers, will meet through video conferencing and will also mull over the proposal of converting GSTN into a government company. A decision on return simplification could be on the cards with the Sushil Modi-led Group of Ministers putting before the Council the three models of new return form for discussion, an official said.

With Jaitley been advised by doctors to stay in isolation to avoid contracting infection, the meeting has been planned through video conferencing.

The GST Council had in March discussed on two models of GST returns and suggested that the GoM would work further simplification. The official said the amendment to the law would also be taken up once the Council clears the new GST return format.

One of the models presented before the Council was that provisional credit should not be granted unless the taxpayers file returns and pay taxes. The second model stated that provisional credit could be granted to a taxpayer, but returns have to be filed within 3-4 months and taxes have to be paid or else the credit amount would be reversed. After consulting the stakeholders, the GoM earlier this month worked out a third model for return filing as per which credit could be extended once the invoice uploaded by the supplier is verified by the purchaser on the GSTN portal.

Jaitley had earlier this month asked Finance Secretary Hasmukh Adhia to “examine the possibility” of converting GSTN into a majority government company or a 100% government company. GSTN provides the IT backbone for the new indirect tax regime. Currently, five private financial institutions—HDFC, HDFC Bank, ICICI Bank, NSE Strategic Investment Co and LIC Housing Finance Ltd—hold 51% stake in GSTN, which was incorporated on 28 March 2013, in the erstwhile UPA regime. The remaining 49% stake is with the Centre and States.

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GSTN to be owned by govt? FinMin looking at issues related to proposal

GSTN to be owned by govt? FinMin looking at issues related to proposal

The Finance Ministry is examining various issues, including the overhaul ofGSTN procurement procedures and the salary structure of employees as part of the proposal to convert GST Network (GSTN) into a government company.

These two issues, along with other transitional and operational nuances, would be placed before the Union Cabinet for consideration once the GST Council clears the proposal of turning GSTN into a majority or fully-owned government entity, a source told PTI.

Finance Minister Arun Jaitley had earlier this month asked Finance Secretary Hasmukh Adhia to “examine the possibility” of converting GSTN into a majority government company or a 100 per cent government company. GSTN provides the IT backbone for the new indirect tax regime.

Currently, five private financial institutions — HDFC, HDFC Bank, ICICI Bank, NSE Strategic Investment Co and LIC Housing Finance Ltd — hold 51 per cent stake in GSTN, which was incorporated on March 28, 2013, in the erstwhile UPA regime.

The remaining 49 per cent stake is with the centre and states.

The current structure of GSTN where financial institutions hold the majority 51 per cent stake gives the entity flexibility in quick procurement through tendering process.

However, turning it into a government entity would mean that procurement — that currently occurs on a real-time basis — will have to be in sync with those of PSUs and state-owned companies, a source said.

Another aspect that would come into play could be salary structure. Currently, the employee remuneration is at par with those in the private sector, but transforming GSTN to a government entity would change that, the person privy to the development added.

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These issues are currently being discussed by the officials within the Finance Ministry, the source said, adding the ministry is hopeful of a seamless transition given that the goods and services tax (GST) collections have stabilised over the last 9 months and businesses are familiar with the systems.

The government stake in GSTN was initially kept at 49 per cent and incorporated as a private company to “allow adequate flexibility and freedom” to “ensure timely implementation of the IT infrastructure” prior to the GST roll out.

GST, which subsumed over a dozen local taxes, was rolled out on July 1, 2017. Over one crore businesses are registered on the GSTN portal.

GSTN is a Section 8 company under the new Companies Act and hence is a not-for-profit entity.

The source said that there are no hindrances from the private shareholders in selling their stake to the government because GSTN does not give dividend.

The Finance Ministry is in favour of making GSTN a wholly-owned company with 100 per cent shareholding, but a final call would be taken by the GST Council, headed by Jaitley and comprising state counterparts, in its next meeting.

After GST Council’s clearance, the proposal would go to the Union Cabinet.

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Source: PTI
FinMin clarifies on return filing by businesses opting for composition scheme

FinMin clarifies on return filing by businesses opting for composition scheme

The finance ministry (FinMin) today said traders who have opted for composition scheme need not file certain details in return form since the reverse charge mechanism is not yet functional.

The GST Council, headed by FinMin Arun Jaitley and comprising state counterparts, has kept the reverse charge mechanism in abeyance till June.

The ministry, in a statement, said doubts are being raised about the manner of filing the quarterly return by composition dealers in Form GSTR-4.

Press: Return Filing GSTR4
“Since auto-population of the details of the inward supplies, including supplies on which tax is to be paid on reverse charge is not taking place, taxpayers who have opted to pay tax under the composition levy shall not furnish the data in serial number 4A of Table 4 of Form GSTR-4 for the tax periods January, 2018 to March, 2018 and subsequent tax periods,” it said in a statement.

Businesses with the turnover of up to Rs one crore can opt for composition scheme under the Goods and Services Tax (GST) which was rolled out from July 1, 2017.

The scheme allows taxpayers to pay GST at a fixed rate of turnover and not to go through the tedious GST formalities.Under the reverse charge mechanism, registered dealers are required to make tax payments in case he procures goods from unregistered businesses.

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Source: ET
Finance Ministry to simplify GST profiteering complaint form

Finance Ministry to simplify GST profiteering complaint form

Finance Ministry to simplify GST profiteering complaint form

The Finance Ministry has simplified and reduced the number of columns in the complaint form to make it easier for consumers to report any profiteering activity by businesses post GST rollout.

The number of columns in the simplified single-page form have been slashed to 16, of which 12 fields are mandatory, to make it convenient for people.

The original profiteering complaint form, though a single page document, had about 44 columns seeking a number of details and half of those fields were mandatory.

In the new form the applicant has to give his name and address and contact details along with proof of identity. Besides, the name and address of the supplier too are to be provided.

Besides, the applicant has to state any goods or service for which the application is being filed as well as state the price value per unit and the MRP pre and post GST.

The applicant has to enclose evidence like copies of invoice or price list to prove that the benefit of tax rate reduction or benefit of input tax credit has not been passed on to consumers.

The move to simplify the form followed numerous representations received by the standing committee red flagging the complicated nature of the form.

Till January, as many as 170 complaints have been filed before the standing committee and the screening committee by consumers against businesses for not passing on benefits of tax rate reduction since the implementation of the Goods and Services Tax (GST) from July 1.

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While simplifying the form, it was kept in mind that a common man should be able to apply without the help of an accountant.

In the earlier form, the consumer has to specify the actual price or value charged per unit pre-GST and the same post GST. Also, the total tax per unit and the reduction in tax amount post GST has to be filled up by the complainant.

Details of pre-GST rates of excise duty, VAT, service tax, luxury tax charged by the businesses against whom the profiteering complaint is being lodged was also required to be filled up in the earlier form.

Self-attested copies of all documentary evidences like proof of identity, invoice, price list and detailed working sheet were required to be submitted while filing up the earlier form.

Also read: GST E-Way Bill – key pointers that you need to know

As per the structure of the anti-profiteering mechanism in the GST regime, complaints of local nature are first sent to the state-level screening committee while those of national level are marked for the Standing Committee.

If the complaints have merit, the respective committees refer the cases for further investigation to the Directorate General of Safeguards (DGS).

Once DGS submits its report, it is scrutinised by the Anti-Profiteering Authority for further action, which may include fine and extreme penalty like cancellation of registration.

25th GST Council Meet:Rates revised for 29 goods, 53 services, says Arun Jaitley

25th GST Council Meet:Rates revised for 29 goods, 53 services, says Arun Jaitley

25th GST Council Meeting

The GST panel, headed by Finance Minister Arun Jaitley and comprising representatives of all states, at its 25th meeting at Vigyan Bhawan today decided to reduce tax rate on 29 items and 53 categories of services with effect from January 25.

The major highlights of the meeting are:

1. Filing of GSTR 3B will continue, but a final decision would be taken in the next Council meet.

2. E-way bill system would be rolled out from February 1 and 15 states are on board for obtaining intra-state bill

3. The law review committee recommended to re-introduce reverse charge mechanism (RCM) only for dealers under composition scheme.

4. Rates of goods such as bio-diesel, packaged drinking water (packed in 20 litres bottle), drip irrigation system, mechanical sprayer, bio-pesticides, sugar boiled confectionery, etc. have been brought down to 12 percent from 18 percent.

5.Tax on sales of liquefied petroleum gas (LPG) by private firms for domestic use has been reduced to 5% from 18%.

6. Motor vehicle will now attract 18% tax from earlier 28%

7. Rice Bran will attract 0% tax from 5% earlier

8. Tax rate on velvet fabric has been reduced to 5% from 12%.

9. Tax rate on mining, drilling of natural gas has been reduced to 12%

10. Cess on vehicles for ambulance also reduced to 0% from 15% earlier.

11. The decision on inclusion of real estate in GST has been deferred.

12. In the services segment, the council will reduce taxes on transportation of crude, gasoil, gasoline, jet fuel and services relating to mining, exploration and drilling of oil and natural gas, among other things.

13. Diamonds and precious stones will now attract 0.25 percent GST instead of 3 percent, while vibhuti and de-oiled brown rice will attract nil tax.

14. The fitment committee will fix rates of 40 handicraft items

15. GST Panel also decided to divide Rs 35,000 crore IGST collections between centre, states

GST Council may in their next meeting decide requirement of filing only two returns i.e. GSTR 3B and GSTR 1 and may do away with GSTR 2 and GSTR 3.


Source: Times Now
Direct tax collection rises 18.2% in April-December: Govt

Direct tax collection rises 18.2% in April-December: Govt

Direct tax collection- GST

The government on Tuesday said that the direct tax collections has jumped by 18.2 per cent during the first nine months of current fiscal at Rs 6.56 lakh crore. Direct taxes are made up of income tax paid by individuals, wealth tax and corporation tax paid by companies.

The Finance Ministry on Tuesday put out a statement saying: “The provisional figures of Direct Tax collections up to December, 2017 show that net collections are at Rs. 6.56 lakh crore which is 18.2 per cent higher than the net collections for the corresponding period of last year.” The net direct tax collections represent 67 per cent of the total budget estimates of direct taxes for FY2017-18 (Rs 9.8 lakh crore), the statement said.

The gross collections have increased by 12.6 per cent to Rs. 7.68 lakh crore during April to December, 2017. And in the same period, the government issued a refund of Rs 1.12 lakh crore. According to the Finance Ministry, the collection of advance tax has also gone up.

“An amount of Rs 3.18 lakh crore has been received as Advance Tax up to December 2017, reflecting a growth of 12.7 per cent over the Advance Tax payments of the corresponding period of last year,” the Ministry said.

While the country’s direct tax collection has seen rise, the indirect tax collection has been on decline for the last two months. Last year in December, the government released the indirect tax collection data for November.

In November, the GST revenue stood at Rs 80,808 crore, down from over Rs 83,000 crore in the previous month. Even in October, the tax collections were not in expected line. The GST for October had slipped by almost 10 per cent to Rs 83,346 crore as compared to Rs 92,150 crore in September.

Last year in July, India overhauled its taxation system by introducing GST for indirect tax collections. The first month revenue under GST was over Rs 95,000 crore, however, in August the figure came down to Rs 91,000 crore. Decline in GST collections could be attributed to multiple factors such as compliance and tax rate adjustments.

In November, the GST Council brought down the taxes on over 200 goods by 10 per cent. As many as 178 items of daily use were shifted from the highest tax bracket of 28 per cent to 18 per cent. Reports suggest that the GST Council is expected to meet on January 11 to deliberate on latest downward trend in revenue collection.

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Source :  Business Today
India’s first post-GST budget process to begin next week: Here’s why Budget 2018 matters a lot to Modi govt

India’s first post-GST budget process to begin next week: Here’s why Budget 2018 matters a lot to Modi govt

Post GST Budget

Work on India’s first post-GST Union Budget 2018-19 will start next week with the finance ministry issuing timelines for different processes that will culminate with its presentation in February.

It may also be the current government’s last full-fledged Budget as general elections are due in 2019.

Even though independent India’s biggest tax reform of GST was implemented from July 1, the Budget for 2017-18 (April- March), had followed the practice of tax revenue projections under the heads of customs duty, central excise and service tax alongside direct tax numbers.

With excise duty and service tax being subsumed in the Goods and Services Tax (GST), the classifications will undergo change, an official said.

While a new classification for revenues to be accrued from GST will be included in the Budget for next fiscal, for the current year two sets of accounting may be presented – one for actual accruals during April-June for excise, customs and service tax, and the other for July-March period for GST and customs duty.

The official said that since the GST rates are decided by a GST Council, headed by Union Finance Minister and comprising of representatives of all states, the Budget for 2018-19 will not have any tax proposals concerning excise and service tax levies.

Only proposals for changes in direct taxes – both personal income tax and corporate tax, besides customs duty are likely to be presented in the Budget along with new schemes and programmes of the government.

This will be Finance Minister Arun Jaitley’s 5th Budget in a row.

It would also be the last full Budget of the BJP-led NDA government before the 2019 General Elections. As per practice a vote-on-account or approval for essential government spending for a limited period is taken in the election year and a full-fledged budget presented by the new government.

While P Chidambaram had presented the previous UPA government’s vote-on-account in February 2014, Jaitley had presented a full budget in July that year.

The official said the finance ministry will next week issue the Budget circular and start consultations with other ministries from October for Revised Estimates (RE) of expenditure for the current fiscal.

The Budget Circular contains the timelines for submission of information of budget requirements to the Ministry of Finance along with prescribed formats.

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The ministries will have to provide the actual money spent in 2016-17 along with the budget estimates and Revised Estimates for current fiscal.

Along with this, they have to give the Budget they are expecting for 2018-19 as well, the official added.

Scrapping a colonial-era tradition of presenting the Budget at the end of February, Jaitley had for the first time presented the annual accounts on February 1, 2017.

With the preponement of Budget, ministries are now allocated their budgeted funds from the start of the financial year beginning April.

This gives government departments more leeway to spend as well as allow companies time to adapt to business and taxation plans.

Previously, when the Budget was presented at the end of February, the three-stage Parliament approval process used to get completed some time in mid-May, weeks ahead of onset of monsoon rains.

This meant government departments would start spending on projects only from August-end or September, after the monsoon season ended.

Besides advancing the presentation date, the Budget scrapped the Plan and non-Plan distinction and merged the Railway Budget with it, ending a nearly century-long practice.


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Source :  Business Today