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FinMin simplifies GST refund claim process for businesses

FinMin simplifies GST refund claim process for businesses

Easing compliance burden for businesses, the Finance Ministry has said GST refund GST refundcan be claimed by simply submitting a printout of ‘GSTR-2A’ form to tax authorities instead of giving all purchase invoices of a month.

GSTR-2A is a purchase return auto-generated by the system based on the transaction between a business and its supplier.

“The proper officer shall rely upon form GSTR-2A as an evidence of the account of the supply by the corresponding supplier in relation to which the input tax credit has been availed by the claimant.

“…There may be situations in which Form GSTR-2A may not contain the details of all the invoices relating to the input tax credit availed, possibly because the supplier’s Form GSTR-1 was delayed or not filed.

“In such situations, the proper officer may call for the hard copies of such invoices if he deems it necessary for the examination of the claim for refund,” the Ministry said in a clarification.

In the clarification to Principal Chief Commissioners, the GST Policy Wing in the Ministry said the proper officer shall not insist on the submission of an invoice (either original or duplicate) the details of which are present in GSTR-2A of the relevant period submitted by the claimant.

The GST Policy Wing further said a few cases have come to notice where a tax authority, after receiving a sanction order from the counterpart tax authority (Centre or State), has refused to disburse the relevant sanctioned amount calling into question the validity of the sanction order on certain grounds.

“It is hereby clarified that neither the State nor the Central tax authorities shall refuse to disburse the amount sanctioned by the counterpart tax authority on any grounds whatsoever, except under sub-section (11) of section 54 of the CGST Act.

Also Read: Finance ministry notifies annual return forms under GST for 2017-18

“It is further clarified that any adjustment of the amount sanctioned as GST refund against any outstanding demand against the claimant can be carried out by the refund disbursing authority if not already done by the refund sanctioning authority,” the Ministry said.

AMRG & Associates Partner Rajat Mohan said it is clarified that the remedy for correction of an incorrect or erroneous sanction order lies in filing an appeal against such order. “Recipient officer cannot withhold disbursement of the sanctioned amount on any pretext,” he said.

Mohan said so far invoices relating to inputs, input services, and capital goods were to be submitted for processing of claims.

“Trade and industry felt that it is cumbersome and increases their compliance cost, especially where the number of invoices is large in an entity. It has now been decided that the refund claim shall be accompanied by a printout of FORM GSTR-2A of the claimant for the relevant period for which the GST refund is claimed,” he added.

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Source: Business Today
Finance ministry notifies annual return forms under GST for 2017-18

Finance ministry notifies annual return forms under GST for 2017-18

The finance ministry has notified annual tax return forms for businesses registered under the GST, in which details of sales, purchases and input tax credit (ITC) benefits accrued to them during 2017-18 fiscal have to be provided in a consolidated manner.

The ministry has notified annual return form for normal taxpayers (GSTR-9)Finance ministry notifies annual return forms under GST for 2017-18 and for composition taxpayers (GSTR-9A). The last date for filing the annual return forms is December 31.

The Goods and Services Tax (GST), which subsumed 17 different indirect taxes, was rolled out on July 1, 2017.

The annual return form for normal taxpayers has been divided into 6 parts with 19 tables which includes detailed information related to outward supplies, inward supplies, ITC availed, ITC reversed, ineligible ITC, particulars of demand and refund, HSN summary of outward supplies and HSN summary of inward supplies of the transactions declared in returns filed during the financial year ending March 2018.

Also information with regard to transactions related to financial year ending March 31, 2018 declared in return of April to September are to be declared in the annual return.

“Today government has accepted the long pending demand of industry and has notified annual return form for normal taxpayers(GSTR 9) and annual return form for composition taxpayers(GSTR 9A) in which detailed information has to be provided by businesses,” AMRG & Associates Partner Rajat Mohan said.

Also Read: Simple Guide of GSTR 9 with Easy Online Return Filing Process Eligibility & Rules

Also information with regard to transactions related to financial year ending March 31, 2018 declared in return of April to September are to be declared in the annual return, he added.

“This Annual return formats refers to computation of reconciliation of Tax credit claimed in GSTR 3B against credit available in GSTR 2A and IGST paid on import of supplies with the aim that Tax credit not availed till filing of return for September 2018 would lapse forever,” Mohan said.

While Part I of the form deals with basic information of the business, the details of all the supplies declared by the taxpayer in the returns filed during the financial year has to be filled in Part II of the return form in a consolidated manner.

Part III consists of the details of all input tax credit availed and reversed in the financial year for which the annual return is filed.

Part IV is the actual tax paid during the financial year.

Part V consists of particulars of transactions for the previous financial year but declared in the returns of April to September of current FY or date of filing of Annual Return for previous financial year (for example in the annual return for the FY 2017-18, the transactions declared in April to September 2018 for the FY 2017-18 shall be declared), whichever is earlier.

“This was quite an awaited Return format by the industry especially given the limited time frame for filing ie December 31st. While this development was awaited, the format of GSTR-9C, which is expected to include reconciliation with financials, attestation by auditor and other details is now being looked foward to by the industry, EY Tax Partner Abhishek Jain said.

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Source: Business Standard
Companies not passing benefits of GST cut rates to customers, govt plans to hike penalty

Companies not passing benefits of GST cut rates to customers, govt plans to hike penalty

Have the prices of regular use commodities come down after the government and the GST council slashed the tax for hundreds of items? GST cut ratesThe answer, according to the government, is a definitive no.

The government has substantive feedback that a large number of companies and businesses are not passing on the benefit to the consumers and are pocketing the extra tax charge as profit.

In an effort to curb profiteering, the finance ministry is considering an amendment in the GST law to penalize companies and businesses which have not been passing the rate cuts announced by the GST council to the consumers.

Presently, the penalty for such violations is Rs 10,000 or the amount of tax evaded, whichever is higher.

But, the violators may continue to benefit as the government is planning to bring the amendment next year.

The GST council, during the last meeting, discussed the rationale behind bringing the amendment. The amendment proposes the formation of a multi-ministry panel including officials from finance and law.

Sources said that the government has found that companies have not been passing the benefit of the tax cut or the input tax credit to the consumers, thus defeating the very purpose of tax cuts and other provisions.

Since GST was launched on July 1 last year, the GST council has slashed the levy on 384 goods and 68 services. The last phase of cuts included nearly 100 products and services on July 21.

GST Rate Inforgraphics
                              Data: GST council

Finance minister Arun Jaitley, in a blog on July 27, had mentioned that the net revenue loss which government has suffered on account of the reduction of tax on goods and services since the launch is approximately Rs 70,000 crore.

The government feels that since the Centre and states have taken a revenue hit, the benefits should go to the consumers instead of being picketed as profits.

Right now, most of the profiteering is going unchecked. It has been found that companies and businesses have some excuse to defend its failure to pass on the benefits of the tax cuts to the consumers. Some companies claimed that they can’t pass on the benefit as manufacturing cost has gone up.

Some companies have not passed on the full benefit and have given consumers partial relief in prices.

There are also allegations that post rate cut, some companies have lowered prices selectively.

There are different tactics being employed by companies to reap profits. Some companies have slashed prices on less popular large packs of a product but there is no reduction on the smaller packs. Others, manufacturing multiple brands of same products have reduced prices on some and not on others products.

A senior revenue department official said, “These are malpractices and they have to be stopped. For that, there is a need to create deterrents.”

Some companies have started blaming the price hike to the rising prices of fuels and rupee-dollar instability.

The government is worried as the refusal of the companies to pass on the benefits of the rate cut is leading to an inflationary trend.

Currently, the retail inflation is below 5 per cent; still, inflationary expectations are high because of higher fuel prices and declining rupee.

“Steps need to be taken to see inflation should not go up due to reasons which can be controlled domestically,” the official said.

The GST council had created the National Anti-profiteering Authority (NAA) to ensure that customers are charged the correct tax and assesses under GST do not indulge in rampant profiteering.

The authority is 4 tiered including NAA — the Directorate General of Anti-profiteering in the Central Board of Indirect Taxes and Custom (CBIC), a Standing Committee and Screening Committees in every state.

By this August, 32 screening committees have been set up, 29 in states and 3 in Union Territories (Delhi, Puduchery, and Chandigarh).

Based on complaints, the committees have passed an order in some cases and are now hearing over 130 cases. But the action is too little in comparison to violations taking place, sources in the government said.

Source :  India Today
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.