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GST rate cut may make metro rail project cheaper

GST rate cut may make metro rail project cheaper

In a move that may lead to a considerable decline in Mumbai Metro project cost, the state government GST rate cut may make metro rail project cheaperhas asked for a rebate from the contractors handling the project following a change in tax rate under the goods and services tax (GST).

Under the new indirect tax regime, the GST on construction cost has been reduced to 12% from 18% earlier.

Recently, during a meeting held between Mumbai Metropolitan Region Development Authority (MMRDA) — Government of Maharashtra body that is responsible for the infrastructure development of the Mumbai Metropolitan Region — and companies executing metro rail projects, one of the issues being discussed was that the government agency had asked for a rebate in construction cost as the GST applicable has now been reduced from 18% to 12%.

A good 6% fall in tax liability will thereby make the metro rail project cost cheaper.

However, during the meeting the contractors told the officials that they will not be able to extend the entire 6% of the difference, sources from MMRDA said.

In order to find “an amicable” solution or clarification on the subject, a meeting was arranged with GST Commissioner, Maharashtra.

A few weeks back, a meeting was held at GST Bhavan between MMRDA officials, the GST Commissioner and construction firm representatives.

During the meeting, the GST Commissioner explained to the contractors that the difference of rebate has to be extended to the government agency.

“However, the difference has to be arrived at after, either, the internal auditors or independent auditors scrutinise the bills submitted by the private parties on work undertaken for the project. It is only after going through the input tax credit, under what (composite or any other) scheme of GST the construction firm is paying taxes, etc., the actual rebate can be arrived at,” said a source after referring to GST Commissioner’s communication.

Usually the infrastructure project costs tend to rise during the completion stage, but in this case despite a spike in cost, a certain percentage will get absorbed if the rebate is offered.

In August 2016, work was awarded for 18.60 km long Dahisar East-DN Nagar Metro 2A for which the estimated project cost on completion was Rs 6,410 crore.

Similarly, for the 16.50 km long Dahisar East-Andheri East Metro 7 route, the estimated completion cost was Rs 6,208 crore.

Seeking Rebate

In a meeting, the contractors said they will not be able to extend the entire 6% rebate

Under the new indirect tax regime, the goods and services tax on construction cost has been reduced to 12% from 18% earlier

Source :  DNA
GST revenues surpass Rs.1 trillion in April

GST revenues surpass Rs.1 trillion in April

GST revenues

The Centre on Tuesday stated that the revenue collected towards Goods and Services Tax (GST) for the month of April 2018, surpassed the Rs.1lakh crore mark.

As per the Ministry of Finance, the total gross GST revenues collected in the month of April stood at Rs.1,03,458 crore, consisting of Central GST (CGST) worth Rs.18,652 crore, State GST (SGST) of Rs.25,704 crore, Integrated GST (IGST) of Rs. 50,548 crore (including 21,246 crores collected on imports) and cess of Rs.8554 crore (including Rs.702 crore collected on imports).

Furthermore, the ministry noted that a total of 60.47 lakh GSTR 3B returns were filed for the month of March, as on April 30, as against 87.12 lakh, who are eligible to file returns for March, thus accounting for 69.5 percent of the eligible proportion.

Meanwhile, out of 19.31 lakh composition dealers, the ministry said 11.47 lakh filed their quarterly return (GSTR 4) (59.40 percent) and paid a total tax of Rs.579 crores, which is included in the aforementioned figure of total GST collected.

“The buoyancy in the tax revenue of April reflects the upswing in the economy and better compliance. However, it is usually noticed that in the last month of the financial year, people also try to pay arrears of some of the previous months. Therefore, this month?s revenue cannot be taken as a trend for the future”, the ministry clarified.

The department further noted that the Central and State Governments earned a total revenue of Rs. 32,493 crore for CGST and Rs. 40,257 crore for the SGST respectively, after settlement in the month of April.

Last week, the Finance Ministry said Rs.7.19 lakh crore was mobilized from the GST during the period of August 2017 to March 2018. This includes Rs. 1.19 lakh crore of CGST, Rs. 1.72 lakh crore of SGST, Rs. 3.66 lakh crore of IGST, including Rs. 1.73 lakh crore on exports, and Rs. 62,021 crore of cess, including Rs. 5702 crore on imports.

GST collection for the FY 2017-18 stood at Rs 7.41 lakh crore

GST collection for the FY 2017-18 stood at Rs 7.41 lakh crore

Collections from the levy of the Goods and Services Tax (GST) stood at a provisional 7.41-lakh GST: GSTNcrore for the year ended March 31.

The GST regime was rolled out on July 1, 2017, and therefore the total tax mop-up pertains to the nine-month period from July 2017 to March 2018.

A statement from the Finance Ministry said the total GST revenue collected between August 2017 and March 2018 was 7.19-lakh crore. “For (these) eight months, the average monthly collection has been 89,885 crore,” the statement said.

Thise collection includes 1.19-lakh crore of Central GST, 1.72-lakh crore of State GST and 3.66-lakh crore of Integrated GST.

The Integrated GST collections include the 1.73-lakh crore tax on imports and 62,021 crore of cess.

Commenting on the collections, Abhishek A Rastogi, Partner, Khaitan & Co, said, “The collection is below target as rate cuts were announced in the recent past and various refunds in the case of export and other cases have also been cleared. It is hoped that the compliance level will improve further and all the assessees registered will start paying taxes, thereby leading to improved GST collections in the new financial year.”

The SGST collection during the year, including the settlement of IGST, has been 2.91-lakh crore and the total compensation released to the States 41,147 crore.

The compensation is to ensure that the revenue of the States is protected at the level of 14 per cent over the base-year tax collection in 2015-2016. “The revenue gap of each State is coming down over (the) last eight months. The average revenue gap of all States for last year is around 17 per cent,” the statement added.

The Finance Ministry also noted that there has been “a progressive improvement” in the compliance level observed during the course of the year.

In July 2017, the portion of GST returns filed on time stood at 57.69 per cent. This improved to 66.81 per cent by December 2017 but dipped to 62.63 per cent in March 2018.

The cumulative compliance levels (percentage of returns filed till date) for initial months has crossed 90 per cent and for July 2018, has reached 96 per cent.

“There are State-wise variations in the compliance level observed till due date. However, including delayed filings, the State-wise compliance levels converge over a period of time,” the Finance Ministry statement added.

Parag Mehta, Partner at NA Shah Associates LLP, said, “Currently, there is stability in law for the past three months and the compliance level has also increased.”

With the GSTN system working smoothly and no hindrances for generating e-way bills, the compliance level should increase further, he added. “With many States also introducing the intra-State generation of e-way bills for movement of goods, evasion is bound to reduce and increase the revenue.”

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Source: The Hindu business line
Govt made 376 changes related to GST in 10 months: Export promotion council for SEZs

Govt made 376 changes related to GST in 10 months: Export promotion council for SEZs

The government has made 376 changes in the Goods and Services Tax (GST) since its inception in July last year by amending rules, issuing clarifications and circulars related to refund, the exemption and rates, Export Promotion Council for EOUs & SEZs (EPCES) has said.gst seva kendra

“The government has made 376 changes to the tax system by issuing circulars and coming out with clarifications about change in rates or exemptions,” said Vinay Sharma, chairman, EPCES at an open house meeting with exporters to discuss issues related to GST.

Of these, 73 changes are related with the exemption and 65 with rates.

Exporters flagged concerns related to refunds, exemption of GST, classification of Goods and services and place of supply for service exports and GST Network at the meeting.

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Complaining that delay in GST refund has blocked their working capital, exporters have claimed that over 60% of their refunds are stuck with the government. The government has sanctioned GST refunds to exporters to the tune of Rs 17,616 crore till March.

They also discussed the option for SEZ units to claim a refund of the GST charged by suppliers. At present, a supplier can provide goods and services to units in SEZ under a legal undertaking or LUT without payment of IGST, alternately they can reclaim the refund. Many suppliers do not want to go for LUT or refund process and charging GST in their invoice which is a cost burden for SEZ Unit. Under the existing law, there is no option for SEZ unit to claim the refund of the same.

“We have also suggested treating SEZ as outside India (deemed foreign territory) for the purpose of the place of supply rule under IGST for service export,” Sharma said.

Exporters also said that the rules are in English which makes it difficult for those who are not well versed with the language to understand and comply with the norms, especially in far-flung areas.

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Source: ET


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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Telangana State tops in GST collection

Telangana State tops in GST collection

The State has achieved another distinction as number one in the country in terms of tax collection under the  GST (Goods and Services Tax) regime.GST: direct tax collection

The State had successfully brought down the revenue gap in GST collections to 2.4% by the end of the financial year 2018 from 27.8% witnessed during July 2017, the month when the GST regime was put in place.

Union Finance Secretary Dr.Hasmukh Adhia addressed a letter to the State government, congratulating it on the achievement. The Union official hoped that the State would soon become revenue-surplus from the present revenue-deficit status.

Mr. Adhia said the performance of GST collection was improving with some ups and downs. The overall revenue gap in the country which was 28.3% in July came down to 17.9% in March. There have been spikes in the revenue gaps in November, December, and February. It was important to bring down the revenue gap figure steadily with better compliance and supervision, he said.

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Source :  The Hindu
GST: Sushil Modi-led GoM approves new single-page return

GST: Sushil Modi-led GoM approves new single-page return

A ministerial panel chaired by Bihar deputy chief minister Sushil Modi Sushil Modi : GSThas worked out a new simplified model for goods and services tax (GST) return filing as per which input tax credit could be given on a provisional basis once the supplier uploads the sales invoice. However, the current system of filing the interim return GSTR-3B while paying the tax might continue till a new single-page return is endorsed by the GST Council. The GSTR-3B was to replaced with more comprehensive returns with details

of inward and outward supplies post-June. The idea was to have system of invoice-matching without complexities. The group of ministers (GoM) on Tuesday met about 40 industry representatives and 15 tax experts to discuss simplification of the return filing process.

Meanwhile, six more states — Bihar, Haryana, Jharkhand, Madhya Pradesh, Tripura and Uttarakhand — will launch the electronic way bill (E-Way Bill)  mechanism for intrastate movement of goods above a threshold value from April 20. This means that including the five states that had launched the system on Sunday (Andhra Pradesh, Gujarat, Kerala, Telangana and Uttar Pradesh) and Karnataka which had it running even earlier, 12 states will have the anti-evasion measure rolled out by April 20. The e-way bill system, which allows tracking of consignments with a value above Rs 50,000 beyond 10 km, was rolled out for interstate transport on April 1.

While bulk of the GST assessee base of over 1 crore are yet to register for the e-way bill, the implementation of the system has been rather smooth so far. As many as 10.31 lakh e-way bills were generated on the portal on Monday, out of which 2.60 lakh were at the intrastate level. The e-way bill system is expected to plug revenue leakages of `10,000 crore in business-to-consumer transactions. After the crash in February, the GST Network system was augmented to generate 75 lakh e-way bill a day. Nine states have generated 82% of the total e-way bills so far. Gujarat topped the list of states for intrastate e-way bill generation, followed by Karnataka and Maharashtra.

An earlier model of return filing proposed that input tax credit could be availed simply by uploading of invoices by the seller and subsequent confirmation by the recipient. Based on acceptance by the recipient, the credit could be finalised. Another model was simultaneous uploading of sales/purchase data wherein the buyer would be able to avail credit on filing of purchase details at the invoice level; the taxpayer had to match only data under the mismatch category. As against these, what is being planned now is a third fusion model, under which credit could be extended once the invoice uploaded by the supplier is verified by the purchaser on the GSTN portal. Also, system-based notices may be issued to taxpayers for non-payment of taxes even after availing credit and the credit could be reversed.

“It’s good to see wider consultation with industry bodies and experts on the returns simplification process. Clearly, the government wants to implement the revised system after adequate due diligence this time. However, this process may take some time with possible changes in laws. It seems the new GST returns may only be introduced either in the last quarter or the next year,” said Pratik Jain, leader, indirect tax, PwC. Modi said there was unanimity in the GoM that businesses would have to file only one return every month, instead of GSTR-1, 2 and 3 as was conceived earlier.

Also there was unanimity that there would be no system-based matching and the purchaser would have to verify the invoice uploaded by the seller. Modi said the model for simplified return filing that is being worked out would safeguard the interest of revenue to the exchequer, and avoid inconvenience to taxpayers. “Till then, it’s likely that the current summary return (GSTR 3B) on a monthly basis will continue,” said Jain.

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Source :  Financial Express
Indian economy has recovered from the impact of demonetisation, GST: World Bank

Indian economy has recovered from the impact of demonetisation, GST: World Bank

As per the World Bank South Asia Economic Focus Spring 2018 report, World Bankthe Indian economy has recovered from the impact of demonetisation and the introduction of the Goods and Services Tax (GST)  regime and is projected to grow by 7.3 percent in 2018 and 7.5 percent in 2019.

India’s growth is expected to drive South Asia’s growth rate to 6.9 percent in 2018 and 7.1 percent in 2019.

The South Asia Region in this World Bank report includes Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka.

Key Highlights of World Bank Report:

• Yet again, South Asia is the fastest growing region in the world and the rebound was led by India, whose growth rate accelerated in the second half of 2017.

• The region experienced the increase in inflation, however, this rise in inflation aligned with other regions. Besides, the inflation rates of most countries in the region remain near or below inflation targets.

• The trade deficits of the three biggest South Asian countries have widened.

• Around 80 percent of the South Asia region’s Gross Domestic Product (GDP) is generated in India.

• The manufacturing sector showcased signs of recovery in the last quarter of 2017 with the industrial production growing by 4 percent in the region.

• The increase in inflation in South Asia was majorly driven by accelerating monthly price increases in India in recent months. Inflation in India increased from 1.5 percent in June 2017 to 3.6 percent in October 2017, to 5.1 percent in January 2018 and to 4.4 percent in February 2018.

• Despite firm global recovery, exports remained relatively dull throughout the region, while imports grew rapidly. Export growth has been positive in India, Sri Lanka and Pakistan. However, the overall export growth in the region was lower than overall economic growth.

• Foreign direct investment (FDI), despite being unstable in the short-term, has been on an upward trend across the whole of South Asia. Both India and Sri Lanka saw their FDI increasing very strongly.

• The entire region experiences the job creation challenge. The low employment rates in South Asia are attributed to less female participation in the region in comparison with the other regions. In India and Pakistan, the gap between the actual and predicted employment rate is close to 30 percentage points.

India’s recovery from the impact of demonetization and GST

India’s growth decelerated during the most of 2016. The withdrawal of currency from circulation (demonetisation) in November 2016 and the introduction of the Goods and Services Tax regime added to the slowdown in the economy.

Both these economic measures created short-term disruptions in economic activity. Considering the increase in inflation rate and fall in real interest rates, India instilled major changes to boost Indian economy including a recapitalization plan for banks. Subsequently, the growth rate bounced back to 7.3 percent.

Job Creation Challenge in India

Despite economic rebound, job creation remains a matter of concern in India. India has been tasked to create 8.1 million jobs each year to maintain its employment rate; however, the rate has been declining largely due to less women participation in the job market.

Women were dropping out of the job market in areas between rural and urban regions, where farming jobs had vanished, but other job opportunities had not been created yet.

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Source :  Jagranjosh
GST to enter Class X ICSE syllabus from 2020

GST to enter Class X ICSE syllabus from 2020

The goods and services tax (GST) is set to make its way into textbooks. The ICSE board has decided to do away GST to enter Class X ICSE syllabus from 2020with the component on value added tax and replace it with GST in the Class X mathematics syllabus.

The Council For Indian School Certificate Examinations (CISCE) said the segment on VAT carrying four to six marks will be replaced with GST from 2020 as the earlier tax regime has been discontinued. The decision on introducing the new chapter was taken last year.

“Since VAT serves no purpose, it has been discontinued. Students who will be promoted to Class X in 2019 will be offered the new chapter and will be tested on it in 2020,” said Sujoy Biswas, principal of Rammohan Mission School.

But students who will appear in the ICSE exam in 2019, will not have to study either VAT or GST.

Nabarun De, principal of Central Modern School in Baranagar added, “The Council is always in favour of upgrading syllabus in the light of current happenings.”

Senior mathematics teachers pointed out that students who will pursue commerce or have commercial activities in mind will benefit from the change. “Even for a layman, it is important to understand the intricacies of GST. The change will help students learn the present indirect tax structure of the country,” said a school principal.

The National Council of Educational Research and Training (NCERT) has decided to include the topics related to GST and demonetisation in the existing syllabus of subjects, such as economics, business studies, accountancy, and political science, minister of state for human resource and development Upendra Kushwaha had informed the Rajya Sabha in August last year. He had added that while publishing the reprinted editions of their textbooks for the academic year 2018-19, NCERT will make the changes.

The reprinted editions of the NCERT books has been updated and relevant issues included. Most CBSE affiliated schools and Kendriya Vidyalayas follow the NCERT curriculum.

Assam Board has introduced GST from the Class XII curriculum while UP Board has decided to include GST in Class X syllabus.

“GST is a new introduction to the country’s tax structure. It is an important topic that is being introduced in MBA programmes, CA, costing and other professional higher study courses. If students have a strong base on the topic then it will help them to learn the topic at higher levels. Directly or indirectly, GST plays a role in our everyday life,” said Vivekananda Mission School principal Sarmistha Banerjee.

In a circular sent to all school heads on Friday, CISCE secretary and chief executive Gerry Arathoon wrote that VAT has become obsolete and has been replaced with GST from the ICSE 2020 Mathematics syllabus. “Considering the above facts the schools are being informed that VAT will not be tested in the ICSE 2019 mathematics syllabus,” reads the circular.

West Bengal Board of Secondary Education (Madhyamik) and West Bengal Higher Secondary Council (HS) are however tight-lipped on introducing GST. Sources said though GST is a revelant topic, it was unlikely to be introduced in either Class X or XII. “A state government directive is mandatory for bringing any change in the syllabus. With the state and centre being at loggerheads, any such decision is hard to be implemented,” a Madhyamik Board source said.

The syllabus which will be taught to the students from the 2019 -2020 academic session is likely to highlight the issue of demonetisation. “Students are still not aware of demonistisation. Introduction of GST in the syllabus will give students a brief idea about the newly introduced tax reforms,” said a teacher. “The ‘one nation one tax’ concept too will be much easily taught,” said another principal.

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Source :  The Times of India
After e-way bill, government eyes tools to check GST evasion

After e-way bill, government eyes tools to check GST evasion

After deciding to mandate the use of E-Way  Bill to track the movement of goods within five states Andhra Pradesh, Gujarat, Kerala, Telangana and Uttar Pradesh from next week,e-way bill the government is working to introduce other anti-evasion tools to shore up the collection of GST, where it suspects massive leakage is taking place.

On Tuesday, the finance ministry said that intra-state movement of goods in 5 Staes — which account for 61% of the inter-state e-way bill generation — will require the electronic tool from April 15 as part of the planned expansion. E-way bill had become mandatory for movement of goods valued over Rs 50,000 from one state to another at the start of the month.

Sources said in the coming days, the states are planning to step up checking of e-way bills as they suspect that they are losing a large amount of revenue.

Also Read – GST E-way Bill: Objective, Features, and Benefits

On April 16, a committee headed by Bihar deputy CM Sushil Modi will deliberate on ways to reintroduce the reverse charge mechanism, a key anti-evasion tool that was suspended in the wake of protest from traders.

Reverse charge is to be paid by registered GST payers on behalf of small suppliers, who are exempted. The registered dealer or the buyer, who has to pay GST under reverse charge, has to undertake self-invoicing for purchases. While it keeps small businesses out of the tax ambit, SMEs complain that the cost is borne by them and this makes their businesses unviable, although officers believe that the motive behind resistance to blocking reverse charge mechanism is to evade taxes. The government will pay credit to traders against the reverse charge.

“Even under VAT, many states had the tool. But given the concerns we will look at options to ensure that businesses are not impacted and remain viable,” said a finance ministry official. One option is to increase the threshold of daily transactions to keep several small businesses out.

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Source: TOI