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More rate cuts likely at GST Council meet on September 28

More rate cuts likely at GST Council meet on September 28

A dip in revenues notwithstanding, the GST Council may decide to cut rates on more items this week to keep the consumption story going which typically slows in an election year despite a rise in government spending.

The 30th meeting of the GST Council will be held on Friday, September 28.Finance Minister Arun Jaitley, who will chair the meeting through video-conferencing, is expected to announce a further pruning of the peak 28% rate structure. Jaitley has prom…

Goods expected to see their way out of the 28% tax bracket include cement, certain automobile parts, digital cameras and certain categories of television sets, sources close to the development told DH. These may be placed under 18% or 12% slabs.

Cement is the only item of construction which remains under the 28% slab. Its removal from the highest bracket makes sense as construction activity, which slows during monsoon, is expected to pick up from next month.

After all, Jaitley believes GST has given a lot of purchasing power to consumers.

“There is no better opportunity for consumers to make purchases than in the environment which the GST has created. It is an opportunity to celebrate the biggest tax reform since Independence,” the minister said recently.

In the last last 14 months since GST was implemented, the council has slashed rates on 191 items from the 28% category. Originally, it consisted of 226 goods.

Apart from cement and automobile parts, tyres, automobile equipment, motor vehicles, yachts, aircraft, aerated drinks, betting and demerit items like tobacco, cigarette and pan masala remain in the 28% slab.

Even though the Centre has suffered a loss of about Rs 70,000 crore on account of reduction in tax on goods and services, the move has reduced the cost to consumers, increased purchasing capacity and added to the economy, Jaitley said.

The budgetary estimates of GST collections were more than Rs 1 lakh crore per month but the revenues have not met the target barring in April when collections topped Rs 1 lakh crore. However, the finance minister expects that the forthcoming festive season will give a boost to GST revenues.


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Source :  Deccan Herald
Streamlining of GST compliance fast becoming a long row to hoe

Streamlining of GST compliance fast becoming a long row to hoe

A slew of contradictory advance rulings by the various tax benches has made GST compliancethe already complicated world ofgoods and services tax (GST) more complex.

A bunch of varied interpretations of the GST law by different Authorities for Advance Ruling (AAR) on the same subject is the latest addition to compliance challenges for businesses. For instance, recently, the Maharashtra AAR said that the process of installing solar equipment would attract 18% GST, while the Karnataka bench ruled that a 5% rate would apply.

In another matter on taxing printed advertisement materials, the Telangana AAR and West Bengal AAR not only gave conflicting verdicts, but also used different methodologies to arrive at their conclusions. That litigation would escalate in the GST-era was already anticipated. However, the pace at which applications are being filed is alarming, considering that it has only been 15 months since GST has been implemented.

The latest report issued by the GST Council, on applications received and rulings passed by the states authorities for the advance ruling (AAR) revealed that 363 applications have been filed so far across India.

Of that, 224 applications were yet to be decided as on June 2018.

GST Council Report

As the chart alongside shows, Maharashtra tops the list with 68 applications, followed by Karnataka, Gujarat, Delhi and Tamil Nadu. Tax experts foresee this number rising in the months to come. Although there have been reports that the government may consider setting up either a centralized authority or four regional authorities, there is no clarity on the timeline as yet.

While setting-up of a National Appellate Authority is the need of the hour, what also needs to be taken care of is that there is a judicious mix of people from the revenue department and law officials for a balanced judgement, tax experts said. Here, the government needs to take a leaf out of the advance ruling system practised in the excise/sales tax regime, where the decisions given were fairly reasonable, they add.

A delay in sorting out this issue would result in further increase in the compliance cost for businesses and hamper the ease of doing business in the country—a key feature widely tom-tommed when introducing GST.


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Source : Livemint
TDS, TCS Provisions Under GST To Come Into Effect From Oct. 1

TDS, TCS Provisions Under GST To Come Into Effect From Oct. 1

The government has notified October 1 as the date for implementing the tax deducted at source and tax collected at source provisions under Goods and Services Tax  (GST) law.

TDS, TCS Provisions Under GST To Come Into Effect From Oct. 1

As per the Central GST Act, the notified entities are required to collect TDS at 1 percent on payments to goods or services suppliers in excess of Rs 2.5 lakh. Also, states will levy 1 percent TDS under state laws.

E-commerce companies will now be required to collect up to 1 percent TCS while making any payment to suppliers under the GST. States too can levy up to 1 percent TCS under State GST law.

“The e-commerce companies for TCS and various Government Companies for TDS would need to quickly gear up their ERP systems to comply with these provisions from 1st October,” said Abhishek Jain, Tax Partner at EY. “With audit reports as well being notified, the industry would now really need to buckle up, given the short time frame.”

Rajat Mohan, a partner at AMRG & Associates, said the government has notified operation of TDS provisions on payments made by government agencies and TCS provisions for specified e-commerce operators effective October 1, 2018.

“These twin provisions are expected to further deepen the penetration of tax authorities in the economy, and it is likely to carve out widespread tax evasion of not only indirect taxes but also direct taxes,” Mohan said.

The GST, which subsumed over a dozen local taxes, was rolled out on July 1, 2017. However, to make it simpler for businesses in the initial months of the rollout, TDS/TCS provisions of GST laws were kept in abeyance till June 30. Later on, it was deferred until Sept. 30, 2018.


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Source: Bloomberg Quint
September last month to fix GST return filing errors, claim credit for FY18

September last month to fix GST return filing errors, claim credit for FY18

September is crucial for taxpayers under the new goods and services tax (GST) regime, as it will be the final month for taxpayers GST Return Filingto claim credit for invoices issued in 2017-18 as well as to rectify errors in their tax return forms for the year.

GST was implemented on 1 July 2017, and with taxpayers still getting used to the new return filing system under this indirect tax regime, there have been instances of errors including incorrect or inflated claims of credit or in some cases under-reporting of tax credit claims. There are also instances of omissions in reporting of transactions. All these can be corrected in the September tax return form.

According to GST rules, if the taxpayer forgets to claim input tax credit for an invoice pertaining to FY2017-18, the time limit for availing it is the due date for the September 2018 returns. Similarly, if the taxpayer has missed reporting details of any credit or debit note issued in 2017-18 in the earlier monthly GST return forms, he can do the same only in this month’s tax returns.

Also, according to the rules, no rectification of error or omission in respect of the details furnished in the GST returns filed earlier in 2017-18 will be allowed later than the GST returns filed for September 2018 or furnishing of the relevant annual return, whichever is earlier.

Archit Gupta, founder and chief executive officer of Cleartax, said the September GST returns are significant for taxpayers and they need to make sure that the input tax credit is accurate. “Taxpayers will require advanced reconciliation algorithms so that potential notices are avoided,” he said.

Currently, taxpayers fill a GST return form 3B detailing total purchases and sales and GST return form 1 detailing outward supplies.

The GST Council is in the process of bringing out new tax return forms, which are expected to be rolled out effective 1 January 2019. These forms will give the tax authorities powers to detect tax evasion by cross-verification of claims made by suppliers and buyers through invoice matching.

Source :  Livemint
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
GST returns: New system unlikely before next elections

GST returns: New system unlikely before next elections

The roll-out of the new simplified return-filing system for the goods and services tax (GST), GST returns: New system unlikely before next electionswhich was to kick in from January 2019, may get delayed further and, most probably, beyond the tenure of the current government. According to sources, even though the Narendra Modi government wants to implement the system before the general election, that may not happen given the time needed to complete the elaborate testing procedures to make the system foolproof.

Officials have been asked not to precipitate a repeat of the glitches faced by the originally conceived triplicate returns system that has never been fully implemented. Since the January deadline for the new system — which will automatically produce monthly returns based on supply data uploaded and inward supplies accepted — is difficult to be met and the announcement of the election is expected by March, the government might have to reconcile with the need to defer it further rather than risk a problematic system close to elections, sources said.

Since the GST returns filing continues to be confined to the summary returns GSTR 3B (with which taxes are paid) and outward supply (GSTR-1), the crucial anti-evasion requirement of invoices matching is not being met. It is assumed this is one of the reasons for the continuing shortfall in GST collections.

“The fear is that even if a handful of people complain of the system’s potential shortcomings, it could be amplified disproportionately on the eve of impending elections,” a government official said on condition of anonymity.

According to the implementation plan, a prototype of the software would be first deployed. This would be followed by release of the beta version of the final software, open for a few taxpayers to use in the real-world environment. However, sources said, the entire cycle could take six to eight months from now.

“We are planning to first release a prototype of the software, which would be connected to a small server. This would then be taken to various industry bodies and tax practitioners for them to use, an essential element to find bugs in the system that can be rectified,” an official said.

He added that it was essential that the new system is exposed to real taxpayers and tax practitioners to make it robust. This is a learning from the (failed) earlier system, which was tested in-house robustly but wasn’t tried by real taxpayers. This had resulted in constant firefighting to resolve glitches after the system went live.

“After the format for the new system was approved by the GST Council, the GST Network has started working on its implementation,” a tax official involved closely with drafting the new system said.

The GST Council in August had approved the format of the new design which promises to be lot less cumbersome for assessees than the original system that required filing three returns every month. In the new system, there will be a facility for sellers to continuously add invoices and for buyers to view them. The system could allow the buyer to lock the invoice after which the seller can’t edit/delete it, making it a confirmed liability of the seller.

Source : Financial Express
MSMEs seek simpler GST return system

MSMEs seek simpler GST return system

Micro and small entrepreneurs (MSMEs), who function from the Sidco industrial estate near the city, MSMEs seek simpler GST return systemhave sought that the Central government make the mechanism forreceiving returns for GST simple. Currently, they have to fill about three forms and the process is cumbersome, they said.

Members of the Coimbatore Sidco Industrial Estate Manufacturers Association (Cosima) on Thursday said this in a release, along with other resolutions of the annual general meeting held recently.

S Surulivel, president of Cosima, told TOI that instead of filling multiple forms, if they were asked to fill only form GSTR–3B, it would be easier for them.Also, GST payments should be made quarterly for MSMEs.

The association also sought that the electricity tax and fuel be brought under GST.


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Source :  The Times of India
GST Council may propose inclusion of ATF under GST in its next meeting

GST Council may propose inclusion of ATF under GST in its next meeting

Giving in to demand from the airlines, the GST Council may propose to bring Aviation Turbine Fuel (ATF)he GST Council may propose to bring Aviation Turbine Fuel (ATF) under GST in its next meeting. The airlines have been demanding this for some time now. under the indirect tax regime in its next meeting.

The aviation ministry has been pitching for inclusion of ATF in the goods and services tax regime, stating that the move will help cut the cost as airlines would get input tax credit.

Sources told that it will be easier to bring various states on board regarding inclusion of ATF in GST. Assam and Odisha have already extended their support for the proposal, sources said.

ATF constitutes approximately 35-40 percent of operational cost of an airline in India.

Also Read: Petrol Should be Brought Under GST, Reiterates Dharmendra Pradhan

Airlines, which are making a persistent demand for this, maintain that they would get an annual relief of Rs 3,000 to Rs 5,000 crore if ATF is included in GST.

Civil aviation secretary RN Choubey had recently stated that the matter will be taken up with the finance ministry as jet fuel prices have risen 40 percent since January, 2017. Airlines could expect an annual relief of up to Rs5,000 crore by way of input tax credit if the ATF is brought under the GST. The move could cushion them from the burden of increased jet fuel prices, besides providing relief to customers, a PTI report had said.

Source: Zee News
Cheering numbers: GST imparts a big push to Income Tax base

Cheering numbers: GST imparts a big push to Income Tax base

A spectacular 53% increase in the number of income-tax returns filed electronically till July 31 has given the government renewed hope of continued high-paced growth in compliance and taxpayer base, even 21 months after demonetisation. Cheering numbers: GST imparts a big push to Income Tax baseThe goods and services tax (GST), launched in July 2017, seems to have contributed to the government’s project to expand the I-T base to a much higher degree than the note ban itself. According to official data, e-returns of 3.43 crore were filed between April 1 and July 31, 2018, compared with 2.24 crore in the year-ago period. Last year saw one of the sharpest increases (28%) in total I-T returns — electronic and otherwise — to 6.74 crore (returns mostly pertaining to 2016-17, the demonetisation year) although the growth in e-returns by the initial deadline of July 31 was a just 18%.

The effective assessees rose an unprecedented 27.5% to 8 crore in 2016-17 and direct tax buoyancy rose sharply from 0.6 in 2015-16 to 1.3 in 2016-17 and 1.9 in 2017-18. While all these bear out the how the note ban helped expand the tax base, the latest spurt in e-returns indicate the trend is not only being sustained but accelerated. In the last week of July, the government extended the deadline for filing I-T returns by a month to August 31 after a section of taxpayers and tax practitioners sought more time to comprehend the changes made in return forms. Economic Survey 2017-18 had noted that the total number of “new taxpayers” in the 13 months since demonetisation (November 2016-November 2017) were 10.1 million compared with an average of 6.2 million in the preceding six years.

It estimated additional taxpayers of about 1.8 million due to demonetisation-cum-GST, roughly 3% of the taxpayer base that existed before. The I-T department in its central action plan for the current fiscal has set a target of adding 1.25 “new taxpayers” (those haven’t paid/filed taxes earlier). While the effective assesseee base (filers and TDS cases) expanded by a whopping 1.7 crore in 2016-17, the surge in e-returns has brightened the chances of a similar or higher rise in the base for 2017-18.

The 2018-19 budget estimate for growth in direct tax collections is 14% over the previous year when the collections were Rs 10.05 lakh crore. In the April-June quarter, a sum of Rs 1.52 lakh crore was collected, a growth of just 7.7% over the year-ago period.

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Source :  Financial Express
SC upholds HC decision on ‘Form C’ availability after GST

SC upholds HC decision on ‘Form C’ availability after GST

The Supreme Court has upheld the decisionSC upholds HC decision on ‘Form C’ availability after GST of the Punjab and Haryana High Court that Form – ‘C’ should be made available to an assessee even after implementationof the goods and services tax (GST).

A Bench led by justice Ranjan Gogoi, while dismissing a Haryana government’s appeal, observed that “if you (Haryana government) poke industries like this, they will run away”.

The issue before the court was whether after the amendment to the Central Sales Tax Act, 1956, power company Caparo Power was entitled to be issued ‘C’ Forms in respect of natural gas purchased from Gujarat-based BPCL and IOC in the course of inter-state sales for generation of electricity.

The HC held that the sale tax law as defined in Section 2(i) of CST Act will mean the law for the time being in force in any state for levy of taxes on sale and purchase of goods. It further ruled that the definition is inclusive, and not restrictive, hence will include the HGST Act 2017 as well.

Form C is issued by a purchasing dealer to a selling dealer to avail of the benefit of the concessional rate of CST. The objectives of providing benefit vide C Form are to negate effect of high rate of taxation and to safeguard the consumers’ interest.

The Haryana government in its appeal said Caparo was not engaged in re-selling of these goods and its registration under the CST Act lapsed on the commencement of the HGST Act. So, the company was not entitled for Form C. It further said the provisions of the CST Act would apply only if it sold the same goods that it had purchased (natural gas).

However, the HC said the CST Act does not restrict the usage of Form C only for the purpose of resale, but can be used for resale, manufacture, processing or generation/distribution of electricity.

Caparo had challenged the Haryana government’s refusal to issue ‘C’ Forms on the grounds that there had been no change of law with regard to inter-state sale of natural gas in pre-GST or post-GST.

Stating that inter-state sales are outside the domain and control of any state, counsel Ankur Saigal, who appeared for Caparo, argued that the issuance of Form C is under CST Act and not under HVAT Act and the state government is only the implementing agency and has no discretion to refuse the Form C if all the conditions are satisfied, as the issuance of Form C does not impact purchasing dealer state’s revenue.

Source :  Financial Express