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Realtors seek clarity on GST exemption on development rights 

Realtors seek clarity on GST exemption on development rights 

Mumbai: Realty developers are seeking clarity on recent exemption offered from the goods & services tax (GST) levied on development rights, including transferable development rights (TDRs), development rights certificates (DRCs) and joint development agreements (JDAs).

Realtors’ body, the National Real Estate Development Council (NAREDCO), has written to the Ministry of Housing and Urban Affairs seeking clarity on this.

Last Sunday, the GST Council proposed that intermediate tax on development rights will be exempted only for such residential projects on which GST is payable.

The government decided to more than halve the GST rates for under-construction projects to 5% from 12%. The GST Council removed the input tax credit, while GST on affordable housing was reduced to a marginal 1% along with expanding the definition of such homes. Ready properties that have received occupancy certificate (OC) do not attract GST.

“What if some units are being sold after the project is completed? Being a completed project that has already received an occupation certificate, it will not attract GST. Will the JDA or TDRs used in this project still attract intermediate tax? We need to get clarity on this,” said Niranjan Hiranandani, national president, NARDECO.

The ministry has already announced that details of this scheme will be worked out by an officers committee and will be approved by the GST Council in a meeting to be called specifically for this purpose soon.

As the details of the scheme are yet to be worked out by an officers’ committee, the developers’ body has sought to make a representation to avoid confusions or litigations later on. NAREDCO is of the view that the condition to be fulfilled to receive the tax exemption — “only for such residential projects on which GST is payable” — may lead to litigations.

In its letter to the ministry earlier this week, the developers’ body has cited instances that can lead to confusion and litigations. These examples include that of a residential project with convenience and retail shops, smart and integrated townships tagged as mixed-use development, and sale of residential units post completion of the project.

The NAREDCO representation is that the wording should be: “Tax on development rights, such as TDR/ JDA, long-term lease (premium), FSI shall be exempted”. Effectively, there should be no levying of ‘intermediate tax’ and the exemption should not be restricted to just ‘residential property’, but to all segments and types of property including commercial.

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Source : economictimes.indiatimes.com
Taxpayers Alert! Check out these 8 new features at GST Portal: Here’s how easy GSTR filing gets for you

Taxpayers Alert! Check out these 8 new features at GST Portal: Here’s how easy GSTR filing gets for you

TDS/TCS Credit available for utilization

A new window has been enabled for claiming TDS/TCS credits. The taxpayer has the option of accepting or rejecting the TDS/TCS credits available and filing their return, after which the credits get transferred to the cash ledger and can be used for making GST payments.

This facility helps taxpayers easily identify such credits and take action accordingly.

E-way bill data can be imported for GSTR-1

The E-way bill (EWB) and the GST portal has now been integrated. The same gets automatically imported for the B2B and B2C (large) invoices sections as well as the HSN-wise-summary of outward supplies section. Users only need to verify the data and proceed.

This has definitely saved both time and effort for a business person, as it avoids unnecessary data-entry. However, many businesses were performing this sort of reconciliation themselves using smart tools to ensure accuracy of data.

List of preferred banks available for making payments

A taxpayer can choose from a list of 6 preferred banks that will be auto-saved at the time of making payments. If he makes payment through a 7th bank account, the same will get added, and the least used bank account will get removed. He has the option to delete the bank accounts at any point in time.

With this feature in place,the taxpayer need not enter bank details every time, as he can simply select a bank with the click of a button and proceed to make payment.

Refund applications can be filed monthly for quarterly filers

There is good news for taxpayers opting to make payments on a quarterly basis. They now do not have to wait for the quarterly filing of refund applications, as the same can be done monthly. However, a prerequisite for the same would be to ensure that GSTR-1 for the quarter has been filed.

This will definitely help mobilise the working capital flows of business as there is no longer a need to wait till the end of a quarter to apply for a refund.

Appeals can be filed online and system-generated acknowledgment will be issued

A taxpayer can file an appeal against an order passed by an appellate authority, or against an advanced ruling by an appellate authority on the GST portal. He even has the option to file an application with the appellate authority in the case of rectification of a mistake in order passed.

In the event of an appellate authority failing to issue a final acknowledgment within the stipulated time, then a system generated final acknowledgment will be issued with the remark “subject to validation of certified copies”. This has simplified the process of filing appeals and also helps to track the status of the same.

Composition taxpayers can reply to SCN online for compulsory withdrawal

For composition taxpayers, there is a simpler way to reply to show cause notices(SCN) now. This is in the case of a show cause notice being issued for compulsory withdrawal from the composition scheme, and if proceedings are initiated against the composition taxpayer, he now has the option to reply to show cause notices on the portal.

Bank account details not mandatory at the time of registration

Declaring bank account details are now optional at the time of registration for Normal, OIDAR and NRTP taxpayers. Previously, this was a mandatory requirement. The bank account details can be updated at a later date, which will be at the time of the first login.

Hence, a GST registration number can be obtained without the same. New businesses who are in the process of obtaining bank accounts can simultaneously proceed with GST registration, thus saving time.

Claiming of ITC and amendment of B2B invoices of 17-18 are re-opened up till March 2019

Users can now amend B2B invoices of FY 2017-18. The facility to amend the GSTR-1 details of FY 17-18 was closed on filing the September 2018 return. The same has been made available while filing returns for the months of January to March 2019. The input tax credit of FY 2017-18 that was omitted and hence unclaimed up till September 2018 can be claimed now up to March 2019 as well. This was a much-needed remedy for taxpayers who made errors reporting any invoice in the past or previously missed out claiming genuine credit.

While there are updates being rolled out from time-to-time, users are still hoping to see a smooth system that is completely online and indefectible. In the future, users can look forward to more new updates that would familiarise taxpayers with the new return system that is likely to be introduced by July 2019

 

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Source: zeebiz.com
Guest house for employees a perk, cannot claim GST input credit rules Odisha AAAR

Guest house for employees a perk, cannot claim GST input credit rules Odisha AAAR

A new ruling by the Appellate Authority of Advance Ruling (AAAR) can open a Pandora’s Box when it comes to an employer, employee relationship and the nature of perquisites being provided.

The case came up when the National Aluminum Company Limited (NACL), a manufacturer of aluminum metal, decided to appeal against the ruling pronounced by the Odisha Authority for Advance Ruling.

NACL has townships at Angul, Damonjodi, and Bhubaneswar for its employees and also runs hospitals at Damanjodi and Angul for its employees along with guest houses for touring employees and guests. The bone of contention was that NACL wanted to claim input credit in maintaining hospitals, residential colonies and guest house and also the upkeep of garden in the residential colonies, mine and office premises. When the case went to the Odisha Authority for Advance Ruling (AAR), input credit was disallowed for some activities.

According to the AAR, inward supplies received by way of management, repair, renovation for furnishing the residential colony does not qualify for the input tax credit as residential accommodation is an exempted supply.

The input tax credit is also not admissible in respect of services and goods procured for maintenance of hospitals and pharmacy outlet as such services, being nil rated also fall under exempt supplies. Similarly, the service availed in relation to plant & garden in the residential colony will also not qualify for input tax credit

NACL was, however, entitled to input tax credit of the tax paid on inward supply of input and input service for maintenance of the guest house, transit house & training hostel. Also, services availed in relation to plantation and gardening within the plant area including mining area and the premises of other business establishments will also qualify for input tax credit.

Following the order by the AAR, the Commissioner (CX &GST, Bhubaneswar) interestingly also preferred to appeal against the order, challenging that the order is not legal and proper to the extent it has allowed credit for maintenance of guest house, hostel and service utilized for plantation and gardening within the plant area, administrative building.

Justifications by NACL in its appeal:
The AAR has wrongly held that the company’s activities of management, maintenance or repair of the townships are not for or in relation to its core business while denying the credit of the tax paid on the goods and services used for management, maintenance or repair of the township of its employees, and horticulture in township. NACL said it undertakes such activities for its business in the course or furtherance of business and, therefore, it is entitled to take credit of tax paid on such services.
The infrastructure of township at Angul, Damanjodi and Bhubaneswar are necessary to run large scale business of manufacturing, where thousands of employees are working.
In terms of GST laws, not only the manufacturing activity but any incidental or ancillary activities thereof are also covered within the expression “business” in the GST laws. Maintenance of various facilities in residential townships is integrally related to the business activities of the appellant and not a welfare activity undertaken by the appellant.

Contentions by the Commissioner:
Residential colonies are built for the welfare and benefit of the employees and extending any sort of benefit to the employees cannot be treated as something used or intended to be used in the course or furtherance of business
Similarly, the ruling of the AAR that utility of service provided through plantation & gardening within the plant area including mining area will be eligible for credit is also not legal and proper as it does not do not pass the legal test, which is used or intended to be used in course or furtherance of business.

Final ruling of the Appellate Authority of Advance Ruling (AAAR):
After considering the legal provisions and facts of the case, the AAAR held as follows:
The ruling of the AAR that inward supplies received by NACL for management, repair, renovation, alteration or maintenance service or goods received for furnishing the residential colony will not qualify for input tax credit is found to be correct.
Expenditure incurred by NACL towards construction, reconstruction, renovation, additions or alterations or repairs to the residential colony including plantation and gardening is not eligible for input tax benefit as it is nothing but a perquisite. “This ruling is likely to open the debate on whether an expenditure incurred by employee qualifies as a perquisite or a business expense incurred during the course or furtherance of business. This is because credit for former is not available while for later it may be available. It is time to re-look at the employment contracts,” says Harpreet Singh, Partner, KPMG India.
However, the AAAR held that the ruling of the AAR entitling NACL to input tax credit of the tax paid on inward supply of input and input services for maintenance of guest house transit house and trainee hostel is found to be not correct as the same is also a perquisite in favour of the employees.
The AAAR, however, allowed credit to NACL on services availed in relation to plantation and gardening within the plant area including mining area and the premises of other business establishments citing that it is a business necessity for controlling pollution as well as atmospheric temperature.

The same is also mandated in various laws under which the Applicant conducts its business such as the Forest Conservation Act, the Environment Protection Act, etc. Therefore, such activities are integral to the business activity and hence can be treated as activities in course or furtherance of its business.

“This is a positive order for the industry as, while allowing input credit of services availed in relation to plantation and gardening within factory premises, the authorities have not only considered whether such expenditure was warranted by any statutory law, but also taken cognizance of the expenditure being a business necessity for controlling pollution, temperature and preventing soil erosion,” added said Singh.
There is a thin line between perquisite and business expenditure and the ruling does not do anything to reduce confusion. For businesses, it will be a setback that facilities like guesthouse that carry certain expenditure, does not qualify for input credit. In considering maintaining and running a guest house as a cost-to-company, the AAAR has stated it in not in furtherance of the business nor is it integral part of the business. The debate on employee benefit and business expenditure is likely to continue.

 

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Source : economictimes.indiatimes.com
CGST Amendment Act – Key changes in the GST made effective from 1 February 2019

CGST Amendment Act – Key changes in the GST made effective from 1 February 2019

  • Out-and-out sales and high sea sales outside the ambit of GST:Transactions, where goods are physically moved from a place outside India to another place outside India, without such goods entering the territory of India (known as out-and-out sales in trade parlance), have been declared neither as supply of goods nor supply of services under as Schedule III of the CGST Act. Transactions of high sea sales are also included under Schedule III.
  • Reverse charge on procurements from unregistered dealers:Rather than a blanket levy of tax on procurements from unregistered dealers under reverse charge mechanism, Section 9(4) has been amended to levy tax only on procurements by notified assessees. It remains to be seen which class of assessees will be notified for this purpose
  • Ambit of input tax credit widened:Section 17 of the CGST Act has been amended to expand the scope of input tax credit to include motor vehicles having a capacity of more than 13 persons. Credit on other motor cars is also available if they are used for the specified purposes. Further, credit on health insurance, outdoor catering, etc. will be available if such services are required to be provided to employees by the assessee in terms of any law for the time being in force (e.g. Factories Act, labor laws, etc.).
  • Multiple registrations in one State:Earlier, separate registrations could be obtained in one State only if the assessee had distinct ‘business verticals’ in that State. This concept has been done away with by amending Section 25 and now, assessees may choose to obtain separate registrations in the same State irrespective of whether they qualify as distinct business verticals or not.
  • Flexibility in issuing debit/credit notes:Earlier, the law, as well as the GSTN portal, accepted a single credit note or debit note against one invoice. However, assessees faced practical difficulties since certain debit/credit notes were to be issued against thousands of invoices. Section 34 has been amended to permit issuance of a single debit/credit note against multiple invoices. This will obviate the difficulty faced by assessees, especially in the cement, steel and automobile industries
  • Simplification of GST returns:The GST Council approved putting in place system of filing a single monthly return in place of the existing 3 monthly returns. However, the existing system of filing GSTR-3B and GSTR-1 will remain in place until such a time the new monthly return is notified. Section 43A has been inserted in the CGST Act to carry out this change. However, this provision will not take effect from 1 February 2019 but will come into force only when the new system of returns is ready
  • Order of set-off: Section 49 of the CGST Act, SGST input tax credit can be set off against IGST liability only if CGST input tax credit balance is insufficient for this purpose. Hence, the order of set-off of input tax credit is strictly laid down under the CGST Act itself. Further, SGST or CGST credit balance can be utilized against IGST liability only after IGST balance has been exhausted. Earlier, while the law was ambiguous on this point, the GSTN portal allowed set-off of SGST only after CGST balance was exhausted
  • Transitional credit to exclude cesses: Section 140 of the CGST Act has been retrospectively amended to exclude cesses such as Krishi Kalyan Cess. This issue was hotly debated with the AAR denying the benefit of such credit in Re Kansai Nerolac Paints Ltd. [2018-VIL-11-AAR]
  • Amendment in place of supply provisions: The place of supply of transactions of transportation of goods to a place outside India will be the destination of goods in terms of the amendment made to Section 13 of the Integrated Goods and Services Tax Act, 2017 (the IGST Act). Consequently, the Indian logistics firm will be able to take advantage of this provision to claim export benefits. Further, the place of supply in case of job work services has been excluded from the performance-based rule. Hence, job workers based in India will be able to claim export benefits

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Source: mondaq.com
GST, a game-changer reform for logistics sector

GST, a game-changer reform for logistics sector

It has been 15 months since the rollout of what is considered one of India’s biggest tax reforms — the Goods and Services Tax (GST). But, we are already witnessing a major positive transition in the logistics sector.

Outsourcing and the value addition in the logistics sector is set to take off post-GST. Considering the double-digit growth, the logistics market would exceed $250 billion in the next two years. As per a recent survey, the Indian logistics sector provides livelihood to 22 million-plus people, which is expected to be over 40 million by 2020. The high rate of growth in the next couple of years is expected largely due to the implementation of GST.

GST has replaced at least 7 indirect tax heads and has eliminated the need for warehouse hubs across States. Further, GST has eliminated check posts across the nation and thereby waiting time, leading to at least 12-15% reduction in the turnaround time of trucks.

Better utilization of assets like vehicles and warehouses will lead to efficiency and increased productivity thus lowering overall cost. This would considerably benefit the supply chain directly and India’s growth indirectly.

The manufacturing and other services sectors have now started planning their supply chains, bearing in mind fleet cost and fast delivery, rather than tax structure and compliance.

Competitive edge

Pre-GST, the Indian logistics sector was struggling to add value to customers, compared to global peers. Indian firms were seen as labor contractors or mere transporters, which denied them the benefits of being a part of the supply chain. But the equation has changed now.

Manufacturers are looking to optimize supply chains and are willing to outsource value-added planning to logistics players, who have invested in technology and operate with a focus on quality and compliance. These logistics players are seeing a positive shift in the mindset of their clients and are gaining momentum. Further, small transporters can also now work with third-party logistics (3PL) providers and expand their fleet. GST has aided this move at a faster clip.

Post GST, there is a marked improvement in the use of technology and digitization by logistics players. 3PL players can become real ‘differentiators’ as they embrace technology to enhance the visibility of load carried, turn-around time, vehicle utilization, improvement in loading/unloading time by removing congestion at the docks, and the like.

Equipped with technology and software for load design solutions, vehicle geo-tracking, inventory (order/part level) tracking and route optimization, 3PL players add more value to their customers’ supply chain.

Logistics costs have been one of the biggest stumbling blocks for Indian manufacturers eyeing exports. At about 13-14% of GDP, India’s logistics cost is high and compares with about 8% in advanced nations that have efficient systems. This despite the percentage of outsourcing being higher in developed markets.

The Centre has made clear its intention to bring down this cost to less than 10%, which would make Indian manufacturers globally relevant.

The Centre created a new division in the Commerce Ministry to deal with the integrated development of logistics and urged all stakeholders to bring to India relevant best practices to enhance efficiency in logistics.

This is a good move as logistics firms used to deal with six different ministries separately and each would require separate paperwork and formalities. It is a big sense of relief to note there will soon be a system where a single document would be accepted for multi-modal logistics within India.

India has moved from the 54th position in 2014 to 44th in 2018 in the World Bank’s Logistics Performance Index.

Infrastructure status

The much-awaited ‘infrastructure’ status to the sector was conferred in November 2017, which is helping the sector avail cheaper finance (2% lower) for its warehousing and cold storage needs.

This will bring in a lot more players with an integrated service approach that would again help Indian manufacturers. New investments in this sector is good news as it could create a lot more jobs in the near future.

Together, the implementation of GST and other reforms have already started bringing efficiencies into the supply chain of various firms. Digitization, asset utilization, and visibility enhancement are facilitating better value-added outsourcing to logistics firms.

The government, too, has realized that aspirations for economic growth, employment generation, manufacturing, and exports are all inextricably linked to the efficient management of logistics.


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Source: The Hindu
Author: T V Sundram Iyengar 
GST paid under a Wrong Head by Mistake can be Transferred to the Right Head: Kerala HC

GST paid under a Wrong Head by Mistake can be Transferred to the Right Head: Kerala HC

The Kerala High Court has directed the GST department to transfer the tax amount paid by the petitioner under a wrong head instead of another by mistake.

In the instant case, the goods transported by the petitioner was detained by the department and imposed tax and penalty on the same. To get the goods released, the petitioner agreed to pay the whole amount. However, the amount was paid under the head ‘SGST’ instead of ‘IGST.’

Before the High Court, the petitioners relied on Section 77 of the GST Act and also Rule 4(1) of the GST Refund Rules, 2017.

Section 77 provides for the refund of the tax paid mistakenly under one head instead of another. But Rule 4 speaks of adjustment. Where the amount of refund is completely adjusted against any outstanding demand under the Act, an order giving details of the adjustment is to be issued in Part A of FORM GST RFD-07. The petitioner’s counsel lays stress on this process of adjustment and asserts that the amount remitted under one head can be adjusted under another head, for the demand can be any amount under the Act.

Allowing the petition, Justice Dama Seshadri Naidu held that “Under these circumstances, I find no difficulty for the respondent officials to allow the petitioner’s request and get the amount transferred from the head ‘SGST’ to ‘IGST’. It may, as the Government Pleader has contended, take some time, but it is inequitable for the authorities to let the petitioner suffer on that count.”

“So I hold that the 2nd respondent will release the goods forthwith along with the vehicle and, then, ensure that the tax and penalty already stood remitted under the ‘SGST’ is transferred to the head ‘IGST’,” the Court said.


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Source: Tax Scan
GST-based calculation confusing? Here are the new Casio calculators for India

GST-based calculation confusing? Here are the new Casio calculators for India

The Narendra Modi government had implemented the Goods and Services Tax (GST) in July 2017. Even after a year of implementation of the new tax regime, many are confused on how it works.

Japanese multinational consumer electronics firm Casio has surveyed different Indian markets to understand the nuances of the invoicing process over the past year and come up with an easy solution. It has introduced two new calculators which are billed as the world’s first GST calculator.

 Christened MJ-120 GST and MJ-12GST, the new calculators have been designed for the Indian market and priced at Rs 395 and Rs 475, respectively. Casio claims the new calculators are ideal for anyone dealing with GST-based invoicing. Here are the features.In-built GST tabs – All the five GST slabs (0%, 5%, 12%, 18% and 28%) are in-built in MJ-120GST and MJ-12GST. There are separate buttons for the GST slabs which are expected to reduce the number of clicks, hence reducing the time required to generate an invoice. In addition, the tax slabs are also changeable as per the industry needs.

Gross value (net value + tax) – Net value and tax paid under different GST slabs stay stored in the GST+0, GST+1, GST+2, GST+3 and GST +4 buttons and the overall value in the five slabs stays stored in the GST GT button. This eschews recalculation of the values repeatedly.

Tax-mode application – The taxpayers and traders in the different markets calculate the base value of products by deducting tax from MRP. Hence, a tax feature for all the five tax slabs to calculate the base value from MRP is also added in the new calculators. Tax-mode has its application in calculating the base value and net profit earned.

Multi-industry use – The functionality of the GST+/tax- key makes MJ-120GST transcend industries as it can calculate values in multiple formats that include the gross value from the base value in GST+ mode and base value from the gross value in Tax- mode. In addition, the GST GT key is for calculating the gross value of a GST-based calculation and can it can also be used for calculating the grand total of a calculation.

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Source: International Business Times
Spike In Detection Of Indirect Tax Evasion As Scrutiny Resumes After GST Breather

Spike In Detection Of Indirect Tax Evasion As Scrutiny Resumes After GST Breather

Indirect tax evasion detected in the first five months of the financial year more than doubled over the year-ago period, according to official documents reviewed by Sources, as the taxman resumed scrutiny after going slow during the transition to the goods and services tax.

In the previous financial year, the focus was more on the preparation and stability of the new indirect tax regime, said a senior official on the condition of anonymity.

The Directorate General of Goods and Services Tax Intelligence detected indirect tax evasion worth Rs 18,656 crore in April-August 2018 compared with Rs 7,031 crore in the year-ago period.

Generally, tax detection is an ongoing process, but in the last financial year the taxman couldn’t do it as the department transitioned to the GST and efforts were made to stabilise the new process, the official cited earlier said.
Krishan Arora, an indirect tax partner at Grant Thornton India LLP, agreed. The service tax audits initiated by the tax authorities couldn’t possibly be completed before GST implementation in 2017 as the department’s focus was on rolling out the new indirect tax regime, he said. These audits resumed after the GST regime settled and the high detection in service tax could be due to the conclusion of these audits in 2018, according to Arora.
“Parallelly, tax authorities initiated many new audits in the last financial year to check GST evasion as well, which could have resulted in the significant rise in the overall number,” Arora said.

Total evasion detected by the directorate stood at Rs 21,869 crore as on Sept. 14, 2018, according to the documents. Nearly Rs 3,000 crore of that was attributed to GST cases. The comparative year-ago numbers were not available. The detection in the first half ended September also reflects scrutiny made in the previous financial year ended March 2018.For the full financial year 2017-18, the taxman detected an indirect tax evasion of Rs 25,677 crore compared with Rs 15,048 crore in 2016-17, according to the documents.

Tax Recoveries Jump

Recoveries from those evading indirect taxes in India has jumped over fivefold to Rs 4,015 crore in April-September 2018 as compared with about Rs 700 crore in the corresponding period last year, a government official told Sources citing official data. Recovery figures for the years ended March 2018 and March 2017 were not available.

Although recoveries in the first half of the year may seem to have increased significantly due to increased detection, the gap between detection and actual recoveries could be due to taxpayers disputing demands raised by the taxman by approaching higher appellate fora, said Arora.

Abhishek Jain, an indirect tax partner at EY India, said: “With the introduction of e-way bills and concerted efforts by the government in data analytics, more cases of GST evasion are getting detected and corresponding recoveries are also going up.”


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You can now claim your refund online on excess GST. Here’s how

You can now claim your refund online on excess GST. Here’s how

Back in July, a FICCI survey revealed that 59% of the enterprises surveyed were not satisfied with the capability of the Goods and Services Tax Network (GSTN) portal. In fact, a whopping 96% had felt that it needed improvement. Paying heed to public demand portal now boasts an added functionality where refunds are concerned.

“Facility to claim a refund on account of excess payment of tax has been enabled on GST Portal for the taxpayers,” the entity announced today. GSTN is a non-profit, non-government company that provides IT infrastructure and services to taxpayers, the Central and State Governments and other stakeholders for the implementation of the Goods and Services Tax.

This development comes a day after Taxscan Media reported that the portal introduced two new features: The facility to upload statement 4 for the refund on account of supplies made to SEZ unit/SEZ Developer, with payment of tax, and the facility for amendment in Registration of Core fields.

So who is eligible to file refund applications on grounds of excess payment of tax? According to the portal, normal and casual taxpayers filing Form GSTR-3B, composite taxpayers filing Form GSTR-4 and Non-Resident taxpayers filing Form GSTR-5 can file refund applications for amounts of Rs 1,000 or more under the newly-introduced facility.

The user manual on the portal outlines how taxpayers can file an application for refund on account of excess payment of tax. Here’s what you need to do:

1. Visit the official GST site

2. On the GST home page, click the Services > Refunds > Application for the refund command

3. When the ‘select the refund type’ page is displayed, pick the ‘excess payment of tax’ option

4. Select the financial year and month for which application has to be filed from the drop-down lists and click the ‘create’ button

5. The GST RFD-01A – Excess payment of tax page will be displayed. Fill in the relevant tax details and submit your bank account details then click the ‘save’ option.

6. Click the ‘preview’ button to download the form in PDF format.

7. Tick the Undertaking and Self-Declaration checkboxes and click on the ‘proceed’ button

8. Click the ‘File with DSC’ or ‘File with EVC’ buttons. If you pick the former, just click on ‘proceed’, select the certificate and click the ‘sign’ button. The Application Reference Number (ARN) receipt will be displayed. Else, in the case of EVC, enter the OTP sent to the email address and mobile number of the Authorized Signatory registered at the GST Portal and click the ‘verify’ button. The success message is displayed and status is changed to ‘submitted’. The ARN receipt is then downloaded and a copy is sent to your registered email address and mobile phone number.

Once the ARN is generated, the refund application would be assigned to Jurisdictional Refund Processing Officers for scrutiny following which the refund will be disbursed. Taxpayers can track the status of refund application using track status functionality.


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Sources: Business Today
Are GST norms posing hurdle in listing of RVNL, other PSUs?

Are GST norms posing hurdle in listing of RVNL, other PSUs?

The definition of a ‘government entity’ under the goods and services tax (GST) regime is proving to be an impediment for stock market listing of companies such as Rail Vikas Nigam (RVNL) and could also hit similar plans of a clutch of other entities such as the National Highways Authority of India (NHAI), which executes construction works awarded by the government.

As per the conditions, an entity in which the government stake is above 90% is liable to pay 12% GST for work contracts executed on behalf of the Central government, state government or any local authority. However, if the government holding goes below 90%, the applicable GST rate is 18%.

So, in the case of RVNL, a company which executes only Indian Railway contracts, while 10% equity shares will be offered to the public under its proposed IPO. An additional around 0.5% will be offered to employees, as has been done in the case of another railway PSU Ircon International, effectively bringing the government holding in the firm to less than 90%.

 So, when RVNL gets listed since it raises bills to the railways, the cash-starved transporter’s cost of projects will go up by 6 percentage points. This will add to the operational cost of the railways which reported its worst operating ratio since 2000-2001 last fiscal at 98.5.

According to sources, even if no shares are offered to employees and the government holding is kept at 90% for now, the percentage of public holding has to be increased to 25% within three years once a company is listed, as per the Securities and Exchange Board of India (Sebi) norms, eventually increasing the cost of projects.

“The ministry of railways has written to DIPAM (department of investment and public asset management) to request the finance ministry to sort the issue,” a source said.

DIPAM, part of the finance ministry, oversees the disinvestment process of government PSUs.

While railway arms RITES and Ircon have already been listed during the current financial year, plans to list RVNL and Indian Railway Finance Corporation (IRFC) is in limbo. “RVNL and IRFC were scheduled for the third quarter (of the current financial year), but they may get listed as of now,” said the source.

In case of IRFC, while the corporate ministry has given a clearance that all future deferred tax liabilities starting 2018-19 will be counted in the company’s net worth, there is still no decision on the backlog of around Rs 6,000 crore of deferred tax liability already in its books.

The government’s disinvestment target for FY19 is Rs 80,000 crore, but mid-way through the year, it is woefully short of the target and has managed a meagre Rs 10,000 crore.

Deferred tax liability is kept aside for payment of future tax liability. So, though a company has money, it cannot be shown in its net worth. It affects IRFC as its borrowing capacity is assumed to be 10 times its net worth, a deferred tax liability impedes its borrowing capacity.

“The above-mentioned GST rule will not affect the company as it will pass on the applicable tax to the contract owner. So, while the government will be the ultimate beneficiary, the railways will be affected as it manages its own finances. And since RVNL is 100% dependent on railway work contracts, the transporter may think of contracting other government entities in order to save cost,” the source said, adding that companies which will be hit most by the rule will be those which only execute government work contracts.


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 Sources: Financial Express