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More business-friendly: Govt proposes clutch of amendment to GST law

More business-friendly: Govt proposes clutch of amendment to GST law

To iron out issues concerning implementation of the goods and services tax (GST), the Centre on Monday proposed several pro-business amendments to GST laws suchGST Law as restricting GST liability under reverse charge basis on procurements from unregistered vendors to specified class of registered persons to be notified by the GST Council and allowing businesses to have separate registration for each place of business in a state. Also, the input tax credit entitlement on vehicles will be relaxed to cover the passenger vehicles having the seating capacity of not more than thirteen persons, in case these are used for specific (rather than personal) purposes. So ITC will now be available for dumpers, work-trucks, fork-lift trucks and other special purpose vehicles.

While the changes are termed business-friendly and supportive of ease of doing business, sections of the industry could be affected by the provisions relating to restriction on transfer of credit balance of education cess, secondary and higher education cess, Krishi Kalyan cess, additional duties of excise (textile and textile articles) etc. “Specific denial of transition of credit of cesses like education cess etc would be against the tax position that some taxpayers had taken,” said Abhishek Jain, tax partner, EY India.

Pratik Jain, partner and leader, Indirect Tax, PwC, said: It is a welcome step to invite public comments for the proposed amendments to the GST law. The amendments such as amendment in the definition of supply, widening of credits on vehicles and restricting reverse charge liability for procurements from unregistered vendors to the specified set of persons are welcome.”

He, however, added that the proposed amendments do not cover some of the amendments which were already highlighted to the GST Council such as the tax liability on services deemed to be provided by the branch offices to foreign offices/parents. “It would be interesting to see which provisions are proposed to be given retrospective effect and which are given effect prospectively, Jain said.

In all, the Centre’s draft proposals to amend GST laws contains 46 amendments on which the public could give their suggestions till July 15. Significantly, an option is proposed to be given to every person to obtain separate registration for each place of business in a state. Previously, a single registration is required to be obtained for all the places of business in a state, except when they were operating as a separate business vertical. Further, the provisions for individual registration of multiple SEZ units have also been proposed to be introduced.

In a tax-payer friendly amendment, it is now proposed to allow ITC in respect of food and beverages, health services and travel benefits to employees, which are obligatory for an employer to provide to its employees under law. Merchant sale transactions where the goods do not enter India, sale of goods stored in customs bonded warehouse and high sea sales transactions are specified as transactions which do not amount to supply of goods as well as services, resolving the ambiguity of treatment of such transactions.

As reported by FE recently, a group of ministers (GoM) led by Bihar deputy chief minister Sushil Modi is set to recommend to the GST Council that a section in the GST Act concerning the reverse charge mechanism be scrapped as “it discriminates against unregistered dealers while not adding much to the revenue.” Under the RCM rule, registered dealers are now required to make tax payments in case they procure goods from unregistered ones. This has been resisted by the registered small businesses as they find it cumbersome to comply when goods are purchased from dealers outside the GST ambit. Since the GST’s rollout in July last year, RCM has remained suspended and has recently been further deferred till September 30.

The amendments also seek to give effect to some of the decisions taken by the GST Council in the past like raising the turnover threshold for availing composition scheme increased from Rs 1 crore to Rs 1.5 crore. In the suggested amendments, definition of supply is proposed to be amended to remove specific inclusion of activities referred to in schedule II to remove an anomaly that in some cases, even though the activity specifically mentioned in schedule II did not amount to supply, due to deemed inclusion of such activities in definition of supply, it attracted tax.

Source : Financial Express
GST panel recommends no extra tax incentives for digital transactions

GST panel recommends no extra tax incentives for digital transactions

A ministerial panel headed by Bihar Deputy Chief Minister Sushil Modi on Sunday decided to recommend to the Goods and Services Tax (GST) Council to take the final call on the way reverse charge mechanism will be applicable.

Concerns related to revenue prompted another ministerial panel, also headed by Modi, to defer GST discount to consumers making digital payments for about a year.

On May 4, the Council had discussed the proposal of giving a concession of two percent in the GST rate (where tax rate is three percent or more) on B2C supplies, for which payment is made through cheque or digital mode. In that case, the ceiling for the discount will be capped at Rs 100 per transaction.

While the Group of Ministers (GoM) is in favour on incentivising digital payments, PM Modi said it is better to wait for some time till revenue stabilises further.

The GoM, hence, recommended the GST Council to defer the incentives for now.

The GST Council will decide on businesses that will have the liability to pay tax on reverse charge. Towards this, the GoM has suggested deleting sub-section (4) of section 9 of the Central GST (CGST) Act, 2017.

The ministerial panels will submit their report to the GST Council that is expected meet on July 21 in New Delhi.

Since the implementation of goods and service tax in July last year, reverse charge mechanism – one of the key measures against tax evasion – has been deferred thrice and this time till September 30.

Earlier during the year, some states had insisted that the reverse charge mechanism should be re-introduced, as it will help tax authorities plug revenue leakages. Thereafter, a GoM headed by Modi was formed to decide on the exact shape and form of RCM if the government decides to implement it.

Reverse charge is a mechanism where the recipient of the good or service will have to pay GST, which is otherwise paid by the supplier. The charge is applicable on a registered dealer if he buys goods from a dealer not registered under GST. However, the receiver of the good is eligible for input tax credit, while the unregistered dealer is not.

Registered taxpayers (supplier) were not willing to take the burden of paying tax, while small or unregistered taxpayers were running out of business as these registered dealers were hesitant to buy goods from them. Keeping this in mind, GST Council in October, 2017 had temporarily suspended RCM, as it was increasing compliance burden on taxpayers.

Source: Money Control
GST Council working towards reducing tax rates: MoS Finance

GST Council working towards reducing tax rates: MoS Finance

The GST Council is working towards rationalising Goods and Service Tax (GST) rates,GST Council: sp shukla Minister of State for Finance Shiv Pratap Shukla said on Thursday.

A big announcement from the government regarding GST is imminent, he said at an event.

Currently, the GST has four rates of 5 per cent, 12 per cent, 18 per cent and 28 per cent.

The all powerful GST Council had, in its meeting in January, decided to slash the GST rate on 54 services and 29 items.

In its November 2017 meeting, the council had removed 178 items from the highest 28 per cent category while cutting tax on all restaurants outside starred-hotels to 5 per cent.

He further said the government is working to promote the growth of SME as it is an important sector to the economy including in output, employment and exports.

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Source: Business Today
Government simplifies GSTR-3B filing, here’s what has changed

Government simplifies GSTR-3B filing, here’s what has changed



The government on Wednesday came out with a simplified version of GSTR-3B, making it more user-friendly amidst indications that it may possible be used even beyond March 31.

According to a note prepared by PwC, GSTN has made the following key changes in the process of filing GSTR 3 B:

1. Tax payment – Earlier, a taxpayer was required to Submit the return to ascertain the tax liability amount. Post submission, no changes were allowed. Now, the tax liability to be paid in cash/ credit will be shown before submitting the return.

2. Challan generation – Tax payment challan can now be auto-generated after offsetting the input tax credit available in credit ledger. Taxpayer, however, has an option to edit the credit amount to be utilized and not to consider the system generated credit utilisation. Earlier, the assessee had to manually fill in the credit utilization amount and generate the challan.

3. Download facility of draft return – A new feature of downloading draft return at any stage has been provided to verify the saved details offline.

4. Auto-fil of tax amount – Taxpayer now need to fill either CGST or SGST/UTGST amount, other tax will get auto filled.

Also Read: Technical Challenges For Implementation Of GST

Further, detailed user manuals providing step wise details of the return filing process has been made available to businesses.

“This is a welcome step towards making the tax filing process more user friendly. It makes the system less rigid and reduces the chances of inadvertent errors. With this, hopefully, the businesses would find it easier to file returns which would in turn increase the level of compliances. It also indicates that the Government intends to continue with monthly Form 3 B returns post March 2018 as well,” says Pratik Jain, Partner & Leader, Indirect Tax, PwC.

According to Archit Gupta, Founder and CEO, ClearTax such changes will make filing simpler and faster and reduce manual input to tax payment which could throw off errors. “Several user friendly changes have been made in the GSTR-3B filing flow. Now users can view their tax liability before submitting. And view cash/credit ledger offset available to them and the tax to be paid before submission of their GSTR-3B return.”

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Source :  The Economic Times
GST rate cut: From diamonds to used cars, here’s full list of revised items

GST rate cut: From diamonds to used cars, here’s full list of revised items

GST rate cut

Two weeks ahead of Budget 2018, the Goods and Services Tax Council on Thursday cut rates on 83 employment-oriented goods and services, in a bid to encourage greater compliance as revenues have dipped since the landmark reform was announced in July. The panel, headed by Finance Minister Arun Jaitley and comprising representatives of all states, at its 25th meeting decided to reduce tax rate on 29 items and 54 categories of services with effect from January 25. Businesses have raised concerns about high rates of taxation and cumbersome processes in GST, billed as India’s biggest tax reform in 70 years.

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

The goods on which GST will be lowered include biofuel-run buses, used motor vehicles and diamonds and precious stones.

Here’s the complete list:

List of goods on which GST rate recommended for reduction from 28% to 18%

Old and used motor vehicles on the margin of the supplier, subject to the condition that no input tax credit of central excise duty/value added tax or GST paid on such vehicles has been availed by him.

Buses, for use in public transport, which exclusively run on bio-fuels.

List of goods on which GST rate recommended for reduction from 18% to 12%

Sugar boiled confectionary Drinking water packed in 20 litters bottles Fertilizer grade Phosphoric acid Bio-diesel Bio-pesticides Bamboo wood building joinery Drip irrigation system including laterals, sprinklers Mechanical Sprayer

List of goods on which GST rate recommended for reduction from 18% to 5%

Tamarind Kernel Powder Mehendi paste in cones LPG supplied for supply to household domestic consumers

List of goods on which GST rate recommended for reduction from 12% to 5%

Articles of straw, of esparto or of other plaiting materials; basketware and wickerwork

List of goods on which GST rate recommended for reduction from 3% to 0.25%

Diamonds and precious stones

List of goods on which GST will not be charged

Vibhuti Parts and accessories for manufacture of hearing aids De-oiled rice bran

GST rate cut on services

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

Admission to theme parks, water parks, joy rides, merry-go-rounds, go-carting and ballet will now be taxed at 18% instead of 28% and on common effluent treatment plans services from 18% to 12%.

List of goods on which GST rate recommended for increase from nil to 5%

Rice bran (other than de-oiled rice bran) Cigarette filter rods

Loss to the exchequer

GST rate cut will hit the exchequer by Rs 10-12 billion annually.

Reason for rate cut

The Council veered around the idea of making the GST return filing process simpler to ease compliance burden for small businesses.

GST Panel also decided to divide Rs 350 billion (Rs 35,000 crore) IGST collections between centre and states.

Petrol, crude oil may come under GST ambit

Finance Minister Arun Jaitley said the next meeting of the Council may consider bringing items like crude oil, natural gas, petrol, diesel, ATF and real estate within the GST purview.

While GST collections have been coming down and reached a low of Rs 800 billion in November, direct tax collections have given the government much-needed help. Direct tax collections grew 18.7 per cent till January 15, against the Budget target of 15.7 per cent for 2017-18. These would be reflected in the Revised Estimates of 2017-18 in the Budget.

To ease the flow of funds for both the Centre and states, the Council also decided to distribute Integrated GST (IGST) of Rs 350 billion equally between them.

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Source :  Business Standard
Government hints at reviewing rates in top GST bracket

Government hints at reviewing rates in top GST bracket

Here's how much the govt panel recommends lowering of GST rates for SMEs

After slashing the GST rates of over 200 items last month, the government on Saturday hinted at reviewing levies on the items in the top 28 per cent tax bracket.

On November 10, the GST Council, headed by finance minster Arun Jaitley, had lowered Goods and Services Tax  rates on over 200 items, ranging from chewing gum to chocolates, to beauty products, wigs and wrist watches.

As many as 178 items of daily use were shifted from the top tax bracket of 28 per cent to 18 per cent, and a uniform 5 per cent tax was prescribed for both air-conditioned and non- AC restaurants.

“We have already reduced GST slabs of 12 per cent to 5 per cent and 5 per cent to zero per cent (on six items). Going forward, we may look at reviewing the 28 per cent slab,” Union minister of state for Finance Shiv Pratap Shukla said at an event here this evening.

The GST Council had also pruned the list of items in the top 28 per cent slab to just 50 from 228 earlier.

Following this major rejig in GST rates, Jaitley had hinted at a further scope for rationalisation of rates.

“In four months, we have rationalised the 28 per cent slab. Such rationalisation (will happen in future) depending on revenue buoyancy,” Jaitley said at an event last month.

Shukla said by March next year, the government will ensure that all the processes under the GST are simplified.

The goods and service tax, a landmark tax reform which subsumed a host of central and state levies, came into force on July 1.

Source: Business Today
Post GST reduction GCPL passes on the benefits to consumers

Post GST reduction GCPL passes on the benefits to consumers

Post GST reduction GCPL passes on the benefits to consumers

Post GST reduction GCPL passes on the benefits to consumers

On Tuesday, ITC, Dabur, HUL and Marico, had cut prices of various products following the reduction in GST rates effective November 15.

“We are committed to passing on the benefits of the reduced rates to our consumers and have initiated a 7-10 per cent price reduction in our products across hair colours, air fresheners, liquid detergents and deodorant categories,” Business Head-India and SAARC, Godrej Consumer Products Ltd (GCPL), Sunil Kataria was quoted by PTI as saying.

The move comes days after the Government asked the firms to immediately revise the MRP on the products to pass on lower GST rates to consumers.

GCPL said the reductions will be effective immediately and would also be applicable to our existing stocks.

“We are working very closely with our distributors and channel partners to monitor that the reduced MRPs are being passed on to the consumers,” Kataria told PTI.

He was further quoted by PTI as saying: “Our intent is to offer maximum support to retailers and wholesalers so that the switch to the new pricing is seamless and quick”.

The Goods and Services Tax (GST) rate was reduced on 178 items, including detergents, shampoos and beauty products, from 28 per cent to 18 per cent from November 15.

GST rates on a number of items have also been reduced from 18 per cent to 12 per cent and from 12 per cent to 5 per cent.

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Source: India Retailing
Govt records highest GST filing in October, Punjab tops the list in compliance

Govt records highest GST filing in October, Punjab tops the list in compliance

All eyes are on GST as Centre plans better social pension

The Goods and Services Tax (GST) Council’s efforts to sort out the sundry issues plaguing taxpayers during the initial rollout and the steady reduction in tax rates seems to be paying off in terms of compliance and tax collections. As many as 43.67 lakh businesses have filed the initial GSTR-3B returns for October, the highest monthly return filing within due date since the new tax was introduced on July 1, according to a GST Network statement. That’s around 56% of the registered taxpayers. Punjab saw over 73% taxpayers filing GSTR-3B returns, the highest among all the states.

In fact, there has been a steady increase in the number of taxpayers filing the initial sales return. Over 39 lakh returns were filed within due date for September compared to 28.46 lakh for August. This can be attributed to two major factors. “One is greater awareness and the fact that GSTR-3B is a simpler form. The second is that the GSTN portal has been performing much better, especially [for] GSTR-3B and GSTR-1,” said Pratik Jain, leader, indirect tax, PwC India in a quote to The Hindu. Incidentally, GST registrations overall has crossed 11 crore from around 60 lakh in late August.

Of course, given the typical Indian mindset of dithering till the last minute, November 20-the last date for filing the summary returns for the previous month without interest-saw over 14.7 lakh taxpayers log into the GST Network portal; a new record for maximum returns filed in a single day.

“But the gap between eligible taxpayers and those filing returns by the deadline has continued to hover around 30 lakh, which would be a concern for the government,” said Abhishek Jain, tax partner, EY to The Financial Express. Nonetheless, the numbers should fan the government’s confidence that GST will widen the tax base and yield higher revenue than ever before.


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Source :  Business Today in
Buying groceries? Make sure to check GST ‘discounts’

Buying groceries? Make sure to check GST ‘discounts’

From Wednesday, consumers would do well to check their shopping bills closely. A host of packaged products such as chocolates, toothpastes, shampoos and shaving creams – with the maximum retail price printed on them – is set to become cheaper following a steep reduction in the goods and services tax.

Some companies manufacturing these products have asked traders to pass on the tax cuts to consumers immediately, without waiting to put revised maximum retail price stickers on them or printing new packs, both of which would take time.

A watch company and a printer maker plan to inform customers about the price reduction through newspaper advertisements. Still, consumers should be aware that not all companies may implement the price cuts right away.

The changes will affect a large number of products that are already in stores or on their way there. Pasting stickers with revised prices can be done only after the government gives the go ahead. Apart from taking time, some companies said pasting stickers costs the same as printing packs with the revised prices.

revised gst

The maximum retail price of a product includes taxes and unless a company increases the base price or raises the margin for distributors and dealers, these products should become cheaper. The government is yet to issue fresh guidelines on pasting stickers with the revised prices.

“A number of products are in the MRP category, so companies will have to put a sticker or print new prices,” a government official said. The GST Council reduced the tax rate on about 200 products, of which 178 were moved to 18 per cent from the 28 per cent slab, at its 23rd meeting on November 10. The new rates are effective from midnight Tuesday, with both the states and the Centre issuing notifications.

“It’s good that the GST Council decided to bring in the changes from a particular date, that is November 15, as in a few cases earlier, different states had issued notifications from different dates,” said Pratik Jain, indirect tax partner, PwC.

“However, given the paucity of time, most companies have not been able to reduce the MRP of products but have communicated to dealers and retailers that prices should be brought down.” Consumers need to be aware about what prices are likely to come down and by how much, irrespective of the MRP printed on the product, he said. Gujarat Cooperative Milk Marketing Federation, which makes Amul, the country’s largest dairy brand, has told distributors to sell its products at the revised prices, managing director RS Sodhi said.

“We have started the process of price revision. But there will be some transition time before which products with new MRPs reach end consumers,” he said. GST slabs on condensed milk and chocolate have been revised downwards, directly impacting the company’s products. Dabur, the maker of Real fruit juices and herbal and ayurvedic products, said it has not informed its trade channels about the revised prices.

“So far we have not communicated anything to our distributors as we are awaiting the notification,” Dabur chief financial officer Lalit Malik said. “We are in the process of evaluating the impact of this announcement and a final decision will be taken post the notification of the rate cut.” Some companies may not cut prices and instead increase pack sizes.

“When the tax slabs went up in July, we did not increase prices. Now that they have been revised downwards, we may not drop prices. We will wait and see how the market dynamics play out before taking a decision,” said the head of a large cosmetics company. Consumers should keep a tab on restaurant bills, too.

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Source :  The Economic Times
GST Revised Rates: Eating out in hotels, restaurants to become cheaper from today

GST Revised Rates: Eating out in hotels, restaurants to become cheaper from today

GST rates slashed: Eating out in hotels, restaurants to become cheaper from today

Eating out in hotels and restaurants will become cheaper from today (15 November) with the Goods and Service Tax (GST) Council having slashed rates to five percent from 12 and 18 percent earlier. However, there is no formal notification from the government as yet.

A uniform 5 percent tax was prescribed by the council for all restaurants, both air-conditioned and non-AC. Union Finance Minister Arun Jaitley said that the Input Tax Credit (ITC) benefit given to restaurants was meant to be passed on to the customers.

Currently, 12 percent GST on food bill is levied in non-AC restaurants and 18 percent in air-conditioned ones. All these got input tax credit, a facility to set off tax paid on inputs with final tax. The council said the restaurants, however, did not pass on the input tax credit (ITC) to customers and so the ITC facility is being withdrawn and a uniform 5 percent tax is levied on all restaurants without the distinction of AC or non-AC.

Restaurants in starred-hotels that charge Rs 7,500 or more per day room tariff will be levied 18 percent GST but ITC is allowed for them. Those restaurants in hotels charging less than Rs 7,500 room tariff will charge 5 percent GST but will not get ITC.

Also, tax on wet grinders and armoured vehicles was cut from 28 percent to 12 percent, Jaitley said, adding the tax rate on six items was reduced from 18 percent to 5 percent, on 8 items from 12 percent to 5 percent and on six items from 5 percent to nil.

Chewing gum, chocolates, coffee, custard powder, marble and granite, dental hygiene products, polishes and creams, sanitary ware, leather clothing, artificial fur, wigs, cookers, stoves, after-shave, deodorant, detergent and washing power, razors and blades, cutlery, storage water heater, batteries, goggles, wrist watches and mattress are among the products on which tax rate has been cut from 28 percent to 18 percent.

“This revision in GST rate for restaurants is positive, as it would bring down the dining-out cost, supporting footfalls and revenues at a time when most organised restaurants are struggling to grow demand,” ICRA Vice President and Sector Head Pavethra Ponniah said.

“As most major inputs for restaurants like grains (not packaged), vegetables, poultry and seafood are exempt from GST, the input credit advantage available for restaurants was negligible,” Ponniah said, adding that restaurants were also not passing on any benefit of input tax credit to the consumer under GST.

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Source :  Firstpost