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GSTR-9, GSTR-9C gets simplified further, submission dates extended

GSTR-9, GSTR-9C gets simplified further, submission dates extended

The Government has to extend the due dates of filing of Form GSTR-9 (Annual Return) and Form GSTR-9C (Reconciliation Statement) for Financial Year 2017-18 to December 31, 2019 and for Financial Year 2018-19 to March 31, 2020.

It has also decided to simplify these forms by making various fields of these forms as optional.

The Central Board of Indirect Taxes & Customs (CBIC) on Thursday notified the amendments regarding the simplification of GSTR-9 (Annual Return) and GSTR-9C (Reconciliation Statement) which inter-alia allow the taxpayers to not to provide split of input tax credit availed on inputs, input services and capital goods and to not to provide HSN level information of outputs or inputs, etc. for the financial year 2017-18 and 2018-19.

CBIC expects that with these changes and the extension of deadlines, all the GST taxpayers would be able to file their Annual Returns along with Reconciliation Statement for the financial years 2017-18 and 2018-19 in time.

“Since the returns were not simplified, the extension is not a surprise. However, frequent extensions and delay in non-simplification has been a let down for businesses. Our sense is that businesses are ready to comply with GSTR-9 so they can move on and prepare for the new simplified return filing system,” said Archit Gupta .

Earlier the last date for filing of GSTR-9 and GSTR-9C for Financial Year 2017-18 was November 30, while that for Financial Year 2018-19 was December 31.

Source: Economic-Times

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No GST Registration Needed for Co-Owner in AoP until the Turnover Reached the Threshold Limit: AAR

No GST Registration Needed for Co-Owner in AoP until the Turnover Reached the Threshold Limit: AAR

The Authority of Advance Ruling in West Bengal has ruled that, GST Registration is not needed for Co-Owner in Association of Persons ( AoP ) until the turnover reached the Threshold limit under the GST Act, 2017.

The Applicant is one of the co-owners of immovable property, jointly owned by three individuals. All three co-owners, including the Applicant, hold an equal share in the property. The property is let out to CGST & CX, Chandannagar Division. Total rental received exceeds the threshold provided under section 22(1) of the GST Act, but the share of each of the three co-owners does not cross the said threshold.

The Applicant seeks a ruling on whether he and the other two co-owners are to be treated as an association of persons or a body of individuals and, therefore, a person as defined under section 2(84)(f) of the GST Act, who is required to be registered under section 22(1) of the Act.

The AAR observed that, “the Applicant and the other two co-owners cannot be treated as an association of persons and, therefore, as a person defined under section 2(84X0 of the GST Act, where their income from renting is separately ascertainable and assessed for income tax individually at the hand of each co-owner. Whether the Applicant is required to be registered under section 22(1) of the GST Act will, therefore, depend on his gross turnover, ascertained separately from the other co-owners, exceeding the threshold as provided under the Act”.

Source: TaxScan.

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Know in Detail about the Importance of GST Reconciliation

Know in Detail about the Importance of GST Reconciliation

What do you mean by GST Reconciliation?

The concept of GST reconciliation and matching is not new as far as the taxpayers are concerned. In fact, this process has been modeled upon the former VAT and excise laws. Previously, matching of data between tax returns and the books of accounts was quite easy for most of the enterprises. Suppose if the department that is responsible for processing the returns came across some discrepancies, the taxpayer would be sent the communications, following which further inspection and audits would be done.

In the GST system, this process has gained much importance, as the rationality of the Input Tax Credit used by the businesses is being regularly checked by the GST personnel. Further, under this regime, the taxpayers are required to reconcile their data each month along with the data declared by their vendors. The return filing and processing are automated semantically, and the GST returns are inter-connected.

Some of the Common Errors which Occur During GST Reconciliation

Below given are some of the mismatches which occur during the reconciliation process:

  • Variances between the amount of credit in GSTR 3B and GSTR 2A or/and
  • Alterations in the provisional credit claimed and the actual credit which is claimable. Normally, this situation happens during transition phases
  • Differences between GSTR 3B and GSTR 1

Scrutiny notices would be sent to the taxpayers if there are any variations observed between these returns.

Mismatches can occur due to several reasons. Some of the common reasons are:

  1. Though the vendor has not declared liability on the supplies which have been already done with, the businesses have already taken credit for such purchases in the GST returns. If the businesses did not carry out the necessary follow up with the vendor to make sure that the liability is declared, the risks pertaining to such credits getting rejected may increase
  2. The mistakes which occur in the already furnished details. Mismatches can occur in the fields like the date and number of the debit note/invoice, the GSTIN of the supplier/recipient, etc. Further, if amendments are made in the GST returns of the month succeeding the relevant month during which the mistakes happened, it may lead to mismatches as well
  3. Mismatches occur in the credit availed and the liability declared by the vendor. In fact, the reasons for these variations should be recognized and reconciled accordingly
  4. Though the liability has been declared by the vendor, the credit is not availed in the GST return. Such credits should be utilized at the earliest before the due date of September returns or annual returns.

How to Select a Software/Tool which Enables Quicker Reconciliation and Guarantees 100% Compliance?

A powerful technological solution can address all of the GST reconciliation challenges in an effective manner, which in turn helps to add value to the business concerned. Some of the features which are essential for the matching and reconciliation purposes include:

  • The GST reconciliation software should have the ability to deal with huge chunks of data
  • A business owner should be able to get the data into the reconciliation system quite easily from any type of source like Excel, ERP, bill books, etc.
  • It should make the entire process seamless and efficient during each month, that the business owner can stay relaxed
  • Proactive reminders and the availability of an automated system in order to minimize human interventions would also help in making the process of reconciliation more efficient
  • The software/tool must be exceptionally intelligent to tackle any missing/wrong information like wrong dates, invoice numbers, tax rates, sale value, missing items, etc. The GST reconciliation software should be capable of providing reconciliation efficiently in all these instances
  • It should be capable of providing in-depth reporting and insights which can help deal with the challenges successfully
  • Given the fact that the GST rules keep on changing from time to time, the tool/software should be able to evolve quickly and operate as per the changes in the rules.

Carrying Out GST Reconciliation in Five Easy Steps

The reconciliation process under the GST system is all about matching the data filed by the suppliers with that of the recipients and recording all the transactions that happened during that time. Further, this process guarantees that no transactions or procurements are excluded or wrongly stated in the GST returns.

The taxpayers are required to reconcile their data with that of the vendors regularly in order to claim the Input Tax Credit (ITC) for which they are eligible. Though reconciliation is simple, it may be time-consuming as the taxpayers need to watch out on a continuous basis for any discrepancies or mismatches that may have a serious impact on the ITC claim.

Below given are five steps to handle the reconciliation process easily:

1. Under the GST reconciliation process for the relevant financial year, it is mandatory that the taxpayers need to file the entire periodic GST return. Even if the due date of a certain GST return is overlooked, it needs to be filed along with the interest or the late fee, whichever is applicable. In fact, if the GST returns are not filed in time, it may affect the matching and reconciliation procedure. Further, the taxpayers are required to keep their books of accounts up-to-date and align the tax returns in accordance with the same. Moreover, unless the entire GST returns are filed, the taxpayers would not be able to claim the ITC

2. It is important for the books of accounts and the GST return to be in agreement with each other for the purpose of claiming ITC. In addition, the taxpayers need to keep a check on the taxes paid as per the reverse charge system while they claim ITC on purchases. However, a taxpayer can benefit from the credit of taxes paid according to the reverse charge system only if the goods and/or services are utilized or would be utilized for the sake of business

3. The taxpayers need to find out the mismatches and make corrections in the relevant entries in the books of accounts. Further, they also need to amend these details in the upcoming GST return filing period. Though the GST laws do not allow to revise tax returns filed during the previous periods, they permit to file the corrected entries through an amendment return in the subsequent periodic return. Further, these entries need to be filed in GSTR 1 and GSTR 3B as well.

Ensure that the purchase register is carefully matched with GSTR 3B (uploaded on a monthly basis) and GSTR 2A details (uploaded by the supplier). It is essential to streamline the GSTR 3B return, the books of accounts, and the GSTR 2A form to avail the ITC completely on the related purchases, or else, the taxpayer may lose the ITC claim, which ends up in paying extra taxes

4. The communication between the vendors and customers is important as it results in the relentless reporting of the details as far as the GST returns are concerned. Further, the chances of omission, mismatches, or incorrect entries are considerably minimized when both the suppliers and the recipients coordinate their details and then file the GST returns. It is also important to find out the non-compliant vendors, interact with them, and address their issues which will further help the recipients to maximize their ITC. Currently, there are many best GST reconciliation software available which could provide help in minimizing the communication gap between the recipients and the suppliers. This kind of software allows the users to send a reconciliation mismatch report to the suppliers or vendors to address any issue regarding the same

5. Finally, the taxpayers are required to report all the corrected sale or purchase transactions of the relevant financial year, for the September returns.

In short, GST reconciliation is an ongoing process that should be carried out periodically in order to claim maximum credit and also to evade mismatches to a greater extent.

No GST returns, no E-way bills! Centre to crack down on non-filers

No GST returns, no E-way bills! Centre to crack down on non-filers

Concerned with the dipping monthly collections of Goods and Services Tax (GST), the government and indirect tax department are now planning stricter measures against non-compliant taxpayers.

According to sources, the tax department is now planning to block the facility to generate e-way bill for taxpayers who do not file two consecutive GSTR-3B returns with effect from 17 November 2019. Once the taxpayer has filed one of the pending returns, the facility to generate e-way bill will be automatically restored.

GSTR-3B is monthly return that every registered GST payer has to file. It contains details of sales and purchases made by a business.

Sources told Business Today that the required connectivity between GST Network (GSTN) and the e-way bill system and development of an application to block and unblock facility has been developed and tested between two systems.

While a decision to this effect was taken by the GST Council in April, the reason for the ‘extreme’ step could be to check leakages of taxes. Non-filing of returns is still high and the tax department thinks this is a major cause for falling GST collections.

“With a continuous dip in revenue for the last few months, this is a step towards curtailment of tax leakage. Businesses need to ensure disciplined filing of GSTR-3B to avoid business disruption,” says Anita Rastogi, partner, indirect taxes, PwC.

According to the indirect tax department, as of 8 November 2019, 21.99 lakh taxpayers have been found to have not filed GSTR-3B returns of August and September 2019.

These defaulters now face possible blocking of the facility to generate e-way bill from 17 November. The department, however, is planning to send alert messages to such taxpayers if they come to e-way bill website, and ask them to file their returns by the 17 November.

The problem though is that integration testing of backend applications of few states with GST System is not yet completed. Unless the facility to unblock the e-way generation facility is developed, the department cannot go ahead with blocking the facility.

Rajat Mohan, a partner in chartered accountancy firm AMRG & Associates, said that deferment of implementation of tax provisions on the premise that technology is not ready indicates that the tax authorities are still not ready to identify and capture the culprits (evading tax) on a real-time basis.

In September 2019, the GST collection fell by 5.3% to Rs 95,450 crore as compared to a year-ago period. In August, the GST collections fell to Rs 92,000 crore, which was lower than the previous year collection by over 4%. With the average monthly collections so far this year at around Rs 98,000 crore, way below the required Rs 1.20 lakh crore, the government is looking at a large shortfall in GST collection.

With five more months to go in this financial year, the latest move is probably a last-ditch attempt by the government to revive GST collections.

Source: Business-Today.

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Commerce Ministry raises issue of notices to exporters for GST ‘violation’

Commerce Ministry raises issue of notices to exporters for GST ‘violation’

The commerce ministry has taken up the issue of Directorate of Revenue Intelligence (DRI) notices being sent to 1,000 exporters for alleged violation of Goods and Services Tax with its finance counterpart, an official said.

The commerce ministry has stated that the “overzealous revenue collection” move by DRI (Directorate of Revenue Intelligence) was against exporters.

The ministry has demanded integrated goods and services tax (IGST) exemption for inputs used in exports between October 2017 and January 2019, the official said.

In a letter to the Department of Revenue, the commerce ministry said that the demand of giving retrospective IGST exemption to exporters could be taken up by the GST Council, chaired by the finance minister and comprising state ministers.

“This department is of the view that enthusiasm of exporters should not be killed by overzealous revenue collection based on technicalities where revenue does not accrue in principle. You may consider placing these concerns before the GST Council for early resolution,” the ministry has said.

It has also stated that as on date, imports made under the advance authorisation scheme on both pre and post export basis are exempted from payment of IGST.

Exporters have raised concerns regarding litigation and penal action by DRI with regard to pre-import condition under the scheme.

DRI had sent notices to exporters for claiming post import IGST exemption between October 2017 and January 2019. During the period, this exemption was allowed only for pre-import of inputs.

But the exemption was allowed both for pre and post import from January 15 this year. The commerce ministry is seeking implementation of this notification from October 2017 itself.

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Source: Business-Standard.
No GST on Collecting Exam Fee from Students and Remitting same to that Particular University: AAR

No GST on Collecting Exam Fee from Students and Remitting same to that Particular University: AAR

The Authority of Advance Ruling ( AAR ) in Karnataka has ruled that, the activity of collecting exam fee (charged by any university Or institution) from students and remitting the same to that particular university or institution without any value addition to it is a service as a pure agent and hence the value is excluded from the taxable value of the applicant as per Rule 33 of the Central GST Rules / Karnataka GST Rules, hence exempted from Goods and Services Tax ( GST ).

The Applicant provides coaching, learning and training services in relation to under-graduate, graduate and post-graduate degree, diploma and professional courses on a standalone bases to students or for any institution, corporate, company, institutes, universities and colleges in the subject and branches of all types of disciplines such as commerce, hardware, software, computer, science, arts, business management, engineering, medical, industrial, pharmacy, mining, military, dance, acting, sports, journalism and any other ‘field of education and set up of coaching and training classes/ centers in relation to the same.

The AAR observed that, “The applicant is collecting the exact amount payable to institute or college or universities as exam fee from the students (service recipient) and remits the same amount to the respective institute or college or universities (third party) without any profit element or additions, on the authorization of the student. This payment is separately indicated in the invoice issued to the respective students. The applicant providing this kind of services to the student in ‘addition to the services as training and coaching institute. Hence the applicant satisfies all the conditions of the pure agent as narrated in Rule 33 of the COST Rules, 2017. Therefore, amount of the fee collected by the applicant from the student as exam fee which is remitted to the respective institute or college or universities is excluded from the value of supply”.

Source: Taxscan

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Punjab and Haryana HC directs GST Department to Re-Open Facility to File or Revise Tran-1 either Electronically or Manually

Punjab and Haryana HC directs GST Department to Re-Open Facility to File or Revise Tran-1 either Electronically or Manually

The Punjab and Haryana High Court has directed Goods and Services ( GST ) department to file or revise Tran-1 either electronically or manually.

The High Court was hearing a bunch of Petitions, which Petitioners are registered under Central/State Goods and Services Tax Act, 2017 and seeking direction under Article 226 of Constitution of India to Respondents to permit carry forward of unutilized CENVAT credit of duty paid under Central Excise Act, 1944 and Input Tax Credit of VAT paid under PVAT Act, 2005 or HVAT Act, 2003 which could not be carry forwarded on account of non-filing or incorrect filing of prescribed statutory Form i.e. TRAN-1 by the stipulated last date i.e. 27.12.2017.

The division bench comprising of Justice Jaswant Singh and Justice Lalit Batra directed to permit the writ applicants to allow filing of declaration in form GST TRAN-1 and GST TRAN-2 so as to enable them to claim transitional credit of the eligible duties in respect of the inputs held in stock on the appointed day in terms of Section 140(3) of the Act.

The Court also ruled that, “the due date contemplated under Rule 117 of the CGST Rules for the purposes of claiming transitional credit is procedural in nature and thus should not be construed as a mandatory provision”.

While concluding the Judgment, the Court also directed Respondents to permit the Petitioners to file or revise where already filed incorrect TRAN-1 either electronically or manually statutory Form(s) TRAN-1 on or before 30th November 2019.

“The Respondents are at liberty to verify the genuineness of claim of Petitioners but nobody shall be denied to carry forward the legitimate claim of CENVAT / ITC on the ground of non-filing of TRAN-I by 27.12.2017”, the Court also added.

Source: Taxscan.

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Customs, GST relief to give Rs 60,000-cr boost to defence

Customs, GST relief to give Rs 60,000-cr boost to defence

India’s defence budget will be augmented by more than Rs 60,000 crore over the next five years owing to exemptions from customs duty and goods and services tax (GST) that kicked in on October 1, said people aware of the matter.

They said estimates by the Rajnath Singh-led defence ministry show that the twin exemptions will significantly impact its budget and free up resources for modernisation and replenishment of equipment.

The defence ministry had been hit by the imposition of customs duty in 2016 on all imports of military equipment, followed by the GST the next year. Although the two levies were aimed at promoting indigenous production of defence equipment, it soon became evident that there was a lack of capability to produce certain items locally.

With the ministry forced to spend a significant chunk of its budget on imports, the twin taxes reduced the availability of modernisation budget, leading to the armed forces cutting back on plans to acquire new systems.

“A case was taken up with the finance ministry to reinstate the exemption on customs duty and exempt GST as well for imported defence items for which there is currently no domestic production capability,” said one of the persons, who spoke on condition of anonymity.

A key factor in the exemption is that it has been provided for a select number of defence items and for a limited period of five years, during which it is estimated that domestic production will not be available. This would safeguard interests of the Indian industry and allow it to provide alternatives after the fiveyear window, said the person.

Officials said that around Rs 25,000 crore will be saved over the next five years on account of the rollback of customs duty on the import of defence equipment that is not manufactured in India while GST exemptions will augment the defence budget by Rs 35,000 crore.

As reported by ET, the withdrawal of customs duty on imported defence items that are not manufactured in India will improve cash flow, but the services are still short of resources to take forward their modernisation plans.

The defence allocation this year is pegged at Rs 3.18 lakh crore, with capital expenditure of Rs 1.08 lakh crore. The inadequate capital acquisition means that the three armed forces will fall short of almost Rs 18,000 crore on their committed liabilities to pay for equipment already purchased.

This gap could mean delayed payments to public sector units and a further delay in purchasing equipment.

Source: Economic-Times

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GST collections remain subdued at Rs 95,380 crore in October

GST collections remain subdued at Rs 95,380 crore in October

The Goods and Services Tax (GST) collection in October declined to Rs 95,380 crore, as against Rs 1,00,710 crore in the same month a year ago, as per government data released on Friday.

This is the third consecutive month when GST mop-up remained below the Rs 1 lakh crore mark, despite October being a festive month.

The revenue collection in September stood at Rs 91,916 crore.

“The gross GST revenue collected in the month of October, 2019 is Rs 95,380 crore of which CGST is Rs 17,582 crore, SGST is Rs 23,674 crore, IGST is Rs 46,517 crore (including Rs 21,446 crore collected on imports) and Cess is Rs 7,607 crore (including Rs 774 crore collected on imports),” the finance ministry said in a statement.

It further said the total number of GSTR 3B returns (summary of self-assessed return) filed for the month of September (up to October 30) was 73.83 lakh.

Source: Times-Of-India.

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Central GST busts fake invoice racket worth R14cr

Central GST busts fake invoice racket worth R14cr

A fake Goods and Services Tax (GST) invoice scam of Rs 14 crore was unearthed by the Central GST commisionerate where the suspects used it for fraudulently claiming input tax credit (ITC).

The scam came to surface during the course of action by the squads of the Central GST where a Chandwad-based firm M/s Gonglu Agro Pvt Ltd had received fake GST invoices worth Rs 5.58 crore.

Later, the Central GST commisionerate found that this firm was also involved in issuance of fake GST invoices. “During investigation we found that this Chandwad-based firm was involved in issuance of fake GST invoices. The firm has issued fake GST invoices of around Rs 70 crore to facilitate passing on bogus ITC of Rs 8.4 crore,” an official from the Central GST department said.

The Central GST department has arrested the managing director of the company, Rahoul Jain, and is investigating the case to find whether other firms are also involved in such practices of providing fake GST invoice to facilitate bogus claims of the ITC.

The Nashik divisional office of the Central GST (erstwhile office of Central excise, service tax and customs) has jurisdiction across five districts — Nashik, Ahmednagar, Dhule, Jalgaon and Nandurbar.
There are over 1.10 lakh businesses registered in the district of which 60,000 businesses are registered with the Nashik divisional office of the state GST, while remaining 53,591 are registered with the divisional office of the Central GST.

The new tax regime GST came into effect from July 1, 2017 replacing the multiple indirect taxes and traders with turnover of below Rs 20 lakh were exempted from GST, while those with annual business turnover up to Rs 1 crore are eligible for composition scheme.

The GST council made several changes in the past following introduction of GST and the exemption limit had was increased from Rs 20 lakh to Rs 40 lakh and only those businesses with turnover of above Rs 40 lakh are under the tax net.

Source: Times-Of-India.

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